In the context of digitalization, intelligence, networking, and platform of social economy, countries around the world attach great importance to the development of broadband networks and have introduced policies to develop their broadbands. China implemented the “Broadband China” demonstration city construction policy in 2014. The implementation of the national broadband strategy will lead to the continuous upgrading of the social economy, which will play a role in the national economy and people’s livelihood. One specific manifestation is that as a public infrastructure, broadband will inevitably affect the income gap between urban and rural residents, thereby affecting the income gap between urban and rural residents. There have been studies on the impact of “Broadband China” demonstration city policies on urban-rural income inequality, but there are issues such as inconsistent conclusions and a lack of analysis of mechanism paths. Based on the China panel data of prefecture-level cities from 2012 to 2020, this study took the construction of “Broadband China” demonstration cities as a quasi-natural experiment, and used the multi-period DID fixed effect model to empirically analyze the policy impact of the construction of “Broadband China” demonstration cities on the income and the gap between urban and rural residents. The study draws conclusions as follows： (1) at this stage, the implementation effect of “Broadband China” demonstration city construction in rural areas lags behind that in cities; (2) the impact of the construction of the “Broadband China” demonstration city on the income of urban and rural residents varies according to whether they belong to the urban agglomeration, and the proportion of the tertiary industry; (3) with skill-oriented technological progress, the construction of “Broadband China” demonstration cities has widened the income gap between urban and rural areas by promoting the employment of high-skilled industries and squeezing the employment of low-skilled industries. Compared with previous literature, this paper expands on the following two aspects: (1) the research in this paper supplements Chinese evidence and enriches the existing literature on how digital infrastructure construction affects the income of urban and rural residents; (2) this paper verifies the employment effect path of the construction of “Broadband China” demonstration cities on the income gap between urban and rural residents, and expands the research on the impact mechanism of digital infrastructure on the income gap between urban and rural residents. This study examines the policy effectiveness of promoting digital infrastructure construction in China. On the one hand, it can provide policy reference for China’s next step in developing new infrastructure and promoting the integration of urban and rural infrastructure construction; on the other hand, it can help other developing countries develop the digital economy, bridge the digital divide with developed countries, and narrow the income gap, providing Chinese wisdom and solutions.