Report: Broadband Legislation Could Boost Economy
BackBy Brian Summerfield — March 2008
A just-released report from Connected Nation, a broadband adoption research and advocacy organization, shows that broadband legislation under congressional consideration could boost the U.S. economy by $134 billion annually if passed.
The study details the financial impact state by state and uses the organization’s ConnectKentucky program as the underpinning for the predicted economic stimulus. Connected Nation implemented this three-year initiative to promote interest in broadband in the Bluegrass State.
“We’ve measured the demand of broadband and technology expansion as we’ve gone along,” said Mark McElroy, COO and senior vice president of communications at Connected Nation. “The study looks at the growth of broadband demand in Kentucky and compares that to the demand we would’ve expected if Kentucky had followed the national trend for adoption growth. Clearly, broadband adoption would have increased on its own, but we were looking for that extra margin that we could have attributed to our program.”
According to McElroy, ConnectKentucky was funded with a $7 million investment from state government that financed Connected Nation’s broadband mapping and county-by-county promotional efforts. The program produced 297,000 more broadband subscribers (as compared to adoption rates throughout the country) than it would have otherwise gotten.
“The private-sector investment in telecom infrastructure and deployment during that time was north of $740 million,” McElroy said. “Kentucky was losing high-tech jobs before we started this program. We’ve gone from high-tech job creation of -6.4 percent to 3.1 percent. And when Kentucky experienced 3.1 percent growth in IT sector jobs, the national average was 0.1 percent.
“We’ve taken that extra amount, and through modeling that the Brookings Institute has developed, identified employee creation and retention and direct consumers savings as a result of that use. Based on that profile, as well as the population and job base of the other states, we can extrapolate these findings. With this nominal uptick, how might each state benefit? With the aggregate of that, we come up with that national number.”
To reach that $134 billion figure, McElroy said different funding provisions spread out across three bills have to pass. One of these is currently attached to the Farm Bill, with the others under consideration in the Senate and House, respectively. Cumulatively, they will provide the support and funding for the kinds of programs employed in Kentucky across the entire U.S.
“They achieve this in different ways, but they each seek to do something about this,” he said. “The one in the Farm Bill is $40 million annually for a five-year period, which creates a grant pool for states that want to enact programs like this. The marquee legislation calls for more, but it starts out low and grows over time.”
McElroy explained that this program would not be limited to poor, rural areas but would address insufficient broadband access wherever it happened to be.
“This includes California, New York, Nebraska and Vermont. Every state from Hawaii to Massachusetts is trying to figure out how to extend networks out to hard-to-reach areas. We’re hoping that Congress can do something soon. The nation as a whole has less than 50 percent adoption of broadband. When you take into account that less than half our population is participating in the kinds of benefits this study outlines, it makes a compelling case that something should be done.”