After the Stimulus: Broadband and Economic Development

One of the big debates that goes on constantly is the one that asks, what’s the real economic development value of broadband. Of special interest to me, of course, is community broadband – networks run in part or in total by local government and/or stakeholders from within the community.

Last year the U.S. broadband stimulus program finished awarding public, private and nonprofit organizations over $7 billion to build new broadband infrastructure, create public computing centers and implement broadband adoption programs. Concurrently, hundreds of millions have come from private and other public sources for broadband. Improving economic development is a driving force behind these investments.

However, what have we accomplished for our investments, particularly in underserved urban and rural communities? It is a little early in the process, though, and only a small portion of the stimulus checks have been issued. Perhaps the more important question is, what economic outcomes can we hope to achieve in the next two or three years?

My national survey of economic development professionals, conducted in partnership with the International Economic Development Council (IEDC) produced results that provide a number of clues. Here’s a sampling of this year’s findings.

  • Rural economic developers appear to be well ahead of their urban counterparts in the area of planning. 58% of rural respondents either have broadband strategies and tactics worked into their economic development plans, or are writing plans currently with these elements. Only 39% of urban respondents have done the same.
  • “We need a gigabit” has become the rallying call for broadband supporters everywhere; rural survey respondents say that 100 – 120 Mbps the minimum they’ll need over the next three years to impact their local economies.
  • While the FCC and other policymakers continue to try to make a silk purse from a 4Mbps sow’s ear, economic development professionals aren’t buying it. At least 92% see no economic impact coming from this minimal “standard.”
  • “Finding a job” is one of the most frequently cited personal economic benefits of broadband for low-income people. Economic development professionals rate it at the bottom of the list of potential economic outcomes.
  • As expected, fiber is clearly seen as the leading broadband technology to attract businesses to a community. However, wireless is viewed as a strong contender for increasing startups.
  • Not all wired broadband technologies are equal. Whereas fiber networks are clearly viewed by more people as having a greater impact than wireless on a range of economic outcomes, cable is viewed as only slightly more effective than wireless despite the industry’s PR and marketing efforts.
  • Perseverance is still key. Although 19% applied and didn’t win a stimulus grant, another 11% whose communities also didn’t win kept fighting for money and got their projects funded through state or other federal grants.
  • As we move well along our way into the second decade of the new millennium, 7% of respondents only have dialup as their broadband option, and 13% of rural respondents say they don’t expect to ever have broadband sufficient enough to impact economic development.

Download the full survey analysis report here.

Supplement: Download comments of 169 survey respondents who offer advice on getting better broadband to communities that need it.

If you want assistance with developing your economic plan that incorporates broadband strategies and tactics, call me about my on-site workshop that helps your broadband project team be more effective.

8 Responses

  1. spot on.
    governments the world over don’t seem to be getting IT, but thankfully many more rural areas are taking the matter into their own hands. Gonna take a while but we will get there. Gigabit or bust.

  2. […] run in part or in total by local government and/or stakeholders from within the community. Leave a Reply Click here to cancel […]

  3. […] analyst and development consultant Craig Settles recently issued a report containing responses to a national survey of economic development professionals that he conducted with the International Economic Development Council (IEDC), to better understand […]

  4. […] whose executives (and profits) do not reside in the communities they are crippling? A recent national survey of economic development professionals points to the various economic impacts broadband can have on local economies. This is what Longmont […]

  5. It’s interesting that a survey of economic development professionals may be the scale by which broadband services are measured. However, aren’t the needs of business a more accurate measurement? Working for a communications company, my interactions with existing business has taught me that 50 Mbps is a lot more than what they need, for the transmission of engineering plans and specifications, MRIs, HDTV and more. Is a gigabyte really needed now or in the foreseeable future, or a number pulled out of the air?

    • Its a good number, a gigabit.
      It doesn’t cost more to put a gigabit through a fibre than a megabit. Once you have built a fibre network you can put terabits through it if you like. It is futureproof. A lot of the cost comes through throttling customers down. Just light it with a gig and let it rock. Of course nobody has a computer capable of a gigabit, but they soon will have. Work on an abundance model instead of the old scarcity model. Build for the future instead of the past.

  6. […] After the Stimulus: Broadband and Economic Development ( […]

  7. […] In a national survey of these professionals, 25 percent said they need at least 100 Mbps of broadband speed to impact local economies by attracting new businesses, making current businesses more competitive and increasing individuals’ earning potential. Around 35 percent said they need 500 Mbps or more. FCC data last year revealed that 60 percent of Americans can’t even get 3 Mbps. So why are people swooning over this week’s FCC report showing ISPs are delivering 96 percent of advertised speeds that don’t mean jack to businesses and entrepreneurial individuals trying to make a bigger buck? […]

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