The Economic Impact Of Broadband: Estimates From A Regional Input-Output Model

Abstract

Like good roads, schools, and hospitals, cutting-edge broadband infrastructure is crucial to economic development and to the quality of life of local communities. Second-generation broadband (SGB), capable of supporting video, voice and data services simultaneously over a fiber-optic infrastructure, can provide users not merely faster internet connectivity, but a whole array of applications and communication services. This study provides an approach to quantifying the economic effects of first and second generation broadband availability in Hamilton County (TN) using an IMPLAN model. We find that household broadband expenditures over the period 2001-2005 supported 548 jobs and contributed $109.8 million in income and taxes to Hamilton County. Further, we estimate that while a new fiber-to-the-home project would cost $195.5 million over ten years, the economic impact of such a project would result in income and taxes exceeding $352 million while creating over 2,600 new jobs. We conclude that Hamilton County would benefit from the adoption of this technology.