Viewpoints
Fiber’s upside is unlimited, and it delivers the vital and necessary infrastructure to support expanded economic growth.
By: Gary Bolton, President and CEO, Fiber Broadband Association
Building and investing in infrastructure is one of the many factors that contributes to America’s economic health and growth. Everyone is familiar with Dwight D. Eisenhower’s decision to build the nation’s Interstate Highway System, enabling the efficient movement of goods and services across the land by replacing a patchwork of roads with multi-lane highways built to specific standards.
Construction of the system led to a boom in interstate shipping using the (then) newfangled creation of the intermodal shopping container to move bulk goods seamlessly between highways, trains, and ports for faster movement to domestic and international markets. According to research by the Federal Highway Administration, one quarter of the nation’s productivity increase from 1950 to 1989 is attributable to increased investment in the highway system. The investment created the conditions for the growth and success of Fortune 500 corporations such as Walmart and FedEx.
From the passage of the 1956 Highway Act, it took almost 40 years and around $618 billion in 2023 dollars to complete the system, with several deviations from the original plan. Other federal investments in national infrastructure include bridges, port improvements, rural electrification, and strengthening the electric grid.
The $42.45 billion BEAD program, passed in a bipartisan vote, is the latest national investment in infrastructure. It will deliver high-speed, low-latency, resilient broadband to nearly every household and business in the country, providing families with unprecedented educational opportunities, accessible telehealth to rural and at-risk populations, the unhindered ability to access vital government services, and the gateway to increasing individual and household incomes by providing increased remote work and entrepreneurial opportunities.
More simply, fiber creates wealth. There are multiple studies using a variety of methods across a number of communities to document and verify how fiber creates jobs and businesses, attracts businesses to relocate, increases household income and real estate values, and so much more.
The original ‘Gig City’
Chattanooga, Tennessee, is the original and most detailed example of how fiber has created substantial wealth for the community. In 2009, EPB secured a $112 million federal grant to deploy fiber throughout its 600 square mile service area for a smart grid to improve its electric service. In combination with a $200 million loan, EPB was able to provide every household and business in its territory with high-speed broadband, enabling Chattanooga to become the first “Gig City” in the Western Hemisphere.
EPB today delivers broadband services to more than 118,000 customers. A 2020 study by University of Tennessee at Chattanooga said the network helped generate over 9,500 jobs, attracted $224 million in additional business ventures and $110 million in research projects, and saved businesses $260 million through improved power reliability from 2010 to 2020.
In total, the EPB fiber network delivered nearly $2.7 billion in community benefits over the first decade of operations through job creation, a lower unemployment rate, supporting education for K-12 students in economically challenged households, reduced power outages, and reduced truck rolls for repairs. EPB customers received an average of 40-55% annual decrease in power outage minutes, delivering an average of nearly $27 million in savings each year by avoiding spoilage, lost productivity, and other impacts.
EPB’s success isn’t limited to its customers but extends to the entire community. Information from Kickstarter shows that Chattanooga produced about 10% of the site’s crowd-funded projects over the decade of study, a higher percentage than any other Southeastern city. EPB was also the largest contributor to local taxes, paying $60 million to local governments from 2011-2020 in support of local schools and other public services.
Charlottesville’s fiber anchor
Home to the University of Virginia, Charlottesville has benefited greatly from the deployment of fiber. Between 2015 and 2019, fiber contributed to 35% of the city’s private sector job growth, adding 735 new jobs. It also stimulated the creation of small businesses at a higher rate than other comparable cities in Virginia and added $4 million per year in increased housing value in the Charlottesville area.
Charlottesville’s success with fiber drove interest in the surrounding community of Albemarle County, with county officials working with the local electric co-op to build out fiber to unserved and underserved businesses and households. A combination of state and federal funding is expected to provide universal high-speed broadband access to Albemarle County by the end of 2025.
The delivery of fiber to all locations in Albemarle County will enable easy access to vital resources, such as the University of Virginia’s telemedicine services, while farmers will be able to leverage the high-speed low latency connectivity for precision agriculture. Autonomous tractors and other vehicles require high-speed broadband for the vast amounts of data required in their safe operations, with fiber providing the upstream bandwidth and support for the wireless connectivity that enables remote operations and monitoring.
Fiber wealth stimulus across the county
Last fall, the Center on Rural Innovation (CORI) presented its own research on fiber’s contribution to rural communities. The “Beyond Connectivity: The Role of Broadband in Rural Economic Growth and Resilience” study found that fiber significantly boosted income, entrepreneurship, and business investment.
Researchers analyzed data from 2020-2022 and found that rural counties with high broadband adoption rates of over 80% had significant advantages over those with lower usage, with the higher usage counties demonstrating 213% higher business broadband growth. Rural areas with low broadband usage lose three or more businesses each year, translating into fewer jobs for residents and a noticeable population decline.
Higher fiber broadband translated into a 10% higher self-employment rate by providing significantly lower barriers for rural residents to start businesses. Broadband connected them to global markets and essential resources such as banks and venture capital, enabled them to conduct market research and leverage digital marketing strategies, thereby expanding their customer base and facilitating e-commerce. In addition, broadband supports remote work and collaboration, increasing the pool of potential employees and reducing the reliance on physical proximity to urban centers.
Other benefits higher broadband use brought to rural communities include 44% higher GDP growth and 18% higher per capita income growth, with the latter working out to an increase of nearly $500 per person each year on average for country residents.
In Beltrami County, Minnesota, the fiber optic network built and operated by Paul Bunyan Communications supported high-tech initiatives including an e-sports gaming championship and the Greater Bemidji’s Launchpad business incubator for the region. Since 2010, the number of businesses in Beltrami County grew by 12.1%, outperforming both the state and national average, while the per person income in the county increased by 7% between 2020 and 2022.
Lowest cost per home or best economic boost per community?
Many have tried to simplify discussions on providing sufficient and future-proof broadband down to the lowest cost per household, a mistake made with DSL technology being “good enough” before it quickly became apparent it wasn’t as the need for more speed for households and applications outgrew its upside. Fiber’s upside is unlimited, and it delivers the vital and necessary infrastructure to support expanded economic growth in communities both today and for the needs of tomorrow. We’ve got the receipts from multiple studies conducted over more than a decade from fiber projects across the country.
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