Economic Benefits of Fiber Deployment

Currently, there are at least 56 million households – half of the households in the United States, which do not have fiber broadband. There is an ongoing debate about the existence and magnitude of economic benefits that would be realized if fiber was deployed to locations that are already served by high-speed broadband, but do not have fiber broadband.

The Brattle Group developed the following groundbreaking study – the first to show that fiber deployment has significant incremental economic benefits even in the presence of other high-speed broadband technologies. By deploying fiber to the 56 million households that are in tracts unserved by fiber, the United States has the potential to generate at least $3.24 trillion in terms of net present value (NPV) in incremental economic impact. This value largely is found in housing (generating a $1.64 trillion increase in housing values) and in income/job creation (generating a 1.6 trillion increase via increased income and new jobs).

The report also argues that because private actors will not capture all the benefits of fiber deployment the marketplace will not deploy enough fiber on its own. Based on these findings, the study suggests a few policy-focused takeaways.

• First, because the social return on investment is higher for fiber, directing more of the existing public funds towards fiber deployment will generate greater economic returns compared to investment in other high-speed broadband technologies such as hybrid fiber-coaxial (HFC). Thus, the various public programs, such as the Rural Digital Opportunity Fund (RDOF), the Broadband Equity, Access, and Deployment (BEAD) program, ReConnect, Capital Projects Fund and the federal Broadband Infrastructure Program (BIP), which are prioritizing fiber builds are on the right policy path. This prioritization needs to continue if the gains from deploying fiber are to be realized.

 

• Second, based on available data, our research implies that even if fiber is deployed as an overbuild to existing high-speed technologies, the incremental benefits are sizeable. Thus, when the federal or local governments are measuring the underserved population, one important metric may be using a fiber-unserved metric and not just a speed-based metric. This will allow these entities to better target funding towards a fiber solution.

 

• Third, federal and local governments that promote fiber deployment, such as BIP, Louisiana’s Granting Unserved Municipalities Broadband Opportunities (GUMBO) program and Maine’s ConnectMaine fund, should be encouraged and expanded. Additionally, the focus on fiber that some of these programs have, should be supported, and used as a model for other private-public initiatives.

 

• Last, fiber is a future-proof solution and when the benefits and costs are evaluated on a long-run horizon, fiber becomes the optimal choice for delivering fixed high-speed broadband.