State Economies Can Benefit from Broadband Deployment

Executive Summary

The introduction of broadband holds great economic promise, not just for the companies providing broadband services, but for the businesses and consumers who rely on the service. Two recent studies suggest that full broadband deployment
would generate roughly 1.2 million jobs throughout the nation–or more than twice the number of jobs lost in the telecommunications sector. These are estimates of net new job creation.

Download the full study (.pdf)

Broadband deployment is the next step in creating the new networked economy. In addition to wider access to providers of goods and services, consumers will have
easy access to information and services in areas such as health care, new avenues to stay in touch with friends and family members, new educational opportunities, and
new ways to interact with government bodies at all levels of government.

Unfortunately, there is a technological divide between Internet users and content providers: most homes still connect with simple dial-up access, while content
providers are working on applications based on high-speed broadband connections and rapid data transmission.

The issue for many households has been commonly known as the “Last Mile” problem. That is, the entire network is not set up for broadband transmission. Stepping down from the backbone into the “local loop” that provides access to
homes is also a significant step down in speed. The majority of the local loop is copper wire, and the most common connection is dial-up access with a modem, at a rate up to 56kbps.

According to the Pew Internet & American Life Project, in 2003, the total number of households with a high-speed connection reached 31 percent, which was a 50 percent increase over the year 2002. Households with broadband access to the Internet totaled 31 million people as of March 2003.

While acknowledging the potential economic gains available from broadband, the FCC and state regulators only recently have begun to address potential barriers to
broadband deployment.

Expanding the deployment of broadband technologies would be beneficial to all states, in terms of both output and employment. The benefits reach all states, with
those already linked closely to the telecommunications and information technology sectors receiving the greatest benefits. It is important to point out, however, that
benefits accrue to every state, suggesting that policymakers should evaluate their current policies toward broadband deployment.

Combining the direct and spillover job estimates yields a total of 1.2 million new jobs if broadband technologies were deployed to residential customers across the United
States. The chart on the next page demonstrates the distribution of jobs. California generates over 170,000 new jobs overall, New York gains over 90,000 jobs, and
Texas creates over 80,000 jobs. Florida gains over 70,000 jobs and Pennsylvania and Illinois gain over 50,000 jobs each. Another 15 states add more than 20,000 jobs. The remaining states cumulatively produce 239,000 new jobs.

Pursuing widespread broadband deployment can provide a significant boost to the nation, replacing many of the jobs that were lost in the wake of the crash of the
technology sector. This renewed economic activity also raises state output, creating a source of increased growth for struggling state economies.

Download the full study (.pdf)