Economic Growth through Fiber

May 20, 2022 | 0 comments

The digital divide was first more than 25 years ago as consumer communications needs shifted from landline voice to internet access. The divide is driven by the economics of broadband, resulting in a gap between the low and high income, urban and rural. Over the past decade, the US government has invested more than $100 billion of infrastructural investment but the gap is still significant. The current debate is on whether more funds should be allocated to bridge the divide and the actions required.

It is crucial to quantify the economic impact of bridging the divide to accurately valuate the options. Deloitte developed economic models to evaluate the relationship between broadband and economic growth. Based on their findings, a 10-percentage point increase of broadband penetration in 2016 would have resulted in more than 806,000 additional jobs in 2019, or an average annual increase of 269,000 jobs. There is a strong correlation between broadband availability and jobs and GDP growth. Higher broadband speeds will bring about noticeable growth in job growth but with diminishing returns. The findings from Deloitte also suggests that setting too high a threshold for broadband speeds (uplink and downlink) will discourage investments that promises new technologies yet do not fulfill the threshold. Furthermore, innovative solutions can help spawn a competitive broadband environment that improves broadband affordability for all households.

There are a few key points that stakeholders need to consider going forward. Firstly, there must be an emphasis on adoption and affordability by ensuring consistent user experiences. Secondly, Segment underserved US geographies into more granular categories that recognize the vastly different coverage and affordability needs of underserved geographies. Lastly, Incorporate the expected growth in broadband consumption into future investments and programs by utilizing subscriber data.

The answer to solving the digital divide is one that either investments from the private or public sector. With the correct guidelines in place, it will enable immediate yields in providing affordable access to underserved segments of the population and move the nation closer toward bridging the digital divide.

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