New Deloitte Study Explores the Economic Impacts of Broadband
Bowling Green, KY (June 10, 2021) - In April, professional services firm Deloitte released a study on how the Digital Divide has affected economic growth. This study is certainly timely, if not long overdue, as many Americans have been working remotely for over a year now due to the COVID-19 pandemic.
According to the study, $107.5 billion have been invested into broadband development with an additional $25.4 billion in “upcoming funding.” Still, millions of Americans are without broadband as of 2019. As for speeds, 42 million Americans are without 250 Mbps download speeds and 25 Mbps upload speeds. Also, 27.3 million Americans are without speeds of 100/10 Mbps. On the bright side, the share of Americans without access to high-speed internet has been decreasing year over year.
Regarding the economic impact of broadband—it’s huge. Deloitte predicted that a “10 percent increase in broadband access in 2014 would have resulted in more than 875,000 additional US jobs and $186B more in economic output in 2019.” According to their analyses, adding 10 Mbps to average download speeds in 2016 would have resulted in more than 139,000 additional jobs by 2019. While this type of growth may not have taken place, numbers like this provide an incentive for the U.S. Government to support broadband expansion projects.
In cases where Americans did have access to broadband speeds of 250/25 Mbps, all members of a household were able to stream HD and 4k video or conduct a video conference at the same time. Even at 100/10 Mbps speeds, every member of a household could stream HD videos and conduct video conferences, while 91% of households could simultaneously stream 4k videos at that speed.
An interesting case study Deloitte uses is in Alger County, Michigan. Alger County has a population of approximately 9,000 and consists of nine townships, two of which are considered rural while seven are deemed remote. In 2017 and 2018, the High Cost fund paid the limited number of providers to Alger County approximately $26.7 million. From 2012 to 2017, the percent of Alger County homes that met FCC baseline speeds of 25/3 Mbps dropped from 84% to 74%. This suggests challenges beyond broadband access must be addressed if we are to close the Digital Divide.
Thankfully, the percentage of families and businesses without access to high-speed internet has declined in recent years, and is likely to continue to decline with the introduction of new legislation like Biden’s broadband plan. With that said, funding alone can’t fix all our challenges, as we saw in Alger County. In order to have a more Connected Nation, broadband expansion needs to be incentivised, competitive, and more affordable.
You can read the Deloitte study in its entirety here. If you’d like to stay up to date with broadband news and developments, sign up for Connected Nation’s newsletter and follow us on Facebook or Twitter.
About the Author: Charlie Koepp is a Connected Nation’s Research Intern. He is currently a senior at BASIS Independent School in Brooklyn, New York. This fall he will be attending the University of Wisconsin-Madison where he plans to study political science and will continue to learn how best to address the rural broadband gap.