Broadband – An Economic Imperative

Published by: Brian O'Connor | Published on: 31 Oct, 2018
Broadband – An Economic Imperative

High-speed data transmission may be the most significant innovation of the late 20th century. Its anticipated benefits in telemedicine, education, home-based businesses, military and defense systems and entertainment are profound. For these reasons and others, the Greater Killeen Chamber of Commerce’s 14 Forward initiative has placed broadband at the top of its objectives. 

According to national broadband internet rating system BroadbandNow, Killeen’s download speed currently ranks 722nd out of 1,214 Texas municipalities with an average speed of 41.56 Megabytes per second (Mbps) behind Belton, Harker Heights and Nolanville. Killeen is 16.1% slower than the Texas average of 49.54 Mbps and only 3% faster than the national average. In Bell County, 19,000 people do not have access to 25 Mbps wired broadband. 

These differences in broadband networks pose a competitive disadvantage for Killeen, especially in its ability to appeal to technology companies and a dynamic workforce. Higher electronic communication speeds are critical in knowledge-based economies, as speed of information spurs productivity, and hence competitiveness. The reasons for increased productivity include:

  • Larger packets of information can be transferred digitally
  • Larger amounts of quality information can be gathered and distributed than was previously possible
  • Store large amounts of information online means that more people can work from home more often, which saves commuting time
A recent report highlighting the growth of telecommuting in the U.S. workforce reported that between 2005-2015 the number of U.S. workers who do at least 50% of their work at home or a location outside the office grew by 115%. The national average of all private wage and salary workers who worked from home last year is 4.3%. In large metropolitan areas, the highest concentration of telecommuters is in Austin, Texas at 5.4%.  
 
With increased broadband speed comes new types of computer programs and network services, which may reduce hardware and software costs substantially. These savings may be used for other investments leading to higher demand for goods and services, and thereby an increase in GDP. A 2010 study by Copenhagen Economics estimated the impact of increasing the entire broadband speed from 5 to 10 Mbps would lead to an approximate GDP gain of 1.9%. This increase would mean an additional $4.9 billion annually in goods and services to the Texas economy.
 
New technologies, user demand and greater reliance on internet access necessitate ongoing infrastructure upgrades. The more bandwidth a network has, the more information it can carry in a given amount of time. Networks with high bandwidth also tend to be more reliable because fewer bottlenecks disturb the flow of information. 
 
As Americans, the amount of bandwidth we need grows every year with worldwide demand doubling every two years. The fastest growth has been for pay TV, Internet-based video, and video communications. In the span of just a few years, we’ve seen Internet video evolve from a novelty to the standard way of accessing news, information and entertainment. Gaming, 3D graphics and virtual reality are making way for innovative products and services.  
 
In the recent past, business and science both entered the era of “Big Data” applications that collect and analyze data on massive scales. Today’s Big Data applications range from consumer pricing models to DNA sequencing to particle physics to control of electrical grids. Universities, hospitals, utility providers, research parks and military installations are common users of Big Data. Unfortunately, Big Data doesn’t work without Big Bandwidth.
 
14 Forward’s mission of creating a bandwidth download speed of 25 Mbps across every business and every household in Killeen is a worthy pursuit. Bandwidth is driving changes in the Information Technology sector, enabling services such as cloud computing and mobile apps. In today’s knowledge-based economy, access to an affordable, high-capacity internet connection is a necessary tool for empowering people and nurturing technology and innovation. 

Around the world, cities are becoming “smarter” by using data and digital technology to build more efficient and livable urban environments. In fact, lower-income cities that embrace smart city principals are often better positioned to benefit because they are building infrastructure from scratch. According to forthcoming research by the McKinsey Global Institute, smart-governance solutions can improve health, safety, environmental, and other quality-of-life metrics by 10-30%. However, to realize this potential, cities must first overcome a more basic problem: gaps in digital infrastructure.

The State of North Carolina believes so strongly that the future lies in broadband that it adopted a plan in 2016 to increase the percentage of households with broadband access to 100% by June 2021 (ncbroadband.gov). Additionally, Chicago Mayor Rahm Emanuel recently announced the Chicago Broadband Challenge to offer free wireless internet to the public in all parks and open spaces throughout the city. Communities are aware that when they lack good broadband access, corporate site selectors, business and investors cross them off their lists and residents move away in search of better jobs.

In fact, most researchers have found that almost all industries show a positive relationship between broadband expansion and local economic growth, particularly industries that rely on information technology, such as utilities, finance and insurance, and business support services. The research cautions that although a robust broadband network may not persuade an organization to come to or stay within a community, the absence of such a network guarantees that potential employers will go elsewhere. 

In 2017, Broadband Communities Magazine correlated population change with broadband availability in all U.S. counties. The study found that population in counties in the bottom half of their states in terms of access to at least 25 Mbps broadband grew at one-tenth the rate of the counties in the top half. The bottom 10% of counties in each state, in aggregate, lost population.

The World Bank examined the impact of broadband availability on GDP growth during the period 1980-2006 for 120 developing and developed countries. The study concludes that a 10-percentage point increase in fixed broadband availability increased GDP growth by 1.21% in developed economies and 1.38% in developing ones.

For our community, the first step in this process is to inventory Killeen’s existing network and bandwidth speeds. 14 Forward staff has begun working with existing broadband providers and local government entities to map our area in order to determine areas that are underserved or not served at all. Only by identifying the gaps in service can the deployment of bandwidth competitively meet the needs of our community.