If you listened to my podcast yesterday with Mark McElroy of Connected Nation about their study on the economic impact of pushing broadband into underserved areas of the U.S., you might have been impressed by a big number — $134 billion. That’s the potential economic impact of national deployment of what Connected Nation, a not-for-profit group, has done in Kentucky, with the ConnectKentucky project.
First, $7 million — that’s what the state of Kentucky spent for ConnectKentucky. Second, $740 million — that’s the private sector investment in infrastructure to expand the reach of broadband in Kentucky.
In other words, this is not a government-subsidized effort, at least not to any large degree. Seven million dollars is a rounding error in many state budgets (I live in Illinois, where it’s also probably a fraction of the money being siphoned off into contracts for the politically connected, but don’t get me started there).
What is impressive about the ConnectKentucky effort is that it has identified a way for service providers to target areas where there isn’t broadband deployment, thus justifying deployment by the service opportunity. And it has taken problem-solving down to the local level, where it is more successful.
“Kentucky was the first state to have a detailed perspective and map of its own broadband infrastructure,” McElroy told me. “This is the result of a cooperative data sharing relationship with more than 80 broadband providers, who began sharing data in ‘05. We have updated that map over time. The maps identified where the gaps are. An individual provider will know where his or her network is but they don’t know where their competitor is. By getting widespread cooperation, the benefit for them is that they can better target their deployment dollars, and play how to best expend their resources. You lay on top of it things like census data information, and identify the density of un-served households. We have lowered the cost of entry in many ways. ”
That’s not all there is to ConnectKentucky — there are also planning sessions with local leaders and businesses to take the problem-solving down to the local level. ConnectKentucky is seeing a payoff from all that work in the form of 83% rate of growth in broadband adoption, compared to 57% nationally.
The state has also seen the benefits in terms of job retention and expansion, reduced healthcare costs, reduction in unnecessary driving, and reduced carbon dioxide emissions.
For its report, Connected Nation expanded the Kentucky experience to the entire country and determined that a 7% increase in broabdand adoption could produce the aforementioned $134 billion.
Some people may find that figure hard to believe, but as I said, I don’t think it’s the most impressive dollar amount being bandied about. This seems like a straight-forward, simple approach that doesn’t require massive government subsidies. Am I being naive here? Maybe.
But there is an obvious cost of doing nothing, which is to watch local economies fail as traditional manufacturing businesses go under and even service businesses ship jobs overseas.
As McElroy points out, there are bills currently before Congress that would establish the kind of mapping of broadband facilities that was done in Kentucky. Certainly this is something everyone could get behind.