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Jim Baller Baller Herbst Law Group, PC Washington, DC (202) 833-5300 Jim@Baller

TATOA Policy & Legal Track Impact of Broadband Deployment to Local Governments October 24-25, 2013 Seabrook, Texas. Broadband and Economic Development: Fact or Fiction. Jim Baller Baller Herbst Law Group, PC Washington, DC (202) 833-5300 Jim@Baller.com.

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Jim Baller Baller Herbst Law Group, PC Washington, DC (202) 833-5300 Jim@Baller

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  1. TATOA Policy & Legal TrackImpact of Broadband Deployment to Local GovernmentsOctober 24-25, 2013Seabrook, Texas Broadband and Economic Development: Fact or Fiction Jim Baller Baller Herbst Law Group, PCWashington, DC (202) 833-5300 Jim@Baller.com

  2. Growing List of Gigabit Service Providers And many more ….

  3. Economic Development is,and has always been, the Number #1 Driver of Community Broadband Projects

  4. But What is Economic Development? “The purpose of local economic development is to build up the economic capacity of a local area to improve its economic future and the quality of life for all.  It is a process by which public, business and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation.” World Bank,http://bit.ly/S2Rtp4

  5. Economic Development Strategies Many strategies, endless variations: • Government => Businesses/Institutions => Residents? • Attract a few large employers, a larger number of smaller employers, or a combination of both? • Increase the profitability of local businesses, the number or quality of local jobs, or some of each? • Support of all local industries or target particular industries – e.g., high-tech, health care, data centers, etc. ? • Community or regional approaches?

  6. Economic Development Tools Economic Development Handbook 2013, http://goo.gl/2Lv4nM • Tax incentives (property, Tax Increment Financing, TEDA, etc.) • Loans, grants, loan guarantees, or other financial incentives • Special districts of various kinds, empowerment zones • Attractive low-cost sites or facilities • Free or accelerated franchises, permits, other approvals • Support workforce development and training • Upgrade roads, sewers, power • Use of purchasing power to create “anchor tenancy” • Help aggregate demand

  7. Strong Anecdotal Evidence That Broadband => Economic Development Anecdotal Evidence (See, e.g., Baller Herbst, ISLR, Broadband Communities, Settles, NewCom websites) • Huge and rapidly growing body of anecdotal evidence (including effect of lack of advanced capabilities (e.g., Danville, VA) • Advanced broadband capabilities now a critical factor in site selection (SeeSite Selection Magazine) • Economic development professionals starting to stress importance of advanced broadband capabilities – 76% say at least 100 Mbps necessary (See Settles surveys)

  8. Harder to Quantify the RelationshipBetween Broadband and Economic Development • A broadband expert, an economic development specialist, and a statistician … • For fiber, it’s still very early – limited FTTH data base • Circumstances vary widely • Broadband only one of several critical factors (also skilled work-force; costs of labor, energy, environmental compliance, taxes; ease of doing business; proximity of universities, lenders, clusters; attractiveness of community to employees (e.g., quality of schools, things to do, etc.); transportation (airports, highways, railroads, telecom) … • Timing is crucial, for all concerned

  9. What Can and Can’t We Say? Formal Studies (collected at www.baller.com/econdev.html) • We can say that there’s an association between broadband and economic development • We can’t say that $X of investment in broadband or FTTH will yield Y units of economic development or Z jobs • We can say that “generally, broadband adoption [>60%], availability [>85%], and download speed [>10%] do have meaningful impacts on growth rates of economic health measures in non-metropolitan counties.” Whitacre, Gallardo, and Strover, http://goo.gl/Ai5bJf • We can’t say that this is also true for FTTH – no studies yet

  10. What Else Can and Can’t We Say? • We can say that broadband is responsible for 22.4% of all new jobs – SNG, http://goo.gl/vczAYT • We can’t say that this is true of FTTH – no studies yet • We can say that FTTH annually enables at least 700,000 individuals working from home to add at least $40 billion to the US economy – RVA, http://goo.gl/eGfRkG • We can say that nearly 90% of part-time businesses (which contribute $141B to the GDP and employ 6.6 million) use the Internet extensively and 54% say they could not exist without the Internet -- Internet Association, http://goo.gl/Ru4qwC

  11. What More Can and Can’t We Say? • We can say that FTTH is seen by nearly 80-90% of housing shoppers as a prime new housing amenity -- RVA • We can say that FTTH adds $5,337-$6,451 to housing values at $300,000 – RVA

  12. Thanks!

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