Potential Broadband Economic in Minnesota Estimated at $2.7 Billion

So at the end of last week I liked an article that was a pure business plan for broadband from a vendor perspective. This week starts with a business case or research report anyways on why the nation needs broadband (from Connected Nation).

“The Economic Impact of Stimulating Broadband Nationally” details the potential state-by-state impact of legislation to accelerate broadband access and use. The report’s findings suggest that the U.S. could realize an economic impact of $134 billion annually by accelerating broadband availability and use across all states. The map above shows the potential for broadband that exists in every U.S. state. Please take the time to review the report and the potential for broadband in the U.S.

Apparently the potential annual economic impact in Minnesota is $2,791,481,531.83.

I have to state first that I’m always a little wary of a report that comes up with such a precise number – but maybe that’s a reflection of my own inability to be both precise and accurate.

Here’s the breakdown they gave for Minnesota:

Additional jobs 4 8,691
Direct Impact Growth $2,021,172,957
Average Annual Healthcare Costs Served $11,446,205
Average Annual Mileage Costs Saved $111,405,012
Average Annual Hours Saved 64,845,051
Value of Hours Saved $647,153,606
Average Annual lbs of CO2 Emissions Cut 56,429,893
Value of Carbon Offsets $304,751
Total annual impact: $2,791,482,532

There are just a couple of things I wanted to say about the report. First the one way that Connect Kentucky (then Connected Nation) has always impressed me has been their marketing, especially marketing to legislators. Well I think simplicity is their key. They use a lot of statistics – especially statistics that include dollar signs and then they illustrate their points with a case study. Well I think that’s advocacy 101.

Second, Connect Kentucky (then Connected Nation) has received a lot of criticism for their reporting – so I thought I’d try to decipher how they came up with their numbers. (But in fairness it seems that when it comes to lobbying the legislators – I don’t think that methodology is important if the numbers and the case study sell a story that the legislature wants to buy. I don’t mean that in a bad way necessarily.)

So anyways – I think this is how they came up with the numbers above (for MN and the US). Kentucky claims to have had a 7 percent increase in broadband subscribers due to the Connect Kentucky program. So to calculate economic impact they have assumed a 7 percent increase in broadband subscribers in each state and then included that with the following factors.

Additional jobs – Based on research from the Brookings Institute “non-farm private employment and employment in several industries is positively associated with broadband use. More specifically, for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year.”

Average Annual Healthcare Costs Served – Based on surveys in Kentucky, an estimated 35% of all broadband users report saving an average of $217 as a direct result of becoming healthier through obtaining healthcare information online AND 37% report that online access to healthcare information has prevented an average of 4.2 unnecessary trips to receive medical care

Average Annual Mileage Costs Saved – Based on surveys in Kentucky, 66% of broadband users report driving an average of 102 fewer miles per month because of their online activity. (Then calculate the Government reimbursement rate of $.485 per mile.)

Average Annual Hours Saved – Based on surveys in Kentucky, the average broadband user reports saving 15 hours a month by conducting transactions online.

Average Annual lbs of CO2 Emissions Cut – this is based on the mileage calculated above. The factors are outlined in the report – but I’m not really interested in how mileage turns into CO2 – but how broadband turns into mileage

I can’t say that I think these numbers are rock solid. But I think it is undeniable that Kentucky is in better shape now than they were before the push for broadband.

This entry was posted in economic development, MN, Policy, Research by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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