Households with broadband save $11,219 a year!

The Internet Innovation Alliance comes out with their annual report on how much a household with broadband can save – just in time for us to be thankful. This year we can be thankful for $11,219 in savings – and takes into account the average cost of a broadband connection and mobile plan.

The savings is up from last year ($10,504).

Here’s the break down…

iia_costsavings2016

Economic Impact of Rural Telecommunications Industry in Minnesota? $900+ million

Last April I wrote about the Hudson Report on the Economic Impact of Rural Broadband Industry. But back then I only had the executive summary – not the full report. Recently I got the full report with details specific to Minnesota.

The report quantifies the impact rural telecom industry has on the economy nationally…

Rural broadband companies contributed $24.1 billion to the economies of the states in which they operated in 2015.  Of this, $17.2 billion was through their own operations and $6.9 billion was through the follow-on impact of their operations.  The total represents the amount added to the Gross Domestic Product by this set of firms.

And in Minnesota (in 2015)…

  • Direct Impact – $659.4 million
    Additional Impact – $251.8
      million
    Total Impact – $911.3 million
  • Number of Jobs –  2,527
  • How much went into rural economies? $279.1 million
    How much went into urban economies? $632.2 million

They also report on Regional Input-Output Modeling System indicating that in Minnesota and the Rural Broadband industry:

  • Output is: 1.3819
  • Earnings is: 0.2373
  • Employment is: 4.7036

These numbers attempt to estimate how much a one-time or sustained increase in economic activity (such as State grants, CAF money, other inputs) will be supplied by industries located in the region.

I think it’s worth noting that investment in rural broadband does not benefit only rural economies. In fact, the urban economy gets the greatest boost. And investment yields output, earnings and employment.

It makes the case for public-private funding. The state benefits when jobs increase and funding is spent in other industries to support telecom and telecom companies benefit with added earnings.

Minnesota is Number One for Internet Usage

Entrepreneur Magazine just called out Minnesota as the state with the highest rate of Internet usage…

According to data from the U.S. Department of Commerce’s National Telecommunications and Information Administration, you won’t find the most connected people on the coasts, or deep in the heart of Texas, but largely in the Midwest. Just under three-quarters of U.S. households were online in 2015. But the most connected state isn’t located on one of the coasts — it’s in the heart of the Midwest…

In 2015, 83.1 percent of Minnesotans, or 4,307,850 households, used the internet. In 1998, 1,889,017 (then 41.5 percent) households were online.

It’s great to see Minnesota rank highly! However before we drink too much champagne, there are a couple of caveats – they are talking about Internet usage, not necessarily broadband. And they are talking about use anywhere (library, work, coffee shop, school), not necessarily home. We come in third for home access with 76.2 percent, which is good but still Internet access – not necessarily broadband.

That being said, it is nice to see Minnesota at the top of the list and I think it speaks well of the folks doing digital inclusion work in the state and our natural tendency to be well above average!

Broadband Recommendations: What can Minnesota learn from North Carolina?

The Institute for Local Self Reliance (ILSR) recently unveiled a report on Broadband Connectivity in North Carolina. Here’s a quick summary…

Recognizing the state’s need for better Internet connectivity, the Broadband Infrastructure Office issued a report in mid-2016 entitled, “Connecting North Carolina State Broadband Plan.”

That plan is essentially a “one-hand-on-deck” policy that naively pins the future of the state on the big telephone and cable companies. North Carolina should adopt an “all-hands-ondeck” approach that recognizes the need for a mix of business models in providing essential infrastructure across the state.

Local leaders are better equipped to solve their problems than micro-managers from Raleigh. Some communities will embrace cooperatives, some may find ways of attracting private companies, and some may choose to work with Wilson or duplicate it. This report recommends that North Carolina remove its barriers to local choice and focus on encouraging more sources of investment rather than focusing largely on firms based outside of the state.

Here are the specific recommendations…

North Carolina should embrace an all-handson-deck philosophy. Given the tremendous need for improved Internet access, the state should welcome all manner of investment rather than restricting those most impacted: communities themselves. We offer the following recommendations:

  1. Remove barriers to cooperative investment.
  2. Allow communities to decide for themselves if a municipal investment is appropriate, and if so, what business model most fits local needs, challenges, and culture.
  3. Expand Internet access from existing locally accountable networks.
  4. Create a state program to offer matching grants or a revolving loan fund.

mn-coops-mapMinnesota has done well to get a state matching grant to support, but at the recent Broadband Communities Conference, ILSR, handed out a very abbreviated – but helpful – one-sheet on how Cooperatives and Local Governments Can Solve Rural Digital Divide that included some Minnesota Statues that they say discourage local governments from investing in next-generation infrastructure…

Minnesota Statue 237.19 (from the year 1915) requires that a municipality receive a majority vote of at least 65% in order to “operate a telephone exchange.” Referendums are often one-sided affairs where incumbents outspend community network advocates anywhere from 10:1 to 60:1.

Minnesota Statue 429.021 Section 19 only allows a municipality to build Internet access infrastructure if those services are not available and will not soon become available and the service will not compete with private services.

These two laws strong discourage local investment in next-generation  networks, even where the private sector is not investing, because their vague definitions open governments to lawsuits.

House buyers look at broadband – need lower prices without it

Telecompetitor reports on the results of a recent Fiber to the Home Council survey…

More than 90% (91%) of respondents said quality broadband was “very important” in choosing a community in which to live — second only to “safe streets,” which was cited by 98% of respondents.

They also mention another, similar survey with similar results…

FTTH is also seen as adding value to homes and real estate. Again, access to very high speed and reliable broadband (88%) ranked second, this time following laundry rooms, among amenities seen as increasing the value of single-family residences and first (81%) in terms of multi-family housing.

How much lower in price would a single-family home or condo unit without very fast and reliable broadband need to be to entice respondents to move in? According to FTTH Council’s findings, a discount of $8,528, or 2.8%, for a $300,000 MDU condo and $80, or 8.0% of a $1,000 a month MDU condo rental. The corresponding discount to purchase a $300,000 single-family residence was $9,734, or 3.2%.

SNG’s Broadband Economic Impact Estimate for Minnesota

sng-mn-modelIt’s fun sifting through documents that emerged at the Broadband Community Conference last week. Today’s highlight is from SNG (Strategic Networks Group), a Broadband Economic Impact Model, which is a dashboard of metrics estimating of economic impacts from business adoption of eSolutions for selected geographies and industry profiles.

Here’s a description of their method..

SNG’s Broadband Economic Impact Model applies reported utilization data from tens of thousands of businesses and infers what increasing awareness and use of Internet applications could mean for your region. More specifically, businesses surveyed by SNG across America have been asked to quantify the economic impacts from using 17 specific Internet applications. These numbers tell us how incremental increases in meaningful across multiple businesses will drive significant economic growth.

And the bottom line results for Minnesota…

Broadband is a game changer – try to imagine a community that never developed roads – this primer might help

arcLast summer, the ARC (Appalachian Regional Commission) released a Broadband Planning Primer and Toolkit. I’ve been waiting for a chance to check it out. The day finally came.

I think it will be useful to a wide range of audiences.

It’s a primer so it includes the what and why of broadband. I’ll just copy my favorite line:

Try to imagine communities that never developed roads and electricity and you will understand the dismal prospects that confront unconnected communities.

They do a nice job of explaining backbone vs middle mile vs last mile and the range of transport options.

They include some policymaker-ready statistics…

  • Increasing broadband access 10 percentage points increases Gross Domestic Product 1 percent
  • Doubling broadband speeds for an economy can add 0.3 percent to GDP growth
  • 80 new jobs are created for every additional broadband 1,000 users

And at the local (home) level

  • Broadband speed upgrades affect development: Upgrading from 0.5 Mbps to 4 Mbps increases income by around $322 per month
  • Online job searches result in re-employment 25 percent faster than traditional searches

They go detailed for community leaders that may find themselves in a position to have to understand the technology, policy and funding aspects of broadband. They outline the various types of connectivity in the Appalachian Region, which with a few exceptions, is pretty similar to rural Minnesota. (We have trees and cold; they have mountains.)

The information is practical and easy to read. For example here are two segments from the report that help explain the problem with getting broadband to rural areas…

In areas where DSL service is not available, a number of factors can conspire to make the infrastructure inappropriate or insufficient to support new deployments. In some areas where homes are more than two and half miles or so from the central office or are remote, the distances are simply too great for DSL to be deployed. While DSL can potentially traverse copper for 15,000 feet, the quality and thickness of that copper often restricts providers to serving homes within 10,000 feet of their facilities. There are also instances in which copper has been overleveraged or shared between multiple customers using things like multiplexers, which can use a single pair of copper to carry multiple voice signals. The very measures that once allowed for economical deployment of voice service now stand in the way of deploying DSL service. This leaves some rural providers in the unenviable position of deploying new copper into rural areas.

Cable television service has proliferated in areas where household density is in excess of 10-15 households per mile. There are areas where the cable infrastructure penetrates areas of lower population density, but they often involve special circumstances and/or subsidy. … Many people in rural areas are disconnected from the cable infrastructure even though the cable infrastructure passes their residence. Many farms and homes in rural areas are hundreds if not thousands of feet from the roadway, and the cost of bringing the cable up their driveways is in the thousands of dollars, which often prevents them from becoming customers

Then they outline models of broadband deployment:

  • Public-Private Partnership
  • Private-Sector Led
  • Private-Supported and Government-Led
  • Joint Ownership
  • Municipal, Electric and Telephone Cooperatives
  • Municipal Deployments

They go into the same depth with financing models. Again, there’s a focus on the Appalachian – but much of the info works here too.