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Gigabit Nets Boost GDP, Says FTTH Council

Study claims that communities with gigabit access have per capita GDP that is 1.1% higher than communities that don't.

Jason Meyers

September 23, 2014

3 Min Read
Gigabit Nets Boost GDP, Says FTTH Council

It's early days for gigabit network deployments, but the Fiber to the Home Council Americas is asserting that it already has measured a positive economic impact in regions with gigabit networks.

The Fiber-to-the-Home (FTTH) Council has released a report stating that communities with widely available gigabit access have per capita GDP that is 1.1% higher than communities with little or no available gigabit services. The council's findings are based on studying 55 communities in nine states, using metropolitan statistical area (MSA) data from the National Telecommunications and Information Administration. Of the MSAs studied, the report found a positive economic impact in 14 communities where more than half of households are passed by gigabit fiber -- to the tune of $1.4 billion in additional GDP since gigabit broadband became widely available, according to the council.

"When you look at these MSAs and see their impact on jobs and other economic benefits in local economies, you have a GDP impact as a result of the availability of gigabit services," Kevin Morgan, vice-chair of the FTTH Council Americas board of directors, tells Light Reading.

The council theorizes based on the findings that gigabit networks have a direct effect on factors such as job creation and productivity gains, and that the 41 communities in the study that didn't have widely available gigabit broadband "likely experienced foregone GDP in 2012 of as much as $3.3 billion." Economic development is frequently cited as a major reason for gigabit network deployments, particularly by the municipalities that are either trying to attract investment from network operators or taking steps to deploy gigabit services on their own. (See Minnesota Gets Giant-Sized Gigabit Rollout, North KC Says Free Gigabit for All and Connecticut Cities Crowdsource Gigabit Nets.)

Still, the council's findings are likely to incite skepticism from critics, both because of the FTTH Council's vested interest in proving the economic impact of gigabit network deployments and because deployment of these networks is still in very early stages across the vast majority of the US.

Get the latest updates on the Gigabit Cities trend by visiting Light Reading's broadband/FTTx content channel.

The analyst whose firm conducted the study on behalf of the FTTH Council agrees that it's difficult to forecast the long-term impact of gigabit networks on local economies, but says he expects the long-term effects to be similar to those found in this preliminary study.

"I think it's very difficult to predict what economies look like once gigabit is integrated into economic activity, but it's very reasonable to expect that it will be transformative," says David Sosa, principal for Analysis Group. "We're talking about a technology that is going to be just as transformative as the first wave of connectivity. It's going to change the way individuals and companies do business and interact with each other, because it's such a quantum leap in quality of connectivity."

Morgan takes that sentiment one step further, citing gigabit networks as community saviors -- a theory with which many critics disagree.

"You have areas that were once desolate, dying areas that have found new life with the emergence of gigabit services," he says. "Ultra-high speed networks are serving as catalysts for those communities."

— Jason Meyers, Senior Editor, Utility Communications/IoT, Light Reading

About the Author(s)

Jason Meyers

Executive Editor

Jason Meyers joined the editorial staff of Light Reading in 2014 with more than 20 years of experience covering a broad range of business sectors. He is responsible for tracking and reporting on developments in the Internet of Things (IoT), Gigabit Cities and utility communications areas. He previously was Executive Editor of Entrepreneur magazine, overseeing all editorial operations, assignments and editorial staff for the monthly business publication. Prior to that, Meyers spent 15 years on the editorial staff of the former Telephony magazine, including eight years as Editor in Chief.

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