Communities that have had wide availability of gigabit service since 2011 or earlier have a one percent higher gross domestic product (GDP) than similar size communities that have little or no gigabit service available, according to a report from consulting firm Analysis Group.
Although that number might sound low, “it turns into billions of dollars very quickly,” said Analysis principal and report author David Sosa on a conference call introducing the report today.
Analysis Group compared economic data from 14 communities where gigabit service was available to an average of 70% of the population with 41 communities where gigabit availability averaged 1%.
“Gigabit communities are empowered communities,” said Heather Gold, president of the Fiber to the Home Council Americas, on today’s call.
Noting that some industry observers have argued that gigabit service is just a gimmick, Gold said “the skeptics are wrong.”
Gigabit Economic Benefits
Also on hand for today’s conference call were Danna Bailey, vice president of corporate communications for EPB, and former Kansas City, Kansas mayor Joe Reardon. EPB is the Tennessee utility that undertook one of the nation’s first gigabit deployments in Chattanooga, and Kansas City, Kansas was the first city to get a gigabit network from Google Fiber.
Bailey listed several important benefits that have resulted from the EPB gigabit network:
- Chattanooga’s electrical distribution system has been automated, leveraging the gigabit network’s low latency to reduce the duration of the average outage by 50%, thereby saving local businesses $100 million in lost revenues
- One thousand jobs have been created in Chattanooga just in what Bailey called the “entrepreneurial space”
- Before the gigabit network no venture capital firms were investing in the area. Now three are doing so – and they have invested $2.5 million in businesses in the community
- More than 4,500 homes and businesses subscribe to gigabit service and more than 50,000 subscribe to service at speeds of 100 Mbps or more
Reardon argued that gigabit networks are not an experiment for Google but instead are viewed as a profit-making business. He also pointed to two other companies that are pursuing gigabit network deployments. British company SiFi has received approval to build a gigabit network in Louisville – and Australian company Macquarie will own and operate the high-speed broadband Utopia network in Utah in cooperation with a group of cities.