Broadband Communities

JAN-FEB 2019

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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ECONOMIC DEVELOPMENT 4 2 | B R O A D B A N D C O M M U N I T I E S | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | J A N U A R Y / F E B R U A R Y 2 0 1 9 Social Return Accounting Researchers at an Australian university propose a new way to measure the social benefits of broadband. By Masha Zager / Broadband Communities C ommunities that consider investing in broadband through municipal networks, public-private partnerships or subsidies to private providers struggle to estimate the returns on their proposed investments. Estimating the investments is not difficult – at least no more difficult than for a private provider – but the returns can be confounding. Like a private provider, a community can make a good guess about the revenues a network will yield, but unlike a private provider, a community may reap many additional benefits, such as economic development and quality of life. Communities generally don't know whether these "off the books" benefits will materialize or how to measure or account for them if they do. Some communities, such as Rio Blanco County in Colorado, decide not to estimate ROI at all – they view their fiber networks as purchases rather than investments. (See "Rio Blanco County Stays Relevant With Broadband" in the November-December 2016 issue of this magazine.) Others rely on other communities' experiences of economic growth; this kind of hopeful thinking can be risky because the potential for economic development varies from city to city and because not all cities realize their full potential. In this issue of Broad B and Communities , Michael Curri describes how cities such as Sanford, Florida, are considering the benefits of connectivity cost savings for city agencies. (See p. 40.) Several successful municipal networks, such as Santa Monica CityNet in California, have used such municipal cost savings to bootstrap their broadband projects. Yet another way to think about the benefits of public projects is outlined in a study that the University of New South Wales Sydney recently published. e three authors – Richard Holden, Alex Rosenberg and Rosalind Dixon – call their method "social return accounting." It uses social science findings to calculate rates of return for government expenditures. Social return accounting can be applied to public projects of many kinds; one example the researchers give is the Australian National Broadband Network. APPLYING SOCIAL SCIENCE FINDINGS e authors offer a hypothetical example of a proposal to lengthen the elementary-school day by two hours. Calculating the costs of such a proposal would be straightforward – costs might include extra funding for teachers, teaching supplies, utilities, transition costs and other expenses. e benefits, however, depend on the policy's effects. ese effects can be estimated through social science research. For example, a randomized controlled trial with 50 schools in a treatment group and 50 in the control group might reveal whether a longer school day improves student test scores. Further research could show whether early test scores affect secondary-school test scores, and whether those scores affect later-life outcomes, such as income, employment, health and incarceration. ese ultimate outcomes are possible to value directly. If lengthening the school day leads to better test scores and improved life chances for students, the net present value of the policy can be estimated, just as it can for any private

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