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10 Japan Broadband speed (Mbps) UK Germany France Italy Spain 6 Sweden South Africa Brazil Mexico China (urban) 4 India 2 00 20,000 40,000 60,000 Figure 1: Higher broadband speeds are associated with higher household incomes. OECD BIC Diference in household income (USD PPP) WHY BROADBAND SPEED INCREASES INCOME Households beneft from increased broadband speed in several ways. Access to advanced services, such as videoconferencing, boosts personal productivity and allows more fexible work arrangements through teleworking and telecommuting. In addition, as previous studies have shown, broadband helps people become more informed, better educated and enriched – which may also add to their incomes. As overall broadband penetration increases, households without broadband or with slow broadband at home will fnd staying competitive in the labor market more difcult. In efect, they need faster broadband just to maintain their place in the economy. Tis labor market competition efect could explain why broadband thresholds seem to be progressing to ever higher levels. Te researchers say that further investigation into the relationship between broadband speed and services used is needed. Simply having a very high-speed connection is not enough; the key to gaining any beneft may be how a household uses its connection. v US 8 2,500 2,000 1,500 1,000 500 00 512 KB 2 MB 4 MB Broadband speed (Mbps) Figure 2: Estimated gains in income based on access to broadband, per speed OECD countries BIC countries (sample average speed 2010 = approx 4 mbps) Household income (USD PPP) by a richer service ofering related to both work and private life and a higher level of technology maturity among enterprises and public institutions. As shown in Figure 2, the researchers found that the minimum efective speed is at least 2 Mbps for OECD countries, and the greatest expected increase in income occurs when households go from having no broadband to 4 Mbps, gaining around $2,100 per household per year, or $182 per month. For the non-OECD countries, the threshold level seems to be at or below 0.5 Mbps. An additional annual household income of around $800, or $70 per month, is expected to be gained by introducing a 0.5 Mbps broadband connection in these countries. Te income levels have been adjusted by comparing sample income with actual pretax income. Te adjustment factor for OECD is 0.78 and 0.58 for BIC. (sample average speed 2010 = approx 2 mbps) 120 10 320 46 0.5-4 4-8 8-12 8-24 0.5-4 4-8 8 to 12-24 Broadband speed (Mbps) Figure 3: Estimated monthly increases in household incomes due to broadband speed upgrades NOVEMBER/DECEMBER 2013 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 103