Broadband Communities

NOV-DEC 2017

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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NOVEMBER/DECEMBER 2017 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 75 are consistent and that broadband speed does matter. With regard to whether the relationship between broadband speed and economic output is linear or nonlinear, the results … imply that different countries have different impacts of broadband speed on the economic outputs (higher positive impacts on lower-income countries). It is therefore possible that the relationship of broadband speed on economic output is positive but at a decreasing rate. http://bit.ly/2zDjTqq Broadband Influences Rural Firms' Location Decisions Broadband Internet and New Firm Location Decisions in Rural Areas, American Journal of Agricultural Economics, January 2017 By Younjun Kim / Southern Connecticut State University and Peter F. Orazem / Iowa State University We focus on newly entering firm location decisions that would be the most sensitive to the presence or absence of local high-speed internet service. New firm location decisions are predicated on current local infrastructure, including whether or not broadband service is available, whereas most existing firms in the location entered before broadband was available in any market. … We apply our method to data taken from new firm startups in rural areas of Iowa and North Carolina. We choose rural areas because very rapid deployment of broadband eliminated meaningful variation in broadband availability in urban areas. Broadband deployment started in 1998 and spread quickly in urban areas that had the largest customer base[s]. In urban Iowa and North Carolina, 67 percent of ZIP codes had at least one provider within a year. In contrast, broadband deployment was considerably slower in rural areas, with only 35 percent of rural ZIP codes having service within one year in Iowa and North Carolina. We find that rural firms are 60 to 101 percent more likely to locate in ZIP codes with broadband availability. e broadband effect on firm entry is larger in rural areas adjacent to a metropolitan area or with larger populations. In a robustness test using ZIP code dummy variables, the effect of broadband on rural firm entry falls to 3 percent. … [T]his 3 percent estimate can be viewed as a lower-bound estimate of the true broadband effect. Federal and state governments have invested considerable resources to encourage rural broadband deployment and to reduce the digital divide between urban and rural areas. Our findings support the view that rural firms are more likely to enter a market with broadband availability. However, our findings do not suggest that universal rural broadband deployment will cause the gap in economic growth between urban and rural areas to close. While broadband availability will increase the likelihood that a firm will locate in a rural area relative to other rural towns lacking broadband, the total number of firms locating in rural towns might not be affected by broadband availability. Moreover, the complementarity between broadband and agglomeration suggests that broadband is most valuable to the rural places close to urban markets or with higher populations. e uneven deployment of broadband across rural locations has caused recent rural firm entry to concentrate in a small number of towns with service. e resulting agglomeration of firms in these towns may continue to favor firm location in these relatively few locations, even if broadband access were made universal. Future research will need to investigate whether broadband deployment into rural markets increases the total number of rural firm startups. http://bit.ly/2zE6bn7 USDA Broadband Loans Boost the Farm Economy Adjacent to Metro Areas The Impact of Broadband on U.S. Agriculture: An Evaluation of the USDA Broadband Loan Program, Applied Economic Perspectives and Policy, March 2017 By Amy M. G. Kandilov / RTI International, Ivan T. Kandilov and Mitch Renkow / NC State University, Xiangping Liu, University of Tennessee e broadband loan programs increase access to high-speed internet in recipient communities, which can raise farm sales by increasing both farm output and prices received by producers. Further, high-speed internet may drive down costs by providing information on cheaper inputs and better management practices, leading to an overall improvement in farm profits. … We find that the two USDA broadband loan programs have had positive causal impacts on farm sales, expenditures and profits in a subset of rural counties – those adjacent to metropolitan counties – but not in other types of counties. http://bit.ly/2zHPXad

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