Universal broadband coverage could add $160B annually to US economy

The news: A national high-speed internet initiative providing universal, reliable internet may add $160 billion per year to the US economy, according to a new study conducted by The Aspen Economic Strategy Group (AESG), per Bloomberg.

  • The study—based on national survey data of more than 43,000 US working adults—determined that universal high-quality, fully reliable internet access would increase labor productivity by 1.1% in coming years and allow larger portions of the US workforce to work from home.
  • Re-optimizing the workforce to spend more time at home could potentially boost productivity by 4.6% relative to pre-pandemic situation levels, the authors argue, thanks in large part to savings in commuting time.
  • In addition to the potential economic benefits of expanded access, the paper’s survey results found that subjective well-being was higher during the pandemic for those with better home internet access.

Why this matters: The study is one of the clearest attempts yet to assign a dollar value to expanded internet access. In the past, researchers have struggled to pin down these economic benefits, due in part to methodological issues with Federal Communications Commission (FCC) data, which critics say undercounts the number of residents who lack broadband access.

The problem: The FCC estimates that some 18 million US residents still lack physical access to broadband, though that figure is likely much higher.

  • Similarly, around 18.5 million US households lack broadband access because of its cost. Those making under $30,000 per year shoulder most of the burden.
  • Earlier this month, The Verge released an interactive US map based on an anonymized Microsoft dataset, illustrating US counties where less than 15% of households use internet at broadband speeds (25mbs). Many of these counties were clustered in rural areas.

The bigger picture: Expanding internet access is a major component of President Biden’s proposed $1.2 billion infrastructure bill, which would set aside $65 billion for investments in broadband nationwide.

  • In its initial announcement, the administration outlined a plan that would seek to provide universal high-speed internet coverage to all US residents by 2030.
  • The administration’s efforts follow a slew of other moves by Democrats in Congress and the FCC to increase broadband access.

Will it work? Additional reports highlighting the economic benefits of expanded broadband access will likely increase support for spending efforts that have already gained some bipartisan support in Congress. The pronounced impact on rural areas—often under Republican governance—could also help drive support for the spending initiatives.