With the hundreds of billions invested by the private and public sectors, it is clear that broadband is a critical infrastructure. But, how much is it worth at the individual residential and the greater regional level? Oklahoma State Professor Brian Whitacre and Purdue Associate Professor Roberto Gallardo provide expert insight on this question in the above interview.

Whitacre discusses his now-published paper, The fibre broadband housing premium across three U.S. States. Texas, Iowa, and Minnesota were the three states studied. His study estimates that during the 2015-2021 period, the premium for being a fiber-fed household was between 1 to 1.5%

The presence of fibre availability for houses in all three states is associated with higher housing prices on
the order of 1–1.5%.

Article in Regional Studies Regional Science, published February 2024, page 49 (page 13 in the PDF)

There is nuance in these findings, as the fiber premium varies from locale to locale and over time.² Whitacre suggests a low-end increase in rural housing value of $36.9 billion if the findings are extended across the United States.

The Value of Fiber to a Community

Given the increase in the value of an individual home, does it make sense for homeowners and building owners to proactively build fiber networks based on the expected increase in their home value? This question was posed in a 2015 Viodi article. It points to the larger question of how fiber impacts regional economies.³ That touches upon some of Professor Gallardo’s research at Purdue, where he is also Vice President of Engagement for the Purdue Center for Regional Development (PCRD).

Gallardo indicates that their preliminary numbers suggest Indiana’s broadband investments have led to, on average, about 1,600 jobs per year over the four years before the above interview.⁴ This is an ongoing area of research for Gallardo and his team. Whitacre points to earlier work by North Carolina State University Professor Emeritus Mitch Renkow on the positive economic impact of the USDA’s Community Connect grant program.

Still Learning

With the ongoing investment of public monies to build out rural networks and close the digital divide, the ongoing research by Whitacre and Gallardo is more important than ever. It provides insight into the return on investment. Just as important, it is valuable for informing where those monies should be spent.

Finally, their most recent research paper, Who is Using the Internet at Faster Speeds, provides insight that deserves policymakers’ close attention as its data overturns some commonly held assumptions about the digital divide. One point made in this paper points to the importance of fiber and its ability to deliver symmetric services.

For many years the emphasis has been on download speeds, but as more and more workers not only consume but
produce, symmetrical broadband (identical download and upload speeds) will become not only instrumental but a competitive economic advantage.

Who is Using the Internet at Faster Speeds? Published May 17th, 2024, Page 9, Roberto Gallardo & Brian Whitacre

[added 5/20/24] – NTCA just published an excellent guide (PDF) that discusses the importance of Key Point Indicators in assessing how to leverage broadband to maximize economic development activities. The questions at the end of the document illustrate how broadband touches multiple sectors of a local economy and how the different sectors are interconnected.

ViodiTV coverage of NTCA’s SRC Live courtesy of Calix and NTCA.

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Footnotes

1. The Fiber Broadband Association suggests a 3-5% home value premium in its 2023 survey (page 10) of consumers. ↩︎
2. An example of the power of fiber for rural economic development is given in this interview with Tal Jones, Economic Development Director of FOCUS, and PRTC (fiber service provider) CEO and GM, Keith Gabbard.  ↩︎
3. See Impact of Next Level Broadband Connections and Indiana Connectivity Program Investments. ↩︎