TPRC 2024: The 52nd Research Conference on Communications, Information and Inter

Link to paper

Abstract:
More than one-fifth of the US population does not subscribe to a fixed broadband service despite broadband being a recognized merit good. For example, less than 4% of citizens earning more than US $70k annually do not have broadband, compared to 26% of those earning below US $20k annually. To address this, the Federal Government has undertaken one of the largest broadband investment programs ever via The Bipartisan Infrastructure Law, with the aim of addressing this disparity and expanding broadband connectivity to all citizens. We examine broadband availability, adoption, and need for each US state, and then construct an Input-Output model to explore the potential macroeconomic impacts of broadband spending on Gross Domestic Product (GDP) and supply chain linkages. Our analysis indicates that higher funding allocations appear to be allocated to areas with poorer broadband. While this may be logical, as it illustrates funding going to areas most in need, this could not have been assumed a priori given politically-motivated funding is not always rationally allocated. In terms of macroeconomic impact, the total potential indirect contribution to US GDP by the program could be as high as US $84.8 billion, $32.7 billion, and $9.78 billion for the Broadband Equity, Access, and Deployment program, the Affordable Connectivity Program, and additional programs, respectively. Thus, overall, the broadband allocations could expand US GDP by up to $127.3 billion (0.10% of annual US GDP over the next five years). We contribute one of the first economic impact assessments of the US Bipartisan Infrastructure Law to the literature.