TATOA Policy & Legal Track Impact of Broadband Deployment to Local Governments October 24-25, 2013 Seabrook, Texas Jim Baller Baller Herbst Law Group, PC Washington, DC (202) Broadband and Economic Development: Fact or Fiction

And many more …. Growing List of Gigabit Service Providers

Economic Development is, and has always been, the Number #1 Driver of Community Broadband Projects

But What is Economic Development? “The purpose of local economic development is to build up the economic capacity of a local area to improve its economic future and the quality of life for all. It is a process by which public, business and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation.” World BankWorld Bank,

Economic Development Strategies Many strategies, endless variations: Government => Businesses/Institutions => Residents? Attract a few large employers, a larger number of smaller employers, or a combination of both? Increase the profitability of local businesses, the number or quality of local jobs, or some of each? Support of all local industries or target particular industries – e.g., high-tech, health care, data centers, etc. ? Community or regional approaches?

Economic Development Tools Economic Development Handbook 2013, Tax incentives (property, Tax Increment Financing, TEDA, etc.) Loans, grants, loan guarantees, or other financial incentives Special districts of various kinds, empowerment zones Attractive low-cost sites or facilities Free or accelerated franchises, permits, other approvals Support workforce development and training Upgrade roads, sewers, power Use of purchasing power to create “anchor tenancy” Help aggregate demand

Strong Anecdotal Evidence That Broadband => Economic Development Anecdotal Evidence (See, e.g., Baller Herbst, ISLR, Broadband Communities, Settles, NewCom websites) Huge and rapidly growing body of anecdotal evidence (including effect of lack of advanced capabilities (e.g., Danville, VA) Advanced broadband capabilities now a critical factor in site selection (See Site Selection Magazine) Economic development professionals starting to stress importance of advanced broadband capabilities – 76% say at least 100 Mbps necessary (See Settles surveys)

Harder to Quantify the Relationship Between Broadband and Economic Development A broadband expert, an economic development specialist, and a statistician … For fiber, it’s still very early – limited FTTH data base Circumstances vary widely Broadband only one of several critical factors (also skilled work-force; costs of labor, energy, environmental compliance, taxes; ease of doing business; proximity of universities, lenders, clusters; attractiveness of community to employees (e.g., quality of schools, things to do, etc.); transportation (airports, highways, railroads, telecom) … Timing is crucial, for all concerned

What Can and Can’t We Say? Formal Studies (collected at We can say that there’s an association between broadband and economic development We can’t say that $X of investment in broadband or FTTH will yield Y units of economic development or Z jobs We can say that “generally, broadband adoption [>60%], availability [>85%], and download speed [>10%] do have meaningful impacts on growth rates of economic health measures in non-metropolitan counties.” Whitacre, Gallardo, and Strover, We can’t say that this is also true for FTTH – no studies yet

What Else Can and Can’t We Say? We can say that broadband is responsible for 22.4% of all new jobs – SNG, We can’t say that this is true of FTTH – no studies yet We can say that FTTH annually enables at least 700,000 individuals working from home to add at least $40 billion to the US economy – RVA, We can say that nearly 90% of part-time businesses (which contribute $141B to the GDP and employ 6.6 million) use the Internet extensively and 54% say they could not exist without the Internet -- Internet Association,

What More Can and Can’t We Say? We can say that FTTH is seen by nearly 80-90% of housing shoppers as a prime new housing amenity -- RVA We can say that FTTH adds $5,337-$6,451 to housing values at $300,000 – RVA

Thanks!