Should the Feds Analyze the Economic Impact of Broadband & the Digital Economy? (S. 645)

What is S. 645?

(Updated December 21, 2018)

Should the Feds Analyze the Economic Impact of Broadband & the Digital Economy?

This bill — the Measuring the Economic Impact of Broadband Act — would require the Commerce Dept. and the Bureau of Economic Analysis (BEA) to conduct an analysis of the digital economy’s impact on the U.S. economy at large every two years and provide the report to relevant congressional committees. The report would focus on the deployment and adoption of broadband and digital-enabling infrastructure, e-commerce and platform-enabled peer-to-peer commerce, and the consumption of media.

The report would be developed in consultation with representatives of the business community and urban Internet service providers (ISPs), representatives from all levels of government, and representatives from consumer and community organizations.

Argument in favor

Quantifying broadband’s economic impact would help the government make more informed decisions about funding rural broadband expansion, digital infrastructure, and other internet infrastructure.

Argument opposed

There are already many efforts to study broadband’s impact on the economy. This existing information is enough to help the federal government understand broadband’s impact on the U.S. economy.

Impact

U.S. economy; digital economy; broadband; digital infrastructure; e-commerce; peer-to-peer commerce; media; ISps; Commerce Dept; and the BEA.

Cost of S. 645

The CBO estimates that implementing this bill would cost $2 million over the 2019-2023 period for the BEA to coordinate with several federal agencies and produce the required analysis and reports.

Additional Info

In-Depth: Sen. Amy Klobuchar (D-MN) introduced this bill to produce current, reliable statistics on broadband’s economic impact on the U.S. economy:

“Broadband is a critical force for creating jobs, leveling the playing field, and increasing opportunity. [This bill] will help provide us with the reliable, publicly available economic data we need to make informed decisions about expanding broadband, connecting our communities, and keeping us competitive in an increasingly digital world.”  

Rep. Ryan Costello (R-PA), an original cosponsor of the House version of this bill, adds that the information coming from this effort could help create a more compelling public policy imperative for a national broadband coverage effort:

“I don't think the American public writ large fully appreciates what universal broadband capacity would mean for our country. The data that might come from this, I think will create a more compelling public policy imperative."

NTCA — The Rural Broadband Association supports this bill. Its Chief Executive Officer, Shirley Bloomfield, says broadband is needed to maintain quality of life for both rural and urban communities:

“As NTCA’s Smart Rural Community program highlights, our national broadband challenge is as much about sustainability as it is about availability. The ongoing availability of robust broadband at affordable prices is  essential to maintaining a rich quality of life and economic growth in both urban and rural America. An enhanced understanding of the economic impact of broadband will enable greater recognition of the payback that comes from sustainable access to broadband and help to inform policymaking decisions going forward.”

FCC Chairman Ajit Pai has made closing the digital divide between rural and urban communities a focus of his chairmanship. In 2016, he visited West Virginia and other rural communities to hear the difficulties they face trying to keep pace with the digital economy. In his first major policy speech in March 2017, Pai asked Congress to include broadband in the $1 trillion infrastructure package President Trump was asking for at the time.

This bill passed the Senate by unanimous consent with an amendment. It has the support of seven cosponsors, including three Democrats, three Republicans, and one Independent. It’s additionally supported by Connected Nation, NTCA – The Rural Broadband Association, CTIA, WIA – The Wireless Infrastructure Association, ITTA – The Voice of America’s Broadband Providers, and CCIA.

A House version of this bill has been introduced by a bipartisan group of legislators, including Reps. Ro Khanna (D-CA), Anna Eshoo (D-CA), Ryan Costello (R-PA), and Brian Fitzpatrick (R-PA).

Of Note: Almost everyone, including the White House, Congress, and the FCC, believes broadband expansion is critical. However, they can’t agree on how to cover the estimated $880 billion needed to connect the entire U.S.

There are multiple current estimates of broadband’s economic impact, including a 2016 Hudson Institute report on the economic impact of rural broadband, which found that rural broadband companies contributed $24.1 billion to the economy in 2015; a 2012 ITU report quantifying broadband’s impact on the economy, which found that a $6.4 billion investment in broadband would generate 37,283 direct jobs over the course of the implementation of the broadband provisions in the American Recovery and Reinvestment Act; and an April 2018 Ofcom UK report studying broadband’s impact in the OECD countries, which found that an increase in broadband connections per 100 people contributed to a cumulative GDP increase of 4.34% for the countries in the study sample.

Media:

• Sponsoring Sen. Amy Klobuchar (D-MN) Press Release

• CBO Cost Estimate

• Engadget

• Govtech

• Multichannel

• Wired

• NTCA (In Favor)