Covering the Costs of Broadband and Digital Infrastructure

What can your community do about broadband and how do you invest?

Investment priorities for your community

All communities and regions are challenged in how to allocate scarce resources among various interests – especially when those interests appear to be competing for funding. Broadband should not be seen as competing for funding nor as an end in itself, but as enabling infrastructure for local economic growth and improved delivery of civic services.

SNG has developed an investment framework for broadband as an enabler of community and economic development goals. It is based on the United Nation’s Sustainable Development Goals (SDGs) adopted by 193 countries in the 70th UN General Assembly in 2015 for governments, businesses, civil society and the general public to work together to build a better future for everyone. SNG has adapted a subset of the SDGs that are applicable to industrialized countries in an increasingly digital economy.

Making the broadband investment decision

When the value of broadband and digital infrastructure is not clear nor quantified, the consequence is under-investment.

Communities and regions investment decisions based on the needs of their residents and businesses. SNG’s research shows that the majority of businesses, organizations, and households do not understand the potential value of broadband and applications enabled by the internet can have. What has been missing and what is needed is a way to personalize the return on investments in digital connectivity to communities, businesses, and residents.

When considering investments in broadband infrastructure community leaders have an opportunity – and increasingly an obligation – to look beyond the typical private sector business case of broadband and digital infrastructure. There are broader community benefits which include:

• Cost reductions for municipal services, as well as vital community institutions, such as schools and libraries.
• Cost savings for residents and businesses that make broadband more affordable, increasing broadband access and use.
• Economic growth opportunities driven by the availability and use of improved broadband services across the community.

In addition to these quantifiable benefits the improved broadband opens up new opportunities for innovative municipal services, including smart city services, for the benefit of citizens. The overall improved vitality of the community can have further positive impacts on property values and local taxes.

What kind of broadband investment?

An increasing number of municipalities have chosen a path to build and operate their own municipal broadband networks or have done so through municipal utility networks. While building and operating a network as a broadband provider is one solution, it is not the only option available to community leaders. Establishing the right broadband infrastructure in the right way, considering all the factors, leads to sustainable, long-term solutions. The right solution and its costs need to be consistent with the benefits that will result from the investment.

SNG has applied our unique and extensive research and experience to assist community leaders in evaluating the costs and benefits beyond the business case to reach the right investment decision.

Developing Policies and Plans That Help Communities

Effective broadband research empowers policies and initiatives that help communities … using empirical data to build buy-in.

Any agency at federal, state, and regional level that wants to assist communities and regions in addressing their digital infrastructure needs should start with empirical data on the current state of broadband availability and use.

While much time and effort has focused on broadband availability maps and network costs, this information is  only half the story – at SNG we call this the supply side of broadband. When you look at broadband supply gaps in isolation, the costs to bridge those gaps can be prohibitive and this results in an under-investment in digital infrastructure.

The investment drivers for digital infrastructure are the expected returns from how broadband can be effectively leveraged for social benefits and economic growth. Ultimately it is what people can and will do with broadband that delivers the desired community benefits and economic impacts. At SNG we call this the demand side of broadband. Assessing community returns on broadband investment is essential and a holistic approach to investing in digital infrastructure and programming that may not need to raise taxes, nor take on unsustainable debt. The Ammon case example shows how community benefits outweigh the broadband investment costs.

Looking beyond broadband connectivity and its value to users, having unconstrained digital infrastructure enables communities large and small to make the transformation to smart communities with smart city services that improve community vitality and competitiveness while reducing municipal costs. Ubiquitous, quality broadband connectivity is a key underpinning for essential digital infrastructure.

“Michael Curri and SNG give quantifiable reasons to deploy broadband. Their research provides hard data that is specific to a community, region, or state, not opinions, feelings, assumptions, or conjecture. Finally we have access to facts that enable informed decisions so we can confidently define a path forward and acquire favorable financing.”

Joseph Franell
CEO – Eastern Oregon Telecom
Chair – Oregon Broadband Advisory Council

Informing policies and plans

Much effort has been devoted to addressing broadband availability issues, including establishing regulatory policies, strategic plans, or funding programs. While this is needed, much less attention has been typically given to ensuring that the full potential of broadband is realized by communities and regions. Understanding the current state of broadband use is the fundamental demand driver of broadband. See how the State of Tennessee assessed their current state of broadband availability and use.

Empirical data that benchmarks the needs and uses of broadband directly from citizens and businesses can build buy-in on which gaps and opportunities to focus. Time and money are limited, so an evidence-based approach is fundamental to more effectively targeting investments that address the needs of a community or region and help them achieve desired outcomes. Furthermore, a current state of broadband assessment establishes a benchmark and provides a reference base against which to measure impacts of policies and programs over time – at SNG we call this measuring the community return on investment.

“SNG’s Research and Report helped lay the foundation for the passage of the Broadband Accessibility Act to deregulate, invest, and educate to increase broadband access and adoption in Tennessee.”

Amanda Martin, Director
State of Tennessee Broadband Office

What do you need to know?

Through SNG’s research of best practices on broadband benchmarking around the globe, as well of our years of experience in conducting current state of broadband assessments, we have defined the right metrics to make the right decisions:

• Utilization – How citizens and businesses are currently using or plan to use broadband.
• Drivers – The importance of factors that motivate broadband utilization.
• Barriers – The importance of factors that inhibit or prevent effective broadband utilization.
• Benefits – The importance of broadband for creating positive impacts for users.
• Impacts – The quantification of benefits realized by businesses and households.
• Profile – Information about user characteristics and their Internet connectivity.

Understanding both supply and demand for broadband is not only a more holistic approach, but also uncovers how to fund investments in infrastructure and programming.