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What Are the Economic Effects of Municipal Broadband? New Study Tests Conventional Wisdom

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WASHINGTON (September 5, 2019) Does municipal broadband stimulate broadband adoption or employment growth? A new empirical study by Technology Policy Institute Senior Fellow Sarah Oh, What Are the Economic Effects of Municipal Broadband?, suggests not.

Oh investigates whether municipal broadband affects household broadband subscriptions, unemployment rates, or labor force participation rates. She concludes, “I do not find economic benefits from municipal broadband in this empirical investigation.”

Oh will present her new study at TPRC47, the Research Conference on Communications, Information and Internet Policy on September 20-21, 2019 in Washington, D.C.

Using data from the Federal Communications Commission’s Form 477 and the U.S. Census Bureau’s American Community Survey, Oh tracks deployment, adoption, and employment statistics from 2013 to 2017. The data set of American towns and cities is culled from lists published by the Institute for Local Self-Reliance and Broadband Communities Magazine.

Over 500 towns and cities have built broadband networks, generating data for investigation. Because towns’ decisions to install a network is not random, Oh deals with selection effects using a weighted control group of similar towns. She also uses regression analysis to deal with the endogeneity in decisions to build. The Coarsened Exact Matching method employed by other broadband researchers is used to compare the towns and cities.

“Empirical studies are important for city planners and policymakers who make decisions about public investment,” Oh writes. “Case studies and qualitative reports can offer insights into the performance of public projects, but empirical methods incorporate variation in heterogeneous samples.”

Contact: David Fish, 571-389-4446, dfish@techpolicyinstitute.org

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at http://www.techpolicyinstitute.org/.