Broadband In America

Page 113

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Firm
relocation
with
consequent
impact
on
employment
and
payroll
 Growth
in
the
number
of
establishments
that
benefit
from
lower
real
estate
 costs
while
serving
the
large
metropolitan
markets
 Facilitation
of
telecommuting
with
consequent
reduction
in
transportation
costs
 and
less
quantifiable
increase
of
consumer
surplus

The
research
literature
has
pointed
out
the
direct
relationship
existing
between
economic
 impact
of
broadband
and
proximity
to
urban
concentrations.
Reasons
could
range
from
supply
 side
(e.g.
economics
of
deployment
favor
early
entry
of
competitive
providers)
to
demand
side
 (e.g.
sectoral
composition
of
the
economy
emphasizing
industries
with
high
transaction
costs).

In
their
evaluation
of
the
USDA
Broadband
Loan
Program,
Kandilov
and
Renkow
(2010)
found
 that
the
communities
closest
to
urban
centers
benefited
substantially
from
loans
for
broadband
 deployment309.
In
particular,
they
determined
that
the
broadband
economic
impact
in
 metropolitan
counties
is
higher
than
in
those
rural
counties
lying
in
the
periphery
of
 metropolitan
areas.
Nevertheless,
broadband
deployment
appears
to
impact
employment
and,
 minimally,
the
number
of
establishments
in
rural
counties.
Why
is
broadband
having
some,
 albeit
attenuated,
positive
effect
in
rural
counties
adjacent
to
metropolitan
areas?
The
analysis
 the
authors
perform
by
industry
indicates
that
the
strongest
positive
contribution
of
broadband
 to
employment
and
payroll
lies
in
the
transportation
and
warehousing
sector.
This
would
 confirm
the
trend
that
metro‐adjacent
rural
counties
benefit
from
relocation
of
firms
to
the
 periphery
enabled
by
broadband
and
related
infrastructure.

A
similar
finding
was
reached
by
Burton
and
Hicks
(2005)
in
their
study
of
the
Central
 Appalachian
region,
according
to
which
new
businesses
are
unlikely
to
locate
in
areas
without
 broadband.
The
study
concludes
that,
while
broadband
is
not
a
significant
indicator
of
firm
 productivity
in
general,
for
firms
of
the
same
age,
productivity
increases
14‐17
%
if
located
in
a
 broadband
area.
As
such,
there
is
a
“tendency
for
productive
firms
to
locate
in
places
with
 broadband”.
This
finding
is
also
supported
by
a
study
of
the
impact
of
Iowa’s
Municipal
 Telecommunications
Network
(2003)
on
the
relative
success
of
the
previously
“bedroom
 community”
Cedar
Falls,
IA
over
the
neighboring
community
of
Waterloo310:

Shideler
et
al.
(2007)
also
found
that
broadband
deployment
had
a
statistically
significant
 positive
impact
on
overall
employment
in
Kentucky,
accounting
for
between
0.14%
and
5.32%
of
 overall
employment
growth
during
the
observed
period.
It
also
found
that
additional
broadband
 deployment
was
most
effective
at
stimulating
employment
growth
in
locales
that
already
had
an
 



























































 
 309

The
authors
mention
that,
according
to
a
program
audit,
it
was
found
that
between
2005
and
2008,
 broadband
loans
were
extended
to
148
communities
within
30
miles
for
cities
with
populations
greater
 than
200,000.

 310 
As
a
note,
neither
of
the
areas
can
really
be
considered
rural;
Cedar
Falls
had
a
population
of
36,000
 and
Waterloo
had
a
population
of
69,000,
making
them
much
more
“small
city”
or
suburban.

113


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