1Gbps Broadband Boosts Economy, Home Prices

1Gbps services to the home—the new frontier of competition for triple-play providers—turn out to have a measurable economic benefit. A study from the Fiber to the Home (FTTH) Council Americas found that communities with widely-available gigabit access have per capita GDP that is 1.1 percent higher than communities with little to no availability of gigabit services.

The study examined 55 communities in 9 states, finding a positive impact on economic activity in the 14 communities where gigabit services are widely available. That plays out in multiple ways, including through the direct effect of infrastructure investment and increased expenditures, as well as shifts in economic activity (e.g. job creation and occupational changes) and productivity gains.

“Gigabit communities are empowered communities,” said FTTH Council president Heather Gold. “The study results suggest that gigabit broadband communities exhibit a per capita GDP approximately 1.1 percent higher than the similar communities with little to no availability of gigabit services. In dollar terms, this suggests that the 14 gigabit broadband communities studied enjoyed approximately $1.4 billion in additional GDP when gigabit broadband became widely available. As we look at these study results, we can clearly conclude that every community should be a gigabit community.”

Conversely, the 41 communities in the study that didn’t have widely available gigabit broadband likely experienced forgone GDP in 2012 of as much as $3.3 billion, the study claims.

There’s a personal benefit as well: having gigabit access can add more than $5,400 to the value of the average U.S. home, equal to adding a new fireplace, half of a new bathroom or a quarter of a swimming pool.

Also, sale prices for gigabit homes were 7 percent higher than for those where broadband speeds of 25Mbps or lower. Of course, this may be a product of the fact that ISPs are building out 1Gbps service to higher-end neighborhoods first—those most likely to pay for it and therefore help monetize the network investment.

Google Fiber arguably kicked off the 1Gbps competition when it announced its plans to deploy it in Kansas City in 2011. Since then, several broadband providers have announced new deployments, including AT&T, which in June announced the expansion of its “Gigapower” service to 12 communities, including Charlotte, North Carolina. And in the cable sphere, the DOCSIS3.1 rollout effort has been dubbed the “GigaSphere” initiative—Time Warner Cable notably has embraced the 1Gbps movement with a $25 million network investment to support the rollout in Los Angeles and other major markets.