Does FTTH Lead to Economic Growth?

If fiber to the home could show clearly that it boosts service provider revenue and reduces cost, more observers would be unabashed supporters. But large-scale deployments in the United States are relatively ambiguous, one might argue. Verizon has the overwhelming footprint and much of the total industry experience, and observers still cannot agree on whether FiOS has been a clear success or not.

Likewise, nearly everybody seems to believe that fiber to the home is required for economic development. But even there, the impact is hard to discern. David Russell at Calix tried to test the hypothesis, looking at communities where FTTH had been in place for at least five years, was deployed ubiquitously and was deployed at a regional commercial center.

Based on what is available today (data through 2008) Russell looked at the growth between 2004 and 2008 and compared the results from the towns served by FTTH with the rest of their states. It turns out that of the five (Bristol, Va./Bristol, Tenn.; Dalton, Ga.; Jackson, Tenn.; Reedsburg, Wisc.; and Windom, Minn.) only three did better in business creation than other towns in their state. In both Dalton and Reedsburg, business creation trailed other areas of Georgia and Wisconsin, respectively.

When it came to job creation, only Bristol and Dalton did better than other towns in their states. But that's not to say they added jobs. Bristol actually lost three percent of jobs and Dalton nine percent.

So only the Bristol area did better than the rest of its state (Virginia) in both job and business creation.

Unfortunately, when economic data is available for the 2008 to 2010, the data isn't likely to improve, given the effects of the Great Recession of 2008. So it is likely to remain more a matter of faith, not fact, that FTTH indeed clearly underpins economic growth.

FTTH's Benefits Are Not Obvious