We Don't Know What We Don't Know

One fascination I have with public policies is how often we have no idea whether our policies actually work. That perhaps is not surprising, given the complexity of most “human, civic and social problems.” And, for many reasons, not the least of which is ethical, we never can do controlled studies. 

Some of that uncertainty can be seen in public policies to support home broadband, where we still do not have conclusive and consistent evidence that municipal networks actually produce outcomes greater than the opportunity costs and actual investment.  

Study / report	Year	Geography	Method	Headline finding (summary)
Christopher S. Yoo & Timothy Pfenninger, “Municipal Fiber in the United States: A Financial Assessment” (UPenn)	2017 (report); published versions 2022	United States (sample of municipal FTTH projects)	Financial statement analysis of 20 municipal fiber projects (multi-year cash flow and debt repayment projections)	Found 11 of 20 municipal fiber projects generated negative cash flow over the sample period; only 2 of 20 were on track to recover total project costs within expected useful life — authors conclude many municipal projects would not cover costs without subsidies or external support. (Penn Carey Law)
Casey J. Mulligan / Jonathan Kolko (Public Policy Institute of California), “Does Broadband Boost Local Economic Development?” (Kolko, PPIC)	2010	U.S. counties / metro areas (United States)	Econometric analysis of broadband penetration vs local economic indicators	Concluded broadband expansion had limited measurable effects on local employment and wages in their models — economic benefits to residents appear limited and do not clearly outweigh large public deployment costs in some settings. (Public Policy Institute of California)
Grant S. Ford, “The rewards of municipal broadband: An econometric assessment” (Journal article / working paper)	2021	U.S. cities with municipal investments	Econometric evaluation of labor-market / economic outcomes after municipal broadband investment	Found no economically or statistically significant effect of municipal broadband on labor-market outcomes — casts doubt on large local economic returns sufficient to justify big public subsidies. (ScienceDirect)
C. S. Yoo (earlier working material / analyses summarized in press), “Municipal Fiber in the United States: An Empirical Assessment of Financial Performance” (UPenn summary & press)	2017 (widely reported)	Sample U.S. municipal FTTH projects	Empirical accounting of cash flows, break-even projections	Reported multiple high-profile municipal projects that would not repay costs within realistic timeframes (e.g., extremely long payback estimates for some cities), concluding that fiscal risks to municipalities can be material without subsidies. (Penn Carey Law)
ITIF / policy analyses (myth-debunking & affordability critiques), “Are High Broadband Prices Holding Back Adoption? / Broadband Myths” (ITIF)	2021	United States (policy analysis)	Policy literature review & data analysis	Argues that affordability/subsidy programs are likely to be a blunt tool in many contexts; recommends targeted subsidies instead of broad infrastructure subsidies because wide public subsidies may not be cost-effective in driving adoption or economic gains. (Policy critique relevant to subsidy cost-effectiveness.) (ITIF)

The issue, in all cases, is that careful investigators do point out that correlation is not causation. 

They argue that there might be a correlation between higher home broadband investment and economic outcomes, though not suggesting the home broadband investment “caused” the increases. 

The broad problem is that it never is clear whether home broadband investment follows economic growth and reflects it, or somehow enables it. Economic growth, when it happens, is likely the result of a lot of interconnected causes, and home broadband might not even be among the drivers. 

Study / report	Year	Geography	Method	Headline finding (short)
Qiang, Rossotto & Kimura (World Bank — Information and Communications for Development)	2009	120 countries (developed + developing)	Cross-country growth regressions (endogenous growth framework)	Found broadband diffusion associated with higher GDP growth: estimated sizable positive effects of broadband penetration on GDP per capita for both developing and developed countries. (World Bank)
Koutroumpis — The economic impact of broadband on growth (Oxford / OECD analyses)	2009 (and follow-ups)	OECD countries (multi-country panels)	Simultaneous macro + micro modelling / panel IV	Estimates that faster broadband adoption and higher speeds measurably raise GDP — e.g., a 10% increase in penetration or speed changes produce nontrivial % gains in GDP. (ITU)
Czernich, Falck, Kretschmer & Woessmann — Broadband Infrastructure and Economic Growth (Economic Journal)	2011	OECD panel (1996–2007)	Instrumental-variable panel regressions	A 10 percentage-point increase in broadband penetration raised annual per-capita growth by ~0.9–1.5 percentage points (IV estimates). (OUP Academic)
Briglauer et al. — Socioeconomic benefits of high-speed broadband (peer-reviewed / 2024)	2024	Cross-country / country-level analyses	Econometric analysis of adoption & speed vs GDP outcomes	Reports positive short-run and pandemic-era effects of increased adoption/speeds on GDP; quantifies significant returns to adoption increases. (ScienceDirect)
Brattle Group — Economic Benefits of Fiber Deployment	2024	United States (nationwide modeling)	Benefit-cost modeling (NPV of housing value, income, employment, social benefits)	Finds large net present value benefits from fiber deployment (authors estimate substantial NPV and argue public support may be justified because private returns under-capture social benefits). (Brattle)
Brattle Group — Paying for Itself: ACP delivers more than it costs (Affordable Connectivity Program analysis)	2025	United States (program level)	Program cost-benefit modeling (health, education, labor market savings)	Concludes reinstating ACP yields net economic benefits greater than program cost via health, education, and labor productivity gains. (Brattle)
ITU / CITI (Columbia) — The Impact of Broadband on the Economy (Raul Katz)	2012	Global literature review + case analyses	Literature review + case studies; synthesis of empirical evidence	Summarizes broad evidence that broadband has positive effects on growth, productivity, and jobs and outlines policy issues for maximizing social returns. (ITU)
Broadband Commission / OECD syntheses	2013–2020	International	Literature syntheses / cross-country summaries	Survey of literature: typical estimates show a 10% rise in penetration can raise GDP growth by 0.24%–1.5% depending on context; policy reports argue public intervention can be warranted to capture social returns. (Broadband Commission)

AI Might Not Diminish Critical Thinking, But Vested Interests Often Do

One sometimes hear it argued that fewer homes will "get internet" because of changes to Broadband Equity, Access, and Deployment Program rule changes. One also hears arguments that increased use of artificial intelligence will reduce critical thinking skills. 

Sometimes those arguments are highly questionable. There are other reasons why reality, truthfulness or factuality can be challenged, and it has nothing to do with human critical thinking or using AI. Instead, the issue is vested economic interest. 

Advocates for local or state government, for example, have a vested interest in increasing the share of federal resources they can deploy to solve problems. And sometimes they have vested interests in particular ways of solving problems. 

Consider arguments for how to bring better home broadband services to rural areas. For decades, the preference has been for a particular solution, namely optical fiber to the home, with opposition to using other arguably more-affordable and immediately-deployable solutions including satellite service and using mobile networks rather than cabled networks. 

Nobody disagrees that optical fiber to the home is the most “future proof” solution, providing it is economically feasible. The problem is that feasibility often is precisely the issue. 

FTTH Deployment Environment	Typical Homes Passed per Mile	Cost per Mile (All-In)*	Cost per Location (Homes Passed)	Key Cost Drivers
Urban (High Density)	80 – 150+	$50,000 – $100,000	$500 – $1,200	Shorter drops, existing duct/conduit, shared trenching, many users per mile
Suburban (Moderate Density)	30 – 70	$40,000 – $80,000	$1,200 – $2,500	Mix of aerial and buried, moderate trenching cost, fewer homes per mile
Rural (Low Density)	5 – 20	$25,000 – $60,000	$3,000 – $10,000+	Long distances, expensive trenching, new poles/conduit, very few users per mile

Very-rural areas might require investment so high no payback is possible. 

That is the reason a rational argument can be made that FTTH should not be built “everywhere,” and that feasible solutions must include satellite or mobile network access. The argument that “work from home” is not possible unless FTTH is deployed is almost always false. 

I have “worked from home, full time” on connections including symmetrical gigabit per second broadband and on connections offering less than 100 Mbps downstream and single digits upstream. My work has never been adversely affected. 

To be sure, my work does not routinely involve upgrading large files on a sustained basis. But most of us do not require a home-based server role, do not create long-form 4K video content all day and need to upload those files continually. 

So if it is said that changes to BEAD rules mean “fewer households will get high speed internet,” the statement is misleading or false. Fewer households might get internet access using FTTH, but that does not mean they will not get internet. And whether such access is “high speed” or not depends on the definitions we choose to use. 

Beyond that, “high speed” might not actually provide any user-perceivable advantage beyond a few hundred megabits per second in the downstream direction. Whether it makes any difference in the upstream direction might be a more-relevant issue, but even there, actual users might not find their work from home impeded. 

We sometimes forget that society has any number of pressing problems to be solved, and internet access is just one of those problems. Investments we make in any area have opportunity costs: we cannot spend the money to solve additional problems. 

Any engineering problem involves choices. Any allocation of societal resources likewise requires choices. Those choices have consequences. 

It is a perfectly logical and appropriate issue to suggest that serving more people, right now,  is a value as great as serving them with a particular solution or capability. Likewise, being efficient in the use of public resources also is a value we tend to believe makes sense. Virtually nobody ever advocates “waste, fraud and abuse.” 

But as a practical matter, it might well be a waste of scarce resources to insist on one particular solution for all home broadband requirements, when other workable solutions exist. 

For every public purpose there are corresponding private interests. Critical thinking might be said to aid decision making when scarce resources must be committed. And that critical thinking might include weighing claims that certain approaches mean “fewer homes will get internet,” when the truth is that the claim only means “fewer homes will get internet using FTTH:

• in areas where other providers already exist

• where there are locations that might not actually require access (an area might have business users but no home users)

• there are other reasons why subsidized service will still be available

• In areas too expensive to serve using FTTH.

In our justified zeal to ensure that critical thinking skills are not diminished by AI, we should not forget that critical thinking skills often are ignored when vested interests interpret reality in ways that serve those interests.