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) |
