David Rodeback's Blog

Tuesday, May 2, 2006

Broadband's Impact on American Fork's Economy and Quality of Life

Here is a list of activities which broadband Internet access enhances or enables. All have economic implications; most also affect the quality of life.

Note: This is the fourth in a series of articles about municipal broadband, particularly AFCNet in American Fork, Utah.

Previous Article: Broadband's Economic Impact: Public vs. Private

The second article in this series used recent econometric research to make the case that broadband enhances economic growth, whether the broadband is provided by a public entity or private companies. The third article used similar recent research to show that municipal broadband is dramatically more effective at spurring economic growth than privately-supplied broadband. It provided a relatively simple economic reason why this is the case: Most of the benefits do not return directly to the provider as profits, so the private sector is under-motivated and therefore inclined significantly to underserve the demand.

This fourth article is less dependent on research. It uses some fairly obvious reasoning and my own experience to illustrate a broad range of ways in which widely available, affordable broadband induces economic growth and improves an individual's quality of life -- in both cases by increasing efficiency and productivity. In the case of quality of life, enhanced freedom is also a benefit.

Note that the realistic alternative to broadband is not the absence of an Internet connection. It is much slower dial-up service, using a conventional modem over conventional phone lines. Some of what I do with broadband can be done adequately via dial-up service, but much more slowly, less pleasantly, and less conveniently -- so it's a lot less likely to happen without broadband. Some of what I do with broadband cannot practically be done at all with dial-up Internet access.

Economic Benefits

Economic benefits may take the form of new businesses attracted to a community or choosing to stay instead of move away, or choosing to grow locally rather than elsewhere, and so forth. But some of the benefits are more subtle: increased efficiencies which lower costs and allow companies to do more with less. For example, I administer database systems in several locations across North America. Without the speed of broadband, two or three people and a number of additional phone lines would be needed to do the same work.

My employer even benefits from my having broadband at home. It's convenient in many cases for me to do certain maintenance tasks from home after hours -- and they still get that eight-to-ten hour work day from me at the office.

Moreover, the prevalence of broadband in many cases allows companies to locate -- and their employees to live -- almost anywhere they choose, and still be able to reach a global market efficiently. Broadband also facilitates home-based businesses and telecommuting, which advance economic growth and quality of life in several ways. Many small businesses, which grow and eventually employ others, begin as home-based businesses, and many of these would be difficult or impossible to start at low cost without broadband.

If I can avoid three or four hours of commuting each week by telecommuting two days out of five, I not only save valuable time, but also save the costs of commuting, prevent a certain amount of air pollution, and slightly reduce the demand for new and wider highways, our dependence on foreign oil, and my employer's need for office space and equipment. Everybody wins! (In fact, my current commute is about two minutes, but in recent years I've commuted as far south as Spanish Fork and as far north as Ogden.)

Quality of Life

Quality of life is more difficult to measure than economic growth. But if I get more work done at lower cost for my company, I'm likely to see some financial benefits of that, which improves my quality of life. And if I can do a lot of things I have to do in my personal life more efficiently and quickly with broadband, then I have more time for other things, including leisure, parenting, and civic and religious activity. Again, everybody wins!

My List of Activities

Here is a list, probably not complete, of many common tasks and activities which broadband enhances, either for businesses or individuals. Some of them could be done with dial-up Internet access but are far more efficient with broadband. Others simply could not be done without broadband. 

• Meeting -- Broadband enables inexpensive video conferencing, which can substantially reduce employee travel costs and travel time, while still preserving some of the benefits of face-to-face meetings.
• Shopping -- Shopping with the help of the Internet is more efficient, leaving more time for other activities. Even if I end up buying from a local establishment, the Internet helps me find exactly what I want at the best price. This applies to everything from movies to cars.
• Banking -- I do a lot of banking online. This reduces time and costs for me and for the bank, and I can do it in the middle of the night, if that's when I have time, even when the bank is closed.
• Distance Learning -- A host of formal educational opportunities are now available even to students far from a given educational institution, thanks to the widespread availability of broadband. Do I really need to list the economic and quality of life benefits of improved educational opportunities, for traditional students and even for employees?
• Studying -- Whether it's my second-grader looking for a current event to report or my sophomore studying Egyptian history, broadband Internet access allows a lot more learning to be done in a lot less time. I enjoy browsing the stacks in a major research library more than most, but if I can get the information I need quickly and without leaving home, so much the better. The quality and quantity of library materials online is rapidly increasing. (Note that parents in the Alpine School District who care about math education, and therefore oppose the Emperor's New Math, largely have the Internet to thank both for the grassroots movement's growth and for the ready availability of materials for tutoring ASD's disadvantaged math students at home.)  
• Telecommuting, which I mentioned in the introduction, reduces costs and increases efficiency for both the worker and the employer, and it's even good for problems such as traffic congestion, air pollution, and dependency on foreign oil.
• Medical Consulting -- Broadband enables efficient medical consultations, such as when a family doctor in a remote area consults with a specialist in a distant city about a case, exchanging x-rays and other imagery that would take forever to transfer via dial-up or Pony Express. This reduces medical costs while simultaneously enhancing medical care.
• Participating in Good Government -- Besides the fact that a host of government functions are made more efficient and less expensive through broadband, widely available fast Internet access helps citizens stay informed about their government and about candidates who are running for public office. Wise use of official Web sites, blogs, e-mail, and other Internet-based services can enhance communication while also reducing costs to candidates, government, and even citizens at large. Broadband even helps reduce the impact of dirty campaigning, as when CBS attempted to sway the 2004 presidential election with fraudulent documents, and the blogosphere hurried forcefully to the rescue.
• Job Hunting -- When job hunting is more efficient -- the Internet makes it far more efficient -- workers spend less time unemployed, which is good for them and for the economy. Employers can identify the workers they need more efficiently. This is even is good for the government, which receives more taxes and pays fewer unemployment benefits. Moreover, a broader, more accessible job market allows for better worker-employer matches, which is good for the worker and the employer, especially in the long term. Note also that workers who need to expand or update qualifications may find the Internet very useful.
• Reaching Broader Markets for Businesses: A company in American Fork can advertise and provide services nation- and even worldwide. In a world where large populations such as the Chinese and the Indians are increasingly competitive on global scale, it's important for US companies to be the same.
• Doing IT Work at a Distance: My company, for example, can administer database systems in many locations from a single office in American Fork. At least twice as many employees would be necessary without broadband. And if we didn't do it from our office, the clients would have to hire someone in each of their offices to perform at least some of the same functions. Broadband reduces our costs, which allows us, through our efficiency, to reduce both our costs to customers and their local costs. Once again, everybody wins. Getting more for less cost is the essence of economic growth.

(Did you notice I didn't even list entertainment, though broadband makes a wide variety of entertainment products practical? I omitted it because entertainment is widely available without broadband, because AFCNet does not currently deliver the sort of entertainment products ComCast cable and other services deliver, and because my list is nice and long, anyway.)

We Must Compete

It is increasingly necessary for American Fork to compete with every other Wasatch Front municipality for economic growth. If American Fork businesses have even a slight competitive economic advantage, they'll be more likely both to stay and to grow, and the city will be more likely to attract new businesses, too. If residents of American Fork have even slight advantages in quality of life, they'll be more likely to stay and to be joined by others seeking a good place to live and work in the modern world.

The better American Fork competes among Utah County and Wasatch Front municipalities, the better the Wasatch Front will compete in the national economy, and the better the United States will compete in the world economy.

Proximity to an interstate highway and an international airport certainly helps, but is it possible that AFCNet could be American Fork's greatest single economic advantage in the next ten or twenty years? One way or another, it should be preserved, extended swiftly to businesses, and used in aggressive advertising about the advantages of living and doing business in American Fork -- even if it costs the City, meaning me and other taxpayers, some money.

The next article poses and answers a few salient questions and, admittedly, one or two that are more fanciful, but have actually been asked.

Heidi Rodeback (wife of your humble blogger) comments (5/2/06):

Excellent post, this, but I'm surprised at you: Your list omits entirely the opportunities broadband opens up for mothers. You must have posted this article late at night, or you would have remembered that, without broadband, our family would either have to forego my income, or let our children join the ever-swelling ranks of latchkey kids, something you know I would never allow. Broadband opens up worlds for mothers and children.

David Rodeback responds (5/2/06):

I see now that my list should have included . . .

Parenting: By working at home or telecommuting judiciously, a lot of parents, especially mothers, find it possible to work and to be at home when the children are home -- thus reducing the incidence of all manner of domestic danger and mischief, even if the parent really is concentrating on work. Day care costs are minimized in the bargain, and so are the costs to government and society of juvenile delinquency.

Next Article: Municipal Broadband: Questions and Answers

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