Study Finds Fixed Broadband Adoption and Speed Increases Spur Economic Growth

A study released in June 2022 titled "The Contribution of Fixed Broadband to the Economic Growth of the United States Between 2010 and 2020" found that fixed broadband adoption and higher speeds have spurred economic growth and benefitted consumers. 

As observed in the Telecom Advisory Services' study – authored by Raul Katz and Juan Jung of Telecom Advisory Services, LLC – the U.S. economy grew at an average annual rate of 3.3% between 2010 and 2020. Households with fixed broadband average download speeds of at least 25 Mbps grew from less than 1% in 2010 to over 65% in 2019. As a result, fixed average download speeds rose from about 10 Mbps in 2010 to about 174 Mbps in 2020. The study sought to isolate the contributions of those developments in broadband adoption and speeds to the growth of the U.S. gross domestic product (GDP) over ten years.

Notably, the Telecom Advisory Services study found that fixed broadband adoption drove nearly 11% of the accumulated growth in U.S. GPD, with speed improvement contributing an additional 11.5%. According to the study, "if broadband adoption and speeds had remained at 2010 levels, in 2020 the US GDP would have been $1.3 trillion lower ($19.6 trillion, rather than $20.9 trillion). This is equivalent to almost $4,000 annual dollars less for the average American." Additionally, as a result of fixed broadband infrastructure deployments and speed increases, "consumers receive[d] a surplus linked to the fulfillment of a whole new range of applications in the areas of communications, entertainment and information." The study found that "[a]ggregated consumer surplus at the national level increased to over $186 billion in 2020 (up from $81.6 billion in 2010) as a result of increased connectivity," and an additional $186.2 billon of consumer surplus was realized through fixed broadband speed increases.  

Importantly, fixed broadband deployment and fixed broadband speeds also have improved since the end of 2019. Data points showing increased access to broadband services over the last two years, including fiber services, are summarized in the Free State Foundation's July 1 comments to the FCC for its 2022 Communications Marketplace Report proceeding. The comments are available at FSF's website.