I Agree with the FCC on This One: More Broadband Access = More Jobs

by Mike Wendy on November 23, 2011

A brief note on the FCC’s recent claims that its new program to bring broadband to underserved / rural areas will increase jobs.  The agency is going to take about $4.5 billion of fees collected on your phone bill for its Universal Service / High Cost Fund and redirect that to broadband instead of plain old phone lines.

The FCC says this change will bring broadband to 7 million more Americans than have it now.  And, in doing so, it will lift U.S. employment by 500,000 jobs over the next six years.

There has been some pushback on this, especially in light of recent studies (this one in particular prepared by the CWA / EPI to support the AT&T merger), which show a more conservative jobs multiplier.

I have supported the CWA / EPI study.  I think the direct, indirect and induced jobs that will result from 55 million more Americans having 4G broadband is plausible.  Moreover, as I have written here, other studies affirm the idea that as new broadband makes it to new areas, GDP, and thus jobs, increases.

As this story shows, the FCC provides a range for the GDP / jobs advances it says will occur through its new funding focus, ranging from 190,000 to 905,000 jobs.  500,000 jobs is the midpoint.  Like the EPI study, the FCC’s math seems plausible to me.

Shifting gears but related to this – you know, AT&T has been raked over the coals for its use of the EPI study to advance its claims that its merger will benefit the American economy if it is approved.  Groups like Public Knowledge and AT&T competitor, Sprint, have been all over AT&T saying that it’s not believable jobs will be created through the merger.  The have succeeded in fast-and-loose manner to conflate the issue that whatever happens at the company after the merger (which they presume to be negative) will also occur in the economy in general.

Well, not so fast.  I think the FCC puts paid to that assertion.  In fact, the agency’s numbers dwarf the EPI study, giving the latter even greater credence.

The math seems straightforward – more broadband deployment brings more GDP growth, which results in more jobs.  Period.   I agree with the FCC on this one.

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