Tag Archives: Bento J. Lobo

The Value of Broadband to a Community

Bento J Lobo, PH.D, of the University of Chattanooga, authored a report, From Gig City to Quantum City: The Value of Fiber Optic Infrastructure in Hamilton County, TN 2011-2035, that quantifies the benefit of the citywide municipal fiber network to the City.

The fiber network is operated by EPB, the electric and fiber utility owned by the City of Chattanooga, Tennessee. The utility serves just under 200,000 homes and businesses. EPB began offering communications services to the business community in 2000. The utility began offering gigabit broadband to residents in 2010 and offered 10 gigabit service in 2015. EPB implemented smart-grid technology to support the electric grid in 2013. Broadband speed offerings were increased to 25 gigabits in 2022. In the same year, the company started to offer fiber connections that support quantum computing.

The study concludes that the fiber network has brought $5.3 billion in value to Hamilton County and Chattanooga between 2011 and 2025. Lobo also says that the fiber network has created over 10,000 jobs during that time.

The study includes a lot of interesting statistics to support those conclusions.

  • The fiber network enabled 17.9% of employees in the City to work from home during the pandemic, compared to 9.7% for the U.S. as a whole.
  • From 2010 to 2025, there were 255 major projects that invested $6.3 billion in new or existing businesses. This was a major improvement over the decade preceding the fiber network.
  • The City has attracted numerous tech startups, particularly in the early years when the network was unique in offering gigabit speeds.
  • In June 2024, EPB achieved a penetration rate of 70% residential and a 41% business.
  • In 2025, 30% of customers are purchasing gigabit broadband.
  • Some of the community benefits come from affordable pricing. 300 Mbps service is $57.99, and gigabit is $67.99 – prices that have remained the same since 2019.

The following table is a summary of the claimed community benefits:Some explanation of the savings categories:

  • High-speed Broadband Contribution. This recognizes the financial benefit to the utility from profits generated by fiber and by savings in costs allocated to electric service. This includes an economic multiplier that assumes that for every dollar of EPB fiber revenue, an additional 67 cents of economic value us generated in the local economy.
  • Smart Grid Savings. Smart grid savings come from increased grid efficiency, peak demand reduction, reduced outages, faster restoration after storm events, reduced pollution, and reduced power theft.
  • Residential Bill Savings. These are the savings realized by the public due to broadband rates seen in similar communities that don’t have a municipal ISP.
  • Consumer Surplus. Consumer surplus refers to the difference between what a consumer is willing to pay and what they actually pay. The study uses this as a proxy to measure non-monetary benefits of broadband, such as shopping, entertainment, work and job searches, news, health care, personal finances, social networking, travel, education, and interactions with governments.

Media Coverage of Fiber Infrastructure. The City of Chattanooga has gotten tremendous nationwide publicity due to the fiber network. The high-quality exposure has drawn innovators and entrepreneurs to the city.

Broadband and Unemployment

Economists at the University of Tennessee at Chattanooga and Oklahoma State University conducted a study that correlates broadband speeds to unemployment. They concluded that unemployment rates are 0.26% lower in counties with faster broadband. They further concluded that broadband has a bigger impact on jobs in rural areas than in metropolitan ones.

The lead economist on the project, Bento J. Lobo, lives in Chattanooga and began the investigation because of the high-speed municipal fiber network in the City. He was curious if that network had contributed in a measurable way to jobs. The study also looked at FCC data from the National Broadband Map dataset and looked at 95 other counties in Tennessee.

The study looked at broadband availability and unemployment over the period from 2011 to 2016. The study measured broadband availability by considering places that have more than one landline broadband provider defined as served, with the rest either unserved or underserved. They concluded that Tennessee looks a lot like the rest of the country in that urban areas have decent broadband while broadband options in rural parts of the state are limited.

I have to wonder about the extent to which poor FCC broadband mapping data suppressed the findings of the study. I wrote a blog earlier this week that highlighted a Penn State study that showed the inadequacies of the FCC data in Pennsylvania, where the number of people that have broadband availability was overstated in every county in the state. For example, the Penn State study showed that there are counties in the state that the FCC considers as fully covered by broadband, but in which the average actual download speed in the county is at half of the FCC’s 25/3 Mbps definition of broadband. That kind of mapping error has to be affecting the results found in this unemployment study by overstating the rural areas that have good broadband.

The fact that the authors found a correlation is impressive after understanding the nature of the FCC dataset. The authors of this report say that the topic is worthy of more granular studies looking at specific counties that get broadband for the first time. At CCG we work with such counties and we’ve gathered a lot of anecdotal evidence over the years that broadband brings jobs to rural America.

Everywhere we go we see evidence that rural people are hungry for good-paying jobs. In one rural county we studied in Minnesota we saw that every single farm in the county had an incorporated home-based business that was separate from farming. Somebody at every farm was trying to supplement farming income. The rural folks in that county hoped that they could find better-paying jobs after getting broadband. In this particular county, the farms didn’t even have rudimentary DSL, and their broadband options were limited to satellite broadband or cellular data.

Parts of this county have gotten wireless broadband that is advertised at speeds between 25 Mbps – 50 Mbps. I agree with the researchers that more granular study ought to be done and it would be illuminating to have studied the rural households in this county before and after the introduction of broadband. My guess is that broadband has a bigger impact than calculated by this study.

Good broadband enables rural residents to find home-based online jobs – an exploding part of the new economy. In this particular county the unemployment rate might not change due to broadband – but household incomes are likely to increase as farm family members find better-paying jobs online to replace the ones they are tackling today without broadband. That kind of job upgrade would not be measured by looking at the unemployment rate, but would be discovered in more granular analysis.

The impacts in bigger cities like Chattanooga must be a lot harder to quantify. Again, we know anecdotally that programmers and other high-tech folks moved to Chattanooga due to the ubiquitous gigabit fiber network. It has to be very hard to somehow pinpoint those fiber-related new jobs out of a diverse big-city economy. This has to be particularly hard to pinpoint the impact of broadband in an economy where unemployment rates fell nationwide during the whole study period.