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THE ECONOMIC IMPACTS OF THE BTOP PROGRAM

Summary of Evaluation Study Results

ASR Analytics Stephen Rhody April 14, 2014

BTOP Background

• The Recovery Act (ARRA) instructed NTIA to implement BTOP in order to improve broadband availability, access, and adoption

• NTIA initially selected 233 projects for grant funding, benefiting all 50 states, 5 territories, and DC.

• The types of projects BTOP funded included: – Public Computer Centers (PCC)

– Sustainable Broadband Adoption (SBA), and

– Comprehensive Community Infrastructure (CCI)

• Grantee budgets were composed of both federal funds and non-federal matching funds. – NTIA had allocated approx. 3.6 billion federal dollars to the BTOP grantees as of

September 2013.

– Grantees provided approx. $1.2 billion in non-federal matching funding.

– NTIA used a portion of Recovery Act funds to develop and maintain a nationwide map containing information on broadband service, and to implement the State Broadband Data Act and the Broadband Data Improvement Act.

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About the BTOP Evaluation Study

Summary Results from ASR’s Final Report, submitted to NTIA

September 15, 2014

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Project Timeline

• Project Kickoff

• Project Plan

Q1 (9/2010-12/2010)

• Study Design

• Methodology Conference

Q2-Q3 (1/2011-6/2011)

• 15 PCC and SBA Round 1 Reports

Q4-Q6 (7/2011-3/2012)

• Interim Report 1

Q7-Q8 (4/2012-9/2012)

•15 PCC and SBA Round 2 Reports

Q9-Q11 (10/2012-6/2013)

•Short-Term Economic Impacts Report

•12 CCI Reports

Q12-Q13 (7/2013-12/2013)

•Interim Report 2

Q14 (1/2014-3/2014)

•Final Report

•Raw Data

Q15-Q16 (4/2014-9/2014)

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Grantee Locations, Evaluation Study Sample

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NTIA selected 8 PCC, 7 SBA and 12 CCI grants for inclusion in the evaluation study sample. These projects took place in 20 different states.

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Complexities Measuring Long-Term Impacts

Long timescale of many BTOP infrastructure projects

Public use data sources are expected to lag by at least a year and perhaps more

Delays between infrastructure availability and broadband adoption

Last mile changes / construction

Upgrades to hardware or software on the part of users

Training or education of user communities

Organizational planning delays

Contractual restrictions

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Evaluation Study Tasks: CCI Long-Term Impacts

Potential Benefits

• Social and Economic Indicators from Literature

Matched Pairs

Analysis

• NBM

• Census

• Service Areas

Benefit Calculation

• Benefit Population x Estimated Benefit Size

Long-Term Impact

• Calculation of Social and Economic Benefits

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Long-term impacts are based on a comparison of counties served by BTOP grants and those that did not receive grant funding. Benefits are extrapolated based on published effects of broadband on social and economic indicators.

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408 Treatment Counties

CAI Locations

APRs, PPRs, Fact

Sheets

Grantee Applications

Grantee Feedback

Long-Term Economic Impacts

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Treatment counties designated based on multiple data sources and validated by grantees. Control counties selected based on BTOP applications.

Treatment and Matched Control Counties

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Estimated Effects of BTOP on Availability

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NBM Data Calculations

Year Population Availability Availability Rate

Treatment Counties

2011 31,961,430 29,253,140 91.5%

2013 32,354,865 30,543,410 94.4%

Difference 2.9%

Control Counties

2011 32,005,404 29,535,198 92.3%

2013 32,653,752 30,420,799 93.2%

Difference 0.9%

Difference-in-Differences = Treatment Difference –

Control Difference

2.9% - 0.9% = 2.0% Increase in

Availability due to BTOP

Improved Availability

Estimated Effect of BTOP on Broadband Availability in the CCI Evaluation Study Sample Service Area for Different Populations of

Interest

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In the study sample, residents of rural census blocks received the greatest gain in broadband availability from June 30, 2011 to June 30, 2013.

Improved Availability

Population Gaining Availability Due to BTOP

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Population Overall

Population

Without Availability

(2011)

Estimated Effect

Gained Broadband

Due to BTOP

BTOP counties 217,567,674 10,679,287 2.00% 4,340,677

Rural 35,869,465 7,976,972 4.58% 1,641,921

Poverty 34,030,031 2,083,457 2.39% 812,159

Over 60 44,647,552 2,623,955 2.07% 925,657

Minority 66,680,588 2,596,642 0.54% 361,013

Non-English 21,747,513 1,072,802 0.18% 39,599

Based on the estimated 2.0% broadband availability increase from BTOP infrastructure projects, more than 4.3 million people across the U.S. gained broadband availability from June 30, 2011 to June 30, 2013.

Increased Economic Output

•

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annual increase in GDP due to BTOP = programmatic BTOP effect on availability × study coefficient ×

∑Gross County Products for BTOP counties

For a 2.0 percent increase in broadband availability, BTOP infrastructure spending would be expected to yield:

$5.7 billion (annual)

Czernich et al. (2011)

$21.0 billion (annual)

LECG Ltd. (2009)

Other Economic Benefits

• Federal and non-federal match spending:

– generated approx. 79,000 year-long jobs (ASR 2014)

– produced a short-term GDP increase of $7 billion

– produced about $1.50 in increased GDP for each $1 of federal or non-federal money spent on BTOP projects

• Potential long-term increases in employment

– 22,949 long-term jobs, annual benefit of $1B (Kolko 2010)

– 27,913 jobs over a four-year period, annual benefit $1.3B (Gillett et al. 2006)

• Potential for greatly reduced broadband prices at Community Anchor Institutions

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Link to Evaluation Study

Reports and case studies are available online:

http://www2.ntia.doc.gov/Broadband-Resources#evaluation

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