Christina Biedny

This paper estimates the relationship between broadband internet speeds and the survival and employment of business establishments. The analysis combines publicly accessible broadband speed availability data from the Federal Communications Commission with microdata on over 10 million U.S. businesses from the National Establishment Time Series database across 2015 to 2020. We use a two-stage Heckman procedure to identify and correct for attrition bias resulting from businesses that exit the dataset over the study period. Probit models estimate business survival in the first stage.

State and local governments have enacted different types of legislation aimed at improving broadband availability. Two unstudied policies of interest are: (1) “dig-once” policies requiring state-funded construction projects to notify local internet providers about the opportunity to bury conduit for easier wire installation in the future, and (2) permitting policies requiring an expeditious response from local jurisdictions regarding the installation of broadband equipment.

The federal government is pouring billions of dollars into expanding broadband internet access, namely through the $65 billion included in the Infrastructure Investment and Jobs Act. But it’s at the state level where the financial rubber meets the fiber-optic road. History suggests some states are ahead of the game while others will have to play catch-up.

The Broadband Deployment Accuracy and Technological Availability (DATA) Act signed into law in March 2020 requires the development of a national “broadband serviceable location fabric (BSLF)” containing georeferenced information on all locations where fixed broadband could be installed. This represents a significant shift from prior datasets, where broadband availability was gauged from the estimated number of people/households in each Census Block (i.e., without geolocations).