Investment in Broadband Infrastructure Can Create Cost Savings and Community Self-Empowerment

Benton Institute for Broadband & Society

Wednesday, October 23, 2019

Digital Beat

Investment in Broadband Infrastructure Can Create
Cost Savings and Community Self-Empowerment

Cat Blake, Next Century Cities

Building new broadband infrastructure is a big investment for any municipality. While the cost of that investment shouldn’t be overlooked, it’s equally important to consider the significant cost savings that can be reaped with publicly owned infrastructure.

Many cities have slashed the cost of connecting their schools to broadband by opting to build their own infrastructure, instead of continuing to pay a private provider for connections. Portland (OR), for example, had been paying an incumbent provider $1,310 per month for  10 Mbps connections to schools. When the schools were connected to the city-owned network instead, the cost dropped to just $616 per month for a 400 Mbps connection. Not only did the change drastically cut costs for the school district, but the speed of service was improved fortyfold.

Public-fiber infrastructure can also help municipal utilities operate more efficiently, saving money for ratepayers. Clarksville (TN) first built its fiber network, CDE Lightband, specifically to optimize its electric utility. The fiber-enabled, automatic-meter interface alone saves the utility $2 million per year in operational costs, and the utility has used access fees paid by the telecommunications division to build three new substations and upgrade two additional substations, investments that would have otherwise been made by going to the bond market. CDE Lightband’s success has enabled the electric utility to avoid three power rate increases, and it’s on track to pay off debts several years ahead of schedule.

Using public infrastructure to provide reliable, high-speed connectivity can drastically reduce burdens on community healthcare systems and ultimately result in even higher savings. A two-year telehealth pilot program in Frederick (MD) set up 120 patients with remote monitoring technology that tracked patients’ vitals and allowed them to check-in daily with a nurse. The patients in the program reduced their emergency room visits by over 50 percent, reduced hospital readmissions by over 80 percent, and saved Frederick’s health care system $2.1 million in avoided costs.

Individual subscribers also stand to pocket direct savings when a municipal network is built. In Cedar Falls (IA), the average annual bill for internet service via the city’s broadband utility is $546 - nearly $300 less than the average annual internet bill in peer communities.

The icing on the cake is that broadband is relatively affordable infrastructure. With the same money it would take to build a quarter mile of a light rail line, a city could build about 87 miles of an underground fiber network.

Investment in publicly owned broadband infrastructure not only produces dramatic cost savings for municipalities, but fosters higher quality of life and stronger communities.

Cat Blake is the Senior Program Manager for Next Century Cities, an organization that supports more than 200 member communities committed to expanding broadband access for residents.

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Kevin Taglang

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
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