Expanding Broadband Access to Businesses Nationwide

November 21, 2013 by David Beede, Research Economist, Economics and Statistics Administration, Anne Neville, Director, State Broadband Initiative, National Telecommunications and Information Administration

Just as more Americans are finding broadband essential to life at work and home, most businesses also need high-speed Internet service to remain competitive.  The nation has made good headway in efforts to expand broadband access to work places, according to a new report from the U.S. Commerce Department’s National Telecommunications and Information Administration (NTIA) and Economic and Statistics Administration (ESA).

The report, “Broadband Availability in the Workplace,” comes a week after Commerce Secretary Penny Pritzker unveiled the department’s “Open for Business Agenda,” which prioritizes supporting the digital economy as a great engine of economic growth in the 21st Century. The agenda also highlights the importance of data, such as this new report, to power the economy and help inform business decisions, enable start-ups, and fuel new companies.

Nearly all jobs in the United States are located in areas with at least basic wired or wireless broadband service, which is defined as service with an advertised download speed of 3 megabits per second (Mbps) and an upload speed of 768 kilobits per second (Kbps), according to the report. Using data collected by NTIA’s State Broadband Initiative (SBI) and the Census Bureau, which is part of ESA, the report also finds that between 2011 and 2012 the number of jobs located in areas with access to broadband download service speeds of 50 Mbps or greater increased from 56 percent to 75 percent.  Employers located in areas that have robust broadband may have an advantage compared with otherwise similar competitors. (Note that the analysis looks at the change over time in broadband availability to jobs in 2010, rather than whether businesses relocated jobs as a result of better broadband.)

Urban areas have greater access to high-speed broadband than less populated areas, the new report shows. Not surprisingly, jobs that are most dependent on broadband technology such as the information sector are more likely to be located in urban areas. In fact, 95 percent of information jobs – which include those that create and distribute entertainment and software, process data, or transmit data and communications – are located in urban areas compared with about 90 percent of all jobs. The report found that 83 percent of information sector jobs, which account for 2.3 percent of all jobs in 2010, were located in areas where broadband with download speeds of 50 Mbps or greater was available.

Manufacturing jobs, which make up 9.2 percent of all jobs in 2010, are more concentrated in “Very Rural” or “Exurban” areas, as defined in the report, where there is less high-speed broadband available. In 2012, 69 percent of manufacturing jobs were in areas with 50 Mbps or greater download service compared to 75 percent of all jobs. Still, there has been progress in recent years in bringing high-speed broadband to these areas. In 2011, only 49 percent of manufacturing jobs had access to broadband at these speeds. Access to broadband with download speeds of 50 Mbps or greater in Very Rural areas grew from only 18 percent in 2011 to 33 percent in 2012, while in Exurbs, it went from 36 percent in 2011 to 53 percent in 2012.

For some communities, having high-speed broadband can be an important factor in an employer’s decision to stay or move to an area. The report highlights one rural Utah medical record and health information technology firm that considered relocating because it lacked adequate broadband, which caused work interruptions and lost productivity. The Utah Broadband Project, which is the NTIA-funded State Broadband Initiative in Utah, was able to help the firm identify a solution that allowed it to remain in the same rural community.