Published March 17, 2021

 

 

Key Points

 

Broadband internet is defined by the Federal Communications Commission (FCC) as download speeds of 25 megabytes per second (Mbps) or more and upload speeds of 3 Mbps or more, which can be annotated as “25/3” service. 10/1 service, a category pertaining to federal funding that will be discussed below, thus refers to download speeds of 10 Mbps and upload speeds of 1 Mbps.

 

Expanding Telehealth Improves Health and Saves Money

Telehealth is the fastest growing method of healthcare delivery in the United States, and its usage has increased even faster due to expanded regulatory permissions in response to the COVID-19 pandemic.  Telehealth improves access to care by:

 

In 1954, President Eisenhower announced he would cancel a planned decrease to the gas tax so that $225 million could be added to the budget for the federal highway program.  35 years and almost $468 billion (in 2011 dollars) later, Eisenhower’s dream of a “mighty network of highways” was completed, facilitating $15 trillion worth of freight.  Investing in broadband in the 21st century is equivalent to building our national interstate highway infrastructure in the 20th.  It is vital to the future strength of the economy, creates jobs, and brings significant benefit to rural communities.

 

Barriers to Broadband Expansion

Expanding broadband access in rural areas is difficult.  Geographic barriers such as hills and valleys interfere with signal strength and make it more expensive to lay and maintain cable.  Furthermore, with fewer potential customers per mile of cable and less than 40% of rural Tennesseans voicing a willingness to pay for a subscription (due to high costs and unreliable signal strength), internet service providers (ISPs) have expressed concerns over low return on investment (ROI) for expanding broadband to underserved areas.

Demand for broadband is nevertheless high.  A recent study of rural Tennesseans (with the average yearly full time income of $25,000) were willing to travel up to 20 miles to a library to use the broadband connection for research, work and educational purposes and to help children with schoolwork, demonstrating a desire for faster internet speeds.  The only limiting factor is that there is not currently sufficient internet infrastructure for households at this income level to justify subscribing at current market prices (about $60/month) for the quality of services available in these areas at this time, even though the demand for 25/3 service is high.

 

Efforts to Improve Broadband Access

The FCC’s Connect America Fund provides federal grant money to improve broadband infrastructure in underserved areas by awarding it to areas where ISPs are capable of providing at least 10/1 Mbps service.  However, due to a lack of local ISPs with this capability in numerous areas, the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) found that about 160,000 homes were not eligible for these funds.  TACIR concluded that it could cost between $125 and $799 million to establish broadband access for these underserved communities that do not qualify for federal funding.

That same year, the Tennessee Broadband Accessibility Act passed, establishing a partnership with the State Library and Archives to provide grant money to areas that successfully apply to be certified as “broadband ready communities.”  This bill also streamlines the application process and permits electric cooperatives to provide internet service, as opposed to an ISP acting alone.  These cooperatives are eligible for grant money that can reduce up to half the cost to ISPs for laying the “final mile” of cable (the most expensive and difficult aspect to broadband infrastructure development).  This significantly alleviates concerns over low ROI.

The program has had a strong start – $45 million in grants were raised in the first three years of this program – but this is still far short of the need estimated by TACIR.  In 2020, Governor Lee awarded $61 million to multiple broadband providers, using money administered from the federal government in response to the COVID-19 pandemic.  For the 2021-2022 state budget, Governor Lee has proposed a non-recurring increase to broadband development from $15 million to $200 million.  “Whether it’s running a small business, accessing virtual learning or accessing health care via telemedicine, slow internet speeds have many in rural Tennessee left at a disadvantage,” he said in his third state of the State address, identifying key social determinants of health affected by broadband accessibility.  “A significant, one-time investment, combined with significant private investment, will get broadband to just about every community in Tennessee, and tonight, that’s exactly what I’m proposing.”

 

The Success of Hamilton County

Chattanooga became the first city in the United States to provide public broadband internet to all of its residents in 2010.  With a loan of $169 million and a $111 million grant from the federal government, Chattanooga’s Electronic Power Board (EPB) laid the necessary fiber optic infrastructure.  In order to “break even” on the investment, EPB would need 42,000 internet subscribers.  By 2016, they had 83,000.  An independent study by UT found that between 2011-2015 the broadband infrastructure was directly responsible for approximately $1 billion of economic growth, including the creation of up to 5,200 new jobs, with returns far outstripping investments at a faster rate than expected.  It has also improved competition, with Comcast and Telecom now offering faster speeds and better prices across Hamilton county.  While not every community needs a public fiber optic network as the means to create broadband infrastructure, it is clear that investing in that infrastructure leads to significant economic returns and subsequent growth.

 

Policy Brief Authors:
Jeremy Kourvelas, UTK MPH student
Katie Cahill, PhD, Associate Director, UTK Howard H. Baker Jr. Center for Public Policy
Carole Myers, PhD, Professor, UTK College of Nursing
Jennifer Tourville, DNP, UT Director of Substance Misuse Outreach and Initiatives
Sreedhar Upendram, PhD, Assistant Professor, UTIA Agricultural and Resource Economics

Secondary Authors:
SMART Policy Network Steering Committee Members