Business Analytics Professor, Students Unravel Mystery Surrounding Fiber-Optic Broadband Benefits

Connecticut’s 169 towns and cities now have some critical new information to consider as they examine whether to invest in ultra-fast, fiber-optic based broadband internet.

Professor Sudip Bhattacharjee and graduate students in UConn’s Business Analytics and Project Management (MSBAPM) program ranked each municipality on a three-tier scale, highlighting which are most likely to benefit from adding broadband service.

Among their fascinating findings was that in areas where broadband service is available, median income increases. Faster internet appears to attract better paying jobs for residents of those municipalities.

Dozens of Connecticut towns and cities are now investigating whether it would be worthwhile to invest in broadband internet networks as part of a public-private partnership.

While the potential benefits are many, the expense is substantial, with a 30-year payback period based either on service revenues or other financial means of reimbursing the investment by the private partners.

The UConn research project has been a true benefit to municipal leaders, Bhattacharjee said, because it is the first time that vast amounts of data had been gathered and analyzed, from more than a dozen federal, state and local agencies, to predict the impact of broadband.

As part of their project, the researchers demonstrated that the economic benefits of broadband internet are impressive. Cities and towns that have the technology not only attract more business and create more jobs, their residents also enjoy a higher average income.

They determined that regions with existing business centers stand to reap the greatest benefit, while suburban areas with retail centers would also do well. More rural communities were less likely to see immediate business expansion.

“It’s no secret that young people are leaving our state. If broadband technology helps the state to create jobs, that will be great,” said Bhattacharjee, a faculty member in the Operations and Information Management Department at UConn.

The project was particularly complex because the researchers had to cull data from so many sources. At the end they analyzed close to 100 parameters and then presented in an easy-to-understand format. The UConn team provided the research to Connecticut cities and towns at no expense, which was an asset because the municipalities had no funds to pay private consultants.

Furthermore, all of the New England states and New York are investigating broadband technology, so there is an urgency to make decisions and move forward, Bhattacharjee said.

The broadband project falls under the domain of the state Office of the Consumer Counsel, which has since partnered with the UConn School of Business and the Connecticut Technology Council to conduct two internet surveys, polling residents and business owners about their internet speed, cost, and usage and satisfaction level with their options.

“That should give us an idea of what kind of demand is pent up,” Bhattacharjee said. “A study of this kind has hardly been done before. The FCC is very interested in what we find.”

Only 3.4 percent of Connecticut internet users have the choice of using 1-gigabit broadband, currently the fastest-speed commercially available in the state. Those companies that are able to opt for that service are frequently paying $10,000, or more, for access. The addition of broadband service would provide faster internet speed, consumer options and, presumably, lower prices for the consumer.

Last spring, Bhattacharjee presented his research titled, “Economic Impact of Gig Networks,” at the conference “Moving Towards A Gigabit State: Planning and Financing Municipal Ultra-High-Speed Internet Fiber Networks Through Public-Private Partnerships,” at Yale University in New Haven, which drew 200 government officials interested in learning more about the technology.

“We don’t know all the implications this massive, ultra-fast broadband will bring about,” Bhattacharjee said. “Before the internet, before the smartphone, we couldn’t imagine all the things we could do with it. We may not be able to dream up all the applications that this may ultimately spawn.”