October 21st, 2020

Broadband investment makes sense

By Mabell, Dave on December 2, 2019.

Dave Mabell

Lethbridge Herald


Spend $1 and you’d get nearly $3.25 back.

That’s one of the reasons Alberta should extend high-speed broadband connections to every part of the province.

But Albertans would also enjoy better health services, education, “social savings” and consumer benefits, a new study predicts. Farm income and business revenue would also grow.

Those are among the findings after a year-long study involving the University of Lethbridge, SouthGrow Regional Economic Development and rural municipalities across southern Alberta.

“The message here is that it’s time to make these investments and get Alberta caught up to other parts of the world that are leaving us behind,” says Coutts Mayor Jim Willett, chair of the SouthGrow organization.

“Other provinces should take note as well,” he says, because “connected communities” make for a strong country.

“It’s time to finish bridging the digital divide.”

Asked to calculate the economic benefits of bringing broadband service to every home in Alberta, researchers found a “very conservative” return of at least 300 per cent return on investment. And that was based on the highest-cost initiatives.

“SouthGrow has been helping communities in southern Alberta get broadband infrastructure for almost a decade,” points out Peter Casurella, SouthGrow’s executive director.

“There’s still a big divide between those who have fast connections and those who don’t,” he says.

“Those who don’t are not competitive today.”

SouthGrow wanted to understand what the payback was from investing in broadband, he says, so it could help business leaders, communities and senior governments justify the expense. When the organization hired a researcher, he reports, it found there was no data on the situation in Alberta.

“There was a clear gap in the public conversation,” says Willett.

“We figured that if we were going to be doing this vital research for our southern communities, it only made sense to go ahead and include information that benefited the whole province.”

With support from Alberta’s ministries of economic development, trade and tourism, U of L economist Kien Tran was invited to undertake the study.

“This study was a unique challenge because of the complexity of the broadband industry and the speed at which it is developing,” Tran says.

“We decided to establish the minimum return on investment by looking at the most expensive hypothetical models and using them as test cases under the assumption that every real-world project would have an even higher return on investment.”

Researchers were “very conservative” in their estimates, he points out.

“So I can confidently say that the numbers for broadband look very good.”

Their study looked at various ways of linking every Albertan to broadband.

Building a new fibre-optic network to every community in Alberta, with fibre running to each home, was projected to create a return of 2.97 to one. But by extending the existing Alberta SuperNet to all remaining communities, there would be a 3.23-to-one return on investment.

Co-researcher Jeff Davidson emphasizes, “These are deliberately conservative numbers based only on what we know about the payback today.”

But as with other major infrastructure investments like railways, highways and telephones, he says the economic benefits grow over time as more ways of leveraging them are found.

While outlining the impact this kind of communications investment would make, SouthGrow says it’s not advocating either of the hypothetical projects.

Instead, “The key takeaway is that broadband is a very good investment, and that conclusion applies to everyone from businesses to governments of all levels.”

In addition to funding from the provincial government, SouthGrow received support from Blood Tribe Economic Development, the counties of Lethbridge, Cardston and Vulcan, the MD of Taber and Taylor Warwick Consulting Ltd.

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