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broadband’s ‘Fiber Divide’ Costs Homeowners, Perpetuates Inequality
WASHINGTON – In an era where a reliable internet connection is as vital as running water, the lack of affordable and high-speed options is widening the broadband divide, exacerbating economic disparities and impacting home values across the United States. This digital chasm separates those who can meaningfully connect online from those left struggling in the digital shadows. A recent study highlights how the type of connection available—specifically fiber-optic internet—is becoming a critical factor in determining property values and long-term wealth accumulation.
Economically, the broadband gap stifles growth in underserved areas by limiting access too online education, remote work, telemedicine and e-commerce. It hinders the development of a skilled workforce and prevents businesses from fully participating in the digital economy. Socially, it exacerbates existing inequalities, isolating communities from vital information, civic engagement and social connections, perpetuating a cycle of disadvantage.
“The economic and social consequences of being digitally invisible are real,” said Nicol Turner Lee, senior fellow and director of the Center for Technology Innovation at the Brookings Institution.
Fiber: The Gold Standard
Fiber-optic technology offers considerably faster speeds than older DSL or cable connections. It also provides greater reliability and all-weather access compared to satellite and fixed-wireless solutions. This makes it the undisputed “gold standard” for internet connectivity, crucial for data-intensive activities like streaming, video conferencing, and online gaming.
Fiber-connected neighborhoods are experiencing significant gratitude in property values, while already marginalized communities are left further behind. A study by the fiber Broadband Association and The Brattle Group shows homes with a fiber connection have an average “14% increase in home value” compared with homes without fiber. This premium reflects the growing demand for high-speed internet in today’s digital landscape.
Homeownership has long been a widely accepted and successful strategy for wealth-building and financial security. When a home’s value increases, whether from general market appreciation or upgrades such as a fiber connection, home equity growth accelerates, in turn, increasing overall net worth. The higher a property’s value, the bigger the profit when selling it.
Though, the broadband divide is putting that strategy at risk for some Americans. According to the Federal Communications Commission, “onyl 46% of US households have access to fiber broadband,” with low-income and rural communities disproportionately affected by the lack of internet service provider options.
Why Fiber Matters
Fiber-optic internet uses light to transmit data through glass fibers, offering far greater speed and bandwidth than conventional coaxial copper wires or latency-ridden satellite technology. It’s superior bandwidth is essential to handle the country’s increasing demand for higher speeds and more data.
“With fiber,once it’s in the ground,you’re not going to have to dig it back up 50 or even 100 years from now,” said Brian Whitacre,a professor at Oklahoma State University who specializes in rural economic development. “It’s kind of future-proof from that standpoint,” he said, emphasizing the long-term value of investing in a property with fiber.
how Fiber Impacts Home Values
“Having a fiber connection could be likened to having a pool or another amenity that improves your quality of life,” Turner Lee said.
“As the internet becomes much more transformative and embedded in probably everything that we do, having access to technology is definitely an incentive for any person who wants to not only live, but thrive in this new digital ecosystem,” Turner Lee said.
A Brookings Institution study shows markets with access to fiber internet also tend to have higher income levels, greater diversity in job opportunities, better educational outcomes, larger populations and increased potential for future business and infrastructure development.
“The extent to which economic opportunities are available for people, of course, makes a difference in whether or not that neighborhood is going to be enticing for people,” Turner Lee said.
Wealth Accumulation and the Fiber Advantage
Homes equipped with fiber see bigger home equity returns. Factoring in the average value-add of fiber — around 14%, according to the Benton Group — a home with fiber would be worth roughly $40,000 more than one without after just 10 years (using an annual appreciation rate of 3%).
The Fiber Divide: Who’s Left Behind
Fiber deployment is often deterred by high costs, particularly in rural areas where population density is low. Internet companies find investment in densely populated cities significantly more worthwhile.
“There’s a huge competition component here,” said Chao Jun Liu, senior legislative associate at the Electronic Frontier Foundation. “In those rural areas, in those low-income communities, there’s no one to compete against, so the providers can get away with it.”
Even when fiber is available, affordability remains a significant barrier. “A lot of people have fiber available to them, but they can’t afford to pay, you know, $50, $80, $100 a month for a regular connection,” Whitacre said.
The Monopolies
Even urban areas often face limited internet options, with many households having access to only one provider. Of the 46% of households eligible for fiber internet, less than 3% have access to more than one provider. ISPs have little incentive to offer competitive pricing or improve service quality if they operate like a virtual monopoly.
Unequal Access,Unequal Possibility
“We need to continue to close the broadband divide so that we’re not disservicing people without access or foreclosing on opportunities that they could actually benefit from,” said Turner Lee.
What Homebuyers Should Consider
Research available ISPs: verify service availability,speed options,data caps,and contracts.
Check the home’s network setup: Look for Ethernet ports and Wi-Fi coverage.* Think long-term: Consider future needs and the potential impact on resale value. Homes with good internet, especially fiber, are valued higher than those without.
While real estate can be a valuable asset, it’s essential to recognize that wealth can be built through other avenues such as consistently contributing to a retirement account, investing in the stock market through diversified funds and saving your money in high-yield accounts, especially when done in tandem.
While systemic change at the government level is crucial,there are ways you can help bridge the gap. One is through informed voting. Support representatives who prioritize broadband expansion, especially in underserved areas, and regulations that aim to make internet access more affordable.Another option is to volunteer your time to teach digital skills in your community.
Counterargument:
Some argue that focusing solely on fiber is unrealistic,given the cost and logistical challenges of deploying it nationwide.They propose that choice technologies, such as 5G fixed wireless, can provide adequate speeds at a lower cost in certain areas. While 5G may offer improved speeds over older technologies, it doesn’t offer the same reliability, bandwidth, or long-term scalability as fiber. Also, in rural areas, building out and maintaining these technologies might potentially be challenging, or at least be perceived that way by potential service providers. A diversified approach, including a mix of technologies, may be necessary, but fiber should remain the primary goal for ensuring equitable access to high-speed internet. The focus must always be providing the best opportunity for those currently disenfranchised.
FAQ
Q: What is the broadband divide?
A: the broadband divide refers to the gap between those who have access to affordable,high-speed internet and those who do not,often due to geographic location,income,or other socioeconomic factors.
Q: How does fiber internet affect home values?
A: Studies suggest that homes with fiber internet can have a significantly higher value compared to those without, averaging around a 14% increase, as it adds significant value from the perspective of potential buyers.
Q: What can be done to close the broadband divide?
A: Solutions include government investment in broadband infrastructure, policies to promote competition among internet service providers, and programs to help low-income households afford internet service.
Q: What is the Affordable Connectivity program (ACP)?
A: the ACP is a federal program that provides eligible low
