Hartford Business Journal

8 Hartford Business Journal • July 16, 2018 • www.HartfordBusiness.com Reporter's Notebook Matt Pilon | mpilon@HartfordBusiness.com Health Care/Bioscience, Startups & Entrepreneurs, Government/Law and Energy TECHNOLOGY Study: Faster internet not a boon to all of CT G overnment officials in a number of Connecticut cities and towns have long wanted to broaden access to faster in- ternet speeds to spur economic develop- ment and make their local communities more attractive places to live and work. But exactly how much would it improve a town's economy to invest millions of dollars to build a munici- pal fiber network that allows for ultra-fast, gigabit- speed internet? For many local of- ficials, the answer could amount to mere guesswork. While prior re- search has found a link between access to broadband internet and em- ployment growth, it has largely focused on national or statewide data, rather than an individual municipality's stats. New academic research, however, may provide the best insights yet for curious Connecticut officials. Published in the March issue of the Telematics and Informatics journal, the report— penned by a team of UConn business school researchers — offers a statistical model the authors say confirms that faster internet improves economies, but interest- ingly, the benefits would not be evenly spread in Connecticut. Municipalities projected to see the greatest gains would be those of medium size, close to big cities, with younger, better-educated populations and higher median incomes. Certain communities with room for economic improvement would also see bigger gains, according to the research. "Just having high-speed broadband internet is not enough," said Sudip Bhattacharjee, a UConn business pro- fessor who co-authored the paper. Bhattacharjee said he hopes local of- ficials will use the model to assess the potential economic payback of broad- band investments. The fact that benefits can differ from town to town make it all the more important to make calculations before investing in greater bandwidth, the paper says. Analyzing 62 Connecticut commu- nities, the researchers' model projects that West Hartford would see the greatest economic gains from higher speeds, followed by East Hartford. The team spent more than three years gathering and crunching 2008- 2013 economic, demographic and internet data, which informed their projections of how higher speeds could benefit median income, annual housing permits, employment and tax revenue. They scored the gains for each com- munity using a comparable index. They also evaluated two different internet- speed tiers, which revealed that certain towns would see varying movement in their rankings, depending on the type of service offered. The researchers opted to list only the top 10 Connecticut communities projected to see the greatest gains, but a map (see above) gives a sense of which parts of the state would fare better. One surprising finding, Bhattacha- rjee said, was that some smaller towns would actually see a net economic loss from higher speeds, when ranked against other communities. Those towns generally have older residents and are more remote. "This highlights that physical con- nectivity, resident age, and geography are integral parts of development to take advantage of increased broad- band speeds," the paper says. GOVERNMENT State-run retirement plan eyes Jan. launch There's much to accomplish in the coming months, but overseers of a state- created retirement plan for private-sec- tor employees hope to begin enrolling at least some Connecticut workers by Janu- ary, a year later than originally hoped. The Connecticut Retirement Secu- rity Authority (RSA) has been meeting for nearly a year and ultimately aims to raise $1 billion in assets by enroll- ing an estimated 600,000 Connecticut residents who don't have access to an employer-sponsored retirement plan. The state plan aims to aggregate a large number of participants to become an attractive prospect for plan providers and leverage better pricing. There are plenty of challenges to get there. First, employees would be able to opt out. In addition, the minimum pay- roll deduction would be 3 percent instead of an originally envisioned 6 percent. Finally, negotiations between lawmakers resulted in the program being limited solely to Roth IRA accounts. Many of the targeted enrollees likely earn low or modest incomes, and Roth IRAs, since they accept post-tax deposits, allow penalty-free withdrawals of principal at any time. All of that could present headwinds for reaching the program's targets. "[2019] is bearing down on us pretty quickly," said RSA board member and State Comptroller Kevin Lembo, who was one of the fiercest advocates for creating the Retirement Security Authority, convinced that a greater urgency on retirement savings was needed and that private-sector fi- nancial providers were failing a large segment of the population. Two of the big- gest tasks ahead include hiring an executive direc- tor and selecting financial services vendors. RSA Chairman Scott Jackson, the former labor commissioner who was recently named tax commissioner, said that the board identified an executive direc- tor finalist in May, but negotiations remain ongoing. Delays have been a common theme for the RSA, which narrowly won legislative approval in 2016 after being assailed by business advocates. It was supposed to begin work in early 2017, but Gov. Dannel P. Malloy waited until about August to ap- point Jackson as chairman. In the interim, a worrisome federal labor rule change last March threat- ened to throw a wrench in the works of state-sponsored retirement plans, potentially forcing plans to comply with more onerous federal rules. But after consulting with an attor- ney, the RSA isn't as concerned about the federal rule change as it once was, Jackson said. Meantime, both Jackson and Lembo take a measured view of their pace of progress thus far. "I think most of us who spent time in the planning or analysis of ... these programs ... understood the complexity of them, so I don't think there are any surprises there," Lembo said. "Starting up a program like this is a big deal. It's complicated and there are lots of layers of law you have to be aware of." This map projects the economic impact on Connecticut communities of investing in faster internet service. The darker green represents communities that would benefit the most economically from high-speed internet; municipalities in red would benefit the least. Sudip Bhattacharjee, Business Professor, UConn Economic impact of high-speed internet service GRAPHIC | TELEMATICS AND INFORMATICS 35 (2018) 1408–1420 State Comptroller Kevin Lembo Scott Jackson, Chairman, Retirement Security Authority

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