A comment on my posting from last Monday points to critiques of some of the job creation figures being thrown around the broadband debate in the US.
A warning bell sounded for me when reading the Reuters article. I had to wonder if we are guilty of creating an unquestioned myth surrounding some of the economic benefits of universal broadband?
It is somewhat reminiscent of the “big lie” on internet growth that helped fuel the dot-com boom. As such, it is a wake-up call to all of us to pause and examine our arguments for increased government broadband investment.
The key question now being raised is the quantum of jobs benefits, which seems to be sourced in a July 2007 article from the Brookings Institute [
pdf, 231KB].
We can all agree that broadband is good; more broadband is better. Building broadband creates positive economic impact – during the construction and once people go on-line. But, we need some critical research rather than blindly extrapolating results produced under specific sets of assumptions. Repeating a lie doesn’t make it true – just more authoritative.
An article entitled “Not So Fast” in the January 29 issue of the Economist says:
When it comes to promoting economic activity, it is easy to see why having broadband is better than not having it, but most benefits are likely to come from wiring people up in the first place rather than making existing connections hum faster. In Japan and South Korea over 40% of households have fibre links capable of blazing speeds, but that does not seem to have resulted in more rapid economic growth, or the emergence of new applications unavailable to consumers with ordinary broadband.
The article notes the potential for market distortions when governments intervene.
Fibre networks are already being built by private companies in many countries; the prospect of handouts might cause them to delay their plans, in the hope that the state will pay for things they were going to do anyway.
It is important to ensure that we have more informed discussion when we’re talking about pouring millions, if not billions of tax dollars into these project.