When lagging is really leading

Last fall, we released a report called “Lagging or Leading” to take a fresh look at the state of broadband infrastructure in Canada [pdf, 1.0 MB]. It is a sizable piece, that assesses a number of comparative international studies and identifies many of the problems associated with comparing apples and oranges.

In Saturday’s Globe and Mail, there was an essay that seems to validate many of the messages of our report last fall. The piece was authored by noted economist, Leonard Waverman, dean of the Haskayne School of Business at the University of Calgary. Professor Waverman does research on the growth and productivity impacts of the rollout of telecommunications and computers. He is also lead author of The Connectivity Scorecard, [we wrote about it here] which ranks countries according to a new definition of how telecom infrastructure, ‘smart’ usage and complementary skills and capital drive economic growth and productivity. The co-author of the essay was Scorecard collaborator Kalyan Dasgupta, of the London office of global expert consultancy LECG.

The essay is important reading. It observes that

Economists with extensive practical experience of telecommunications regulation have already rebutted the Berkman Center report that harshly assessed Canadian broadband performance

Still, the essay takes time to highlight difficulties with attempts to transplant measures from other countries.

The “lines per 100 persons” measure is misleading and less conceptually solid than measures based on household and business adoption rates. Indeed, both business and household adoption rates should be measured separately and in different ways.

As the essay observes, “broadband cognoscenti often look upon European regulation with admiring eyes.” Perhaps that is why they are willing to allow ideology to cloud their analysis of data.

International comparisons almost always suffer from limited data and limited comparability, particularly comparisons of prices and speeds. This is why great humility and caution are required in drawing policy conclusions from such comparative data. Regulation curtails economic freedom, which is why a very high standard of evidence is required to justify regulation.

On Tuesday June 8, Dr. Waverman will be participating on a panel at The 2010 Canadian Telecom Summit looking at International Perspectives on ICT Strategies. These issues are especially important given the plans by government to develop a national digital strategy.

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