2010 Buyers Guide - Broadband Properties

Broadband Is Good…
But International Mileage
May Vary
The Federal Communications Commission (FCC) is looking for a bright
economic line to justify broadband investments. The line is there, but
guidance on the details is lacking.
By Steven S. Ross ■ Broadband Properties
Many nations in widely varying
situations have decided
that broadband is good for the
economy, but predicting the precise benefits
of advanced broadband services is
difficult, said conferees at the Columbia
Institute for Tele-Information (CITI)
Annual State of Telecom Conference in
October.
• Although studies confirm broadband’s
value, the relationship between
enhanced bandwidth and enhanced
benefits is hazy. Raul Katz,
director of business strategy research
at CITI, said, “We do know there is
an [economic] effect that is positive.
We don’t know if there are diminishing
returns for large amounts of
broadband. Economic models tend
to give you an early bump that then
tails off. … We know that when we
move from dial-up to DSL, etc., we
get a bump.”
• Simply passing a household with
available bandwidth does not guarantee
its adoption by individuals and
families.
• Different countries’ approaches to
network regulation and subsidies are
complex and often imperfectly understood
beyond their borders.
• Even when policies are well understood,
other countries cannot replicate
them. Jonathan Liebenau of the
London School of Economics said,
High-powered opening panel. Left to right: Scott Wallsten, FCC; Matthias Kurth, German Federal
Network Agency; Derek Wyatt, Member of Parliament, U.K.; Bernard Benhamou, French Ministerial
Delegate on Internet Usage; Andrew J. Haire, Singapore IDA; Patrik Sandgren, Sweden’s Post and
Telecom Agency; Cezar Alvarez, Brazil’s Head of Cabinet.
“We tried to replicate the U.S. findings
in the U.K. It doesn’t work and
it was naive to think it would work.
Important details differ on [economic]
multipliers. Also, the traderelated
leakage [funds that end up in
other countries to buy equipment,
for instance] is quite different. Thus
the U.K. gets less effect than does the
U.S. Good productivity can replace
work and create unemployment [for
example, in the tourism industry and
in IT]. The positive effect is greatest
in operating but less-than-mature
networks.”
• Residential broadband does not
increase productivity very much,
Leonard Waverman, dean of the
About the Author
Steve Ross is corporate editor of BBP LLC. You can reach him at steve@broad
bandproperties.com.
54 | BROADBAND PROPERTIES | www.broadbandproperties.com | November/December 2009