Could A National Broadband Policy Boost The Economy By Over $100 Billion?

from the debate-away dept

There’s been some controversy surrounding the group Connected Nation, as some have accused it of basically being a front group for AT&T — though the evidence on that front still seems a bit weak. Whether or not you believe them, the group has now released a report claiming that a more comprehensive national broadband policy would boost the economy by $134 billion. These types of studies are always a little questionable, as it’s common for the entities putting them together (who are obviously biased) to pick and choose how they count the economic impact of certain actions, playing up things that help their case and ignoring those that hurt their case. However, there is some additional evidence out there that better broadband coverage does improve the economy. In the past, we’ve pointed to a variety of municipal broadband efforts that boosted local economies in very noticeable ways. Of course, the critics of Connected Nation will quickly point out that Connected Nation’s plans for a broadband plan could actually serve to hurt those municipal providers.

At this point, I’m still rather agnostic on the issue. I agree that better broadband can help the economy, but I’m not convinced that anyone has really come up with a plan that provides that type of benefit to the entire country in a way that doesn’t have dangerous unintended consequences. In some ways, it’s similar to the debate over whether you want competition at the platform level or above it, as that would influence the decisions on how to encourage broadband. If you think it’s better to focus on competition above the platform, rather than between platforms, then a national broadband policy makes sense (in fact, you could think of it more like the highway system). If you think it’s better to have competition between platforms themselves, then a national broadband policy might not make sense. There are compelling arguments on both sides, so maybe we can hash out some thoughts in the comments.

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Comments on “Could A National Broadband Policy Boost The Economy By Over $100 Billion?”

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matt says:

its a simple premise

The basic idea is very simple, and I agree that better broadband will help the economy, but…

Mike, what forseeable unintended consequences do you see from increased broadband itself? I agree a policy would be horribly written, and I don’t doubt that side. I pray we don’t see a policy other than forcibly taking away the franchise agreements from states and municipalities. But looking beyond policies do you see any potential side affects of increased broadband quality/penetration/speed/etc? I wonder if people have thought of that issue and what responses the ISP’s would be expected to take (obviously they aren’t going to pass those savings on to the customer).

Dean Landolt (profile) says:

I’m still a little apprehensive accepting that a national broadband policy is within the purview of the Feds, but propping it up against the Interstate system analogy certainly helps. In spite of the disaster it is in my neck of the woods (D.C.), it’s certainly been a boon (for everyone but the railroads, of course). I fear we live in different times though — imagine what the highways would look like if Eisenhower let the railroad tycoons plan the routes and you have a pretty good idea of why I’m apprehensive.

That said, I’ll acknowledge it’s a natural monopoly, and something must be done. Why can’t we just run fiber in parallel to our electrical grid and be done with it? I know, I know — it would kill wired platform competition, but so be it — there’s still plenty to fight over in wireless.

@Danno: I believe so — and I think locking in the wrong platform (i.e. nationwide 802.11) would be another terrible unintended consequence of having legislators and lobbyists write this kind of policy.

@matt: too much broadband will be a problem to anyone in the business of charging for the delivery of information products. Everybody, and I mean *everybody* will benefit (including the aforementioned, as they will be dragged, kicking and screaming if need be, into a more productive business model).

KD says:

The only policy should be to increase service comp

Don’t try to specify any implementation details — just eliminate those regulations that get in the way of new companies offering internet service. Watch carefully for any anti-competitive behaviour on the part of the current duopoly and stamp it out immediately. If necessary, provide some assistance for backbone carriers if it seems that they can’t invest quickly enough in adding backbone capacity (probably won’t be necessary, but might be). I’d prefer to include a requirement that the providers of transport services be completely separated from the providers of application services (TV, phone), but getting the rest set up will be hard enough that we might have to tolerate not getting this part.

This probably will result in underserving of rural areas. Accept that for the short term, but once a healthy, multiple-provider, very competitive ISP market is running, add something to push service out to rural areas — possibly by public ventures subsidized by light taxes on the thriving ISPs, possibly by mandating extension of service by the transport providers to the outlying areas.

This would not be easy, but it would be doable if we could keep the big money of the telcos and cablecos from corrupting the system. Fat chance of that.

Justin Hollabaugh (profile) says:


I’m one of those weird and wacky Ron Paul-ites and as you might expect, I’m not wild on the idea of MORE government.

I have however always felt that government is at it’s best (least evil) when developing infrastructure. They built the highway system as public infrastructure that would allow our military to move freely and easily within our country (I guess it’s too bad that so much of our military isn’t even IN our country at any given point in time).

They’ve been able to keep up with changes in road design (probably even fostered some).

I think it’s high time we had a national IT department… and I think that one long term goal of that department would be a nationally pervasive, neutral, IPv6 broadband network. I think we should invest in hybridized wireless mesh/long range (satellite?) wireless in the hopes that we can create a globally pervasive, IPv6, neutral network. I think all software paid for with taxpayer money should be GPLed and released. I think the designs for hardware with which to access to this globally pervasive, neutral wireless network should also be released under similar public license.

The GPS system is an example of a globally pervasive infrastructure designed for military use and opened to the public. It is not a perfect model as I have already listed a number of requirements that the GPS system does not meet… but it is a model and a precedent.

Why government infrastructure and not Google? Well, we can elect the government IT members.

One last thing… if we created such a government entity it should be clearly delineated by a kind of Internet Constitution, which, among other things, should preserve at all costs the neutrality of the network.

Of course I’m also a whack-job who believes that we shouldn’t be part of the U.N., but we should still allow states to ratify our constitution and join the Union… and that we should still recognize the right of secession and the sovereignty of the states and most importantly, the sovereignty of the individual.

4-80-sicks says:

Who would have been capable of constructing the highway system, besides the government? Nobody. But the telcos, companies with national or at least very large regional reach, should be perfectly capable of upgrading the infrastructure. As the different railroad companies cooperated to lay track all over the country, so I think the telcos should lay fiber. Unfortunately, they are recalcitrant, bratty giants with tunnel vision, uninterested in such altruistic operations that don’t immediately increase their profits.

But I find myself on the side of competition above the platform level. I’d prefer a standard (like alternating current) rather than different platforms (like game systems). Connectivity should allow anything possible to everybody, rather than forcing entities to choose between different competing platforms. There aren’t different styles of connection, as there are different kinds of games or DVDs. Currently you could choose between cable, DSL, fios, or ISDN, but the end service varies only in degree of speed and number of terminal connections supported. What other differentiating features could there be, without getting into content interference?

I’d say the government should take care of it, but I’m fairly convinced these days that it’s incapable of laying anything but bullshit; and anything they would do could only act as further subsidization for telcos under the current climate.

I think the best possible course is in the government’s hands: they should eliminate everything that allows the current pseudomonopolies to prosper, then deploy a nationwide standard infrastructure.

And who would pay for this? The telcos. Currently, they put money into lobbying to maintain their positions in the market. Instead, they should be required to meet the service standard in a review every year or every few years, at which point they would pay fees to be allowed to continue business.

Unfortunately, this opens the door for the government to enforce unfavorable requirements, such as a lack of network neutrality. Perhaps anti-lobbying legislation is also required. There is also the issue of ensuring expertise rather than grandstanding and emotional appeals. I like Justin Hollabaugh’s idea of electing IT officers, but that does not prevent loudmouths like Ted Stevens or Mary Bono from getting on the committee. Qualifications are needed.

Dave says:

Infrastructure Vs Competition?

This is sounding like an issue of Infrastructure Vs Competition. And Both are needed, I happen to like the EU’s idea of requiring at least 4 providers of high speed access in any given area, weather it is Broadband/DSL/WiMAX/FiOS or other doesn’t matter so much. Though it would be nice to have an option of your preferred method, in any area that you live at. They are all good technologies and depending on how you use your net access, changes what kind of service you would want.

While it is an interesting issue, at this point is difficult to figure out weather the economy as a whole would benefit more from have a choice of providers, myself; I am stuck with comcast as the only source of high speed internet in my area and after reading about there traffic shaping policies , I think having the choice of providers is just as important has having the infrastructures.

A joint venture (JV) between the different providers of broadband, or of DSL may be the best option, since everyone already seems to agree that they have a monopoly on the web anyways it can’t hurt. Once the networks are in place hand them over to the public domain for huge tax brake? Might not work… but at least its an idea, the different telcos and cablecos may need more incentive then a tax brake to let go of a monopoly.

But assuming it did become public domain there becomes the issue of maintenance. I see two possibilities.

A. Taxes to cover the cost of maintenance, just like with the highway system.


B. The various providers pay a fee based on their bandwidth usage, causing them to change for how much bandwidth you use .

So that is my 2 cents worth. 🙂

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