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Economic Incentive for Telecom Infrastructure Investment

By Howard Baldwin, Contributing Columnist

In his recent State of the Union address, President Obama identified government investment in infrastructure as a key antidote to the U.S. economic doldrums. This is not a new concept. During the Great Depression, the Works Progress Administration spent $7 billion over a three year period to construct buildings, roads, parks, and bridges, bringing short-term jobs and long-term competitive advantage.

Nor is it strictly a U.S. strategy. During the recent downturn, multiple countries have started taking the same tack, but instead of dams and highways, they’re funding telecommunications network infrastructure.

According to a 2009 speech by Taylor Reynolds, an economist with the Organization for Economic Cooperation and Development (OECD), the numbers are impressive for countries both large and small:

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