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Broadband Austerity: The Wrong Path at the Wrong Time

May 16, 2013 - 2 Comments

Howard Baldwin - Photograph

By Howard Baldwin, Contributing Columnist

Is broadband deployment progressing or regressing? Does it seem like broadband policy may be taking two steps forward and one step back? Most of the time we’re inundated in encouraging news, both forecasts about its economic potential and grounded-in-reality reports about new deployments, but sometimes it’s hard to tell.

Research firm Gartner has devised an unintentionally humorous curve that it applies to technology like broadband: its hype cycle. It has five data points, starting out like a waveform and then flattening out.

The first point indicates the “technology trigger” – when the technology is created. At the top of waveform is the peak of inflated expectations. At the bottom is the trough of disillusionment. Another upward wave represents the slope of enlightenment, followed by the plateau of productivity.

Based on recent news reports, it’s clear that we’ve passed the peak of inflated expectations, but have we reached the trough of disillusionment yet? Several articles indicate that some regions of the world may have crossed that threshold:

  • Item: The UK Telegraph reported earlier in 2013 that the EU plans to slash broadband funding by 90 per cent.
  • Item: ZDNet noted that a report issued by the Economist Intelligence Unit last year suggested that the benefits of UK super-fast broadband “may have been overstated.”
  • Item: Telecommunications consultant Paul Budde wondered in a blog post last year, after an IEEE conference in Sydney, whether the mobile infrastructure was running out of steam.


Broadband as The Fourth Utility

I don’t agree with these naysayers. First of all, if you think infrastructure is easy, check out Jill Jonnes’ terrific book Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World (2004) about the travails of those entrepreneurs to deploy electricity. Even so, while broadband is frequently referred to as the fourth utility, it’s not like gas, water, and power. That’s why I believe the naysayers are looking at broadband all wrong.

For instance, broadband is the only kind of utility whose technology allows it to be upgraded easily once it’s installed. Expanding pipelines and power stations takes almost the same amount of work (or more) as the original installation.

Similarly, broadband naysayers think of the initial cost but not the incremental benefits. Once fiber is laid, it’s not that difficult to replace it or add more into the conduit as technology improves. With wireless, once the pain of installing the devices is done, technology can be upgraded at the connection points.

Another difference for broadband is its effect on local communities. Gas and electricity provide power for large factories, to be sure, but Internet connectivity provides opportunities for even more economic activities when you add in the entrepreneurs and small business owners who can take advantage of e-commerce and digital businesses. All the other utilities pale by comparison — when it comes to the forward-looking socioeconomic impact of broadband infrastructure investment.

I also believe that as time goes on, we will see fewer broadband forecasts and more reports of actual economic success related to broadband deployments; we’re already beginning to see the latter.

If, as these naysayers suggest, we are in the trough of disillusionment regarding broadband, I’m confident we will soon move up the slope of enlightenment. That is, assuming that the policymakers in your nation have the strategic foresight to resist the urge to cut public funding where it could provide the most long-term benefits. That is, assuming the naysayers stop wringing their hands over the small obstacles and start thinking about the larger benefits. Yes, installing a utility is risky – but rarely has there been a utility where the benefits so outweighed the risks.

To paraphrase Mr. Spock, broadband’s plateau of productivity — that long, flat, line indicating the drama has died down — will live long and make us all prosper.

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  1. Point Topic research has offered some new insight from their latest study, entitled "SuperFast broadband for Europe should cost less" -- check it out Should the EU focus on where the current digital jobs are located, for the most near-term impact, and thereby buildout all the Urban markets for ~€8 billion?

  2. Here's the interesting historical perspective -- if you want to prolong a deep recession, then apparently an Austerity plan is the proven method --