“High-speed rural broadband: Don’t bother to build it” is the headline for a recent Forbes blog post. In it, a Forbes blogger argues that:
“Infrastructure does not make us rich. People using infrastructure to do new things, or to do old things better or more cheaply might, but the cables, roads, railways and bridges of infrastructure do not, in and of themselves, impart wealth. Of course they don’t, for they are a cost. We do have to pay to build them after all.”
To support his view, the Forbes blogger draws upon a 2009 paper from Motu Economic and Public Policy Research that looked at the impact of higher-speed broadband on businesses in New Zealand. That research found that the productivity benefits resulting from a switch from no broadband to broadband are “material,” but that the switch to cable modem speed broadband from slower speeds does not generate any productivity gains.
Based on this one individual report, the Forbes blogger argues that high-speed rural broadband provides “no benefits” and questions why governments should subsidize high-speed rural broadband construction when it “doesn’t improve matters.”
There are several problems with the Forbes’ bloggers argument:
First, to dismiss the value of rural high-speed broadband on the basis of one single report is extremely short-sighted. Connected Planet has written about several other studies that have reached quite different conclusions. See “Study: full wireless broadband deployment could save or create more than 100,000 jobs” (CP: Study: full wireless broadband deployment could save or create more than 100,000 jobs) and (CP: Broadband payback not just about subscriber revenues)
The Motu survey methodology, which considered only cable modem connectivity to be “high-speed” is also short-sighted. History already has shown that what might be considered “high-speed” today will quickly become average speed connectivity in just a few years.
Finally, the Forbes blogger seems to think that the only way to measure the value of high-speed broadband is by the impact it has on the productivity of existing firms. He doesn’t consider the ability of broadband to:
I’m sure Connected Planet’s rural telco readers could come up with other arguments against the Forbes’ blogger’s line of reasoning and welcome any additional feedback on this topic.