Forbes blogger on rural broadband: ‘Don’t bother’

“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:

- generate new business in  rural areas

- support better rural health care, or

- improve educational opportunities and ultimately improve career opportunities for people in rural areas

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.

7 Responses to “Forbes blogger on rural broadband: ‘Don’t bother’”

  1. Ken Pyle says:

    Good points, Joan.

    Another point, that I don\’t think is made often enough, is national security. The rural areas areas are going to be a last bastion of defense in a time of major crisis. Having data centers in remote areas and being able to connect them with fiber is extremely important to a robust, physically redundant infrastructure. There is also a need for communications to support Federal efforts to secure the border. Again, many of the independent carriers are the ones providing those links.

  2. John A. Ward says:

    I have noticed no particular increase in productivity (other than waiting for operating system downloads) whether DSL or Cable is used. It seems as though the study is looking at those 2 options, vs. dial-up vs DSL/CABLE. When faced with dial up compared to either cable or dsl there is absolutely a difference in productivity, I have customers with both and the dial up only customers take quadruple the time BUT cable vs dsl is a push. The medium needs to be good enough for the job being done, any better isn\’t useful.

  3. Tommie Dodd says:

    As a service provider, my Business clients want and need to higher speed due in part to the fact they have more users on their networks. If higher speed were not available, their networks would crawl and nothing substantive would be accomplished.

    Connected planet has it right.

  4. Annon says:

    The broadband stimulus program was a huge waste (chalk another one up for Obamanomics) and the IOCs know it. Rural America deserves and needs parity for BB and telephony and RUS was doing that just fine. The jobs requirements in the stimulus is totally unobtainable and many IOCs refused to submit for it as a result. Those that took $10s of millions of dollars from spending crazy Obama administration under the auspice of increasing \"jobs\", should be ashamed of themselves. Just as the other non-rural broadband slurpers of Obama\’s stimulus program should be ashamed with themselves. Tell me, how many long term jobs did you really create with all that money?

  5. Big G says:

    If it takes the government out of rural Telcos one step then it is one step in the right direction. Even if I dont agree on the premise I will swallow my pride of objection to get inefficient government out of the way of real progress.

  6. Marc Matthews says:

    Following his argument, maybe we should stop building/maintaining roads in rural areas… What a city-slicker

  7. Andrew says:

    It really is about roads–digital roads. Many rural communities will not survive without improved access to affordable, high performance broadband infrastructure. The Forbes article fails utterly to differentiate between what we call \"little broadband,\" meaning DSL, cable modem, and wireless, and \"big broadband,\" which is fiber to customer, starting at 100 megabit capacity and now moving quickly to Gigabit.

    The incumbents use a circular argument to \"prove\" rural areas don\’t need big broadband by claiming that they don\’t see any of their customers using it, but how can you use it if you don\’t have it. For the past eighteen years, anytime broadband capacity has been increased, customers find new ways to use it that pushes the limits of that technology. AT&T recently indicated that their smartphone customers use as much as 1000x more bandwidth than \"dumb\" cellphone customers, and nationally, cell tower saturation is above 70%. When that number hits 80%, the network is at full capacity because of demand spikes.

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