[CAnet - news] The Effects of Broadband Deployment on Output and Employment

For more information on this item please visit my blog at 
http://billstarnaud.blogspot.com/
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[This seems to be a reasonably well researched paper on the effects of
broadband deployment on output and employment. Many previous studies on this
topic tended to involve a lot of hand waving. I am a big believer in reduced
regulation and that a truly competitive private sector market is the best
solution to accelerate rollout broadband. However I remain skeptical of the
intended purpose of the study when I see that the authors regularly consult
for the big RBOCs and their conclusion is that "new regulatory policies not
reduce investment incentives for these carriers".  Many countries that are
ahead of the US in terms of broadband penetration have concluded that some
variant of structural separation is essential to promote broadband. I am
think private sector led structural separation initiatives, without
necessarily government regulation, is where things will naturally end up.
As an example see
http://www.canarie.ca/canet4/library/customer/Green_Broadband.ppt

 Thanks to Theodore Stout and Ross MacLeod for this pointer -- BSA]

http://www3.brookings.edu/views/papers/crandall/200706litan.pdf


Effects of Broadband Deployment on Output and Employment

The Power of Broadband

A new Brookings Institution study, by researchers Robert Crandall, William
Lehr, and Robert Litan, takes a hard look at the economic effects of
broadband deployment. While most casual observers would suspect that
broadband deployment is a good thing, there are remarkably few empirical
studies that detail its effects on output and employment. This new research
indicates that broadband deployment does indeed have positive economic
impacts. In fact, for every one percent increase in a state's broadband
penetration rates, employment increases at a rate of 0.2 to 0.3 percent per
year. If these figures are aggregated to the national level, we find that
this increase could lead to an additional 300,000 new jobs per year. Based
on these early findings, the researchers recommend that state policymakers
be more aggressive in terms of promoting competition in broadband services.
This competition will help reduce costs, improve services, and further
hasten deployment efforts. 

Access the June 2007 Brookings Institution paper by Robert Crandall, William
Lehr and Robert Litan.



"The finding of the strong link between broadband use and state-level
employment has important policy implications, both on the demand-side and
the supply-side. In particular, these results suggest that all levels of
government should follow policies that encourage broadband competition,
which will lead to lower prices and hence greater use. It should be noted,
however, that increased use will require an expansion of supply,
specifically greater investment by service providers in broadband
infrastructure, which already is facing capacity constraints as new
applications, such as video streaming, become ever more popular. It is
critical, therefore, that new regulatory policies not reduce investment
incentives for these carriers."



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