There's the usual cacophony of subsidy junkies clamouring that we should go build a huge system of fast broadband that will reach every hovel in the land, no matter how rural.
This is true in the UK, where there have been various proposals to tax every phone line so as to subsidise the roll out. This is also true in the US: more often on spurious grounds of "national competitiveness" than anything else.
The questions is, as with the building of any other form of infrastructure, is cabling the nation actually worth it? Remember the important point here: 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.
Which, via, brings us to this interesting paper.
The Need for Speed:Impacts of Internet Connectivity on
Firm Productivity
In it, the authors look at the effect on firms' productivity of various forms of internet connectivity. A firms' productivity is a measurement of their using this new technology to either do new things or to do old in better and or cheaper ways of course. The finding is very interesting indeed and might save us taxpayers a lot of money if anyone was prepared to take any notice of it:
Specifically, we examine the productivity impact that arises (ceteris paribus) when a firm: (a) adopts broadband (of any type) relative to no broadband; (b) adopts ‘fast’ broadband (defined here as a cable connection) relative to ‘slow’ broadband (all other broadband types); and (c) adopts slow broadband relative to no broadband. We determine that the productivity benefits that arise from a switch from no broadband to broadband access are material; we do not find evidence for productivity differentiation based on the type of broadband connection (i.e. cable versus other).
Having a broadband connection does make a difference, yes. However, the higher speeds provided by the more expensive infrastructure systems like a cable to every dwelling or office: they do not make a difference. Therefore, the case for public subsidy to provide high speed broadband across the country rather fails.
There's no benefit to be had from it so why bother and why tax everyone to provide something that doesn't improve matters?
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