Tuesday, June 7, 2011

Is Broadband a National Issue?

The United Nations reported this week on a topic that many of us already take for granted: broadband is a catalyst for economic growth. "Broadband telecommunications have the potential to spur rapid economic growth and facilitate job creation" according to the UN's position and official findings. So naturally, they offer some advice -- nay, an imperative -- to developing nations: invest in broadband. The UN's position is that every nation ought to have a Broadband Plan.

Sounds great, right? You want your economy to grow, so give it the infrastructure that it needs. Lay the cables, build the towers, and deliver both terrestrial as well as fixed wireless broadband. But I have a philosophical question. Is broadband a state-supplied utility? Is it a national issue? Is it an imperative that states can act upon as the UN would encourage?

Perhaps it is. I'm no history expert, but I dare say that the first telecommunication networks in the U.S. were government funded, if not even government controlled. Telegraph cables traversed the country along railways and served largely to facilitate state activities such as military. The first commercialization of these services were done via leasing the use of these lines from the government by private companies.

But if developing nations are to use the already-developed nations as a model, I would say that the good old invisible hand (thank you Adam Smith) built the great broadband infrastructures that we see today in Europe and America. Cables were not laid and cell towers built in order to create commerce, but rather they were demanded by those who understood that they could.

So, to challenge the UN's findings that broadband leads to economic development and job creation, let me challenge this: isn't it quite the opposite? Doesn't economic development lead to broadband by virtue of demand. And if so, then one must ask, what really does create economic development?

Labels: Broadband Plan, Economy