Broadband stimulus: Not so fast

There is much talk about subsidies for high-speed broadband, but other causes are more deservingIn his first radio address as president, Barack Obama spoke of “expanding broadband to millions of Americans”. Britain’s prime minister, Gordon Brown, has likened his government’s efforts to extend the country’s digital infrastructure to “the roads and the bridges and the railways that were built in previous times” to stimulate the economy. Investing in broadband access sounds like a good way for governments to boost flagging economies. Digging up roads and laying all that optical fibre will create jobs; equipment-makers will have to crank out lots of new gear; and people for whom online commerce or remote working are today out of reach will be brought into the digital fold. One study suggests that increasing broadband penetration in a typical American state by a percentage point raises employment by 0.2-0.3% a year. The idea that governments should be pouring money into broadband seems so self-evident that operators and equipment-makers have been rubbing their hands with glee.To read this report in The Economist in full, see:
www.economist.com/opinion/displaystory.cfm?story_id=13024563