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March 06, 2013

Broadband: What Matters

By Gary Kim, Contributing Editor

Policy advocates are right to argue that broadband access matters. But “what” matters is likely more than a simple matter of making high speed access widely available and affordable. What really matters is whether people and businesses figure out ways to use broadband in a productive way.

Faster broadband and affordable broadband are important, most would agree. The issue is why faster broadband brings benefits, what the benefits are, and how they can be realized. “The other half of the story is usage, the extent to which people are active with digital technologies and applications, incorporate them into their lives and work, and gain benefit from them,” Booz & Co. analysts have said.

In other words, how broadband changes life and work is the issue, not simply the fact that broadband is available.  

That is not to say studies do not show a correlation. Some studies of broadband deployment have estimated that a 10 percent increase in broadband penetration (adoption by people) contributes a per capita GDP gain of just 0.16 percent to 0.25 percent. 

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The Booz & Company Digitization Index, which measured both the direct and indirect economic impacts of “digitization,” found that an increase in the “Digitization Index” score of 10 percent correlates with a 0.50 percent to 0.62 percent gain in per capita gross domestic product. 

Note that the phrase is “correlation,” not “causation.” Booz does not actually claim that broadband "causes" economic growth, only that growth and broadband are correlated. But that could mean growth "causes" broadband adoption, as much as broadband is seen to "cause" growth.

But that is largely beside the point. The consensus is virtually unanimous that broadband is an “essential” sort of infrastructure, without which an economy cannot grow as fast. Whether the relationship is causal or only co- relational cannot fundamentally be ascertained.

But it doesn’t really matter. People act as though broadband does matter, and people will act on that belief. What probably matters is the way the “acting” takes place.

If people use broadband to watch TV, that’s a rather trivial reason to invest too much in broadband access, especially when there are other compelling places to invest capital. Also, the history of technology innovations suggests it can take quite a long time for people and organizations to learn how to use new technology effectively. 

Fostering broadband access and affordability matters, most would agree. Helping people learn to use broadband is helpful, most would agree. In the end, though, broadband will matter as computing technology has come to matter. 

Over time, broadband potentially changes the way people, organizations and businesses behave. The most important changes of behavior will occur in the ways people learn and work, not in the way they play. But that not only will take time, it is a subtle, lengthy process. Broadband is not a "silver bullet."

Edited by Brooke Neuman
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