Broadband and Second Order Benefits

In a recent post about AT&T's funding of astroturf groups to promote its agenda, I took aim at the Internet Innovation Alliance, which has long promoted AT&T goals around the country.

Despite this criticism of them, they have produced a very good infographic (included below) that discusses the relationship between broadband and jobs. I would like to draw your attention to number 5 below in particular.

“10

#6 is a great explanation of why communities should directly invest in broadband. Local economic growth and secondary investment enabled by broadband expansion is 10 times the initial investment.

Think about that. While private companies have long built, owned, and operated most of the broadband networks, they have seriously underinvested. They underinvest because they cannot monetize many of the benefits from broadband. Faster, more reliable connections simply do not translate into more revenue for cable and telephone companies. So the big incumbents have largely ceased investing in next-generation networks.

These massive corporations do not care about the growth of secondary investments or other spillover effects from better broadband in communities because it does not change their bottom line -- the one thing they are supposed to prioritize over all other matters.

This is why communities should be investing in themselves. Communities do care about secondary investments and spillover benefits from broadband. In fact, they are specifically tasked with investing to benefit the community!

So when it comes to maximizing the benefits of broadband, community investments tend to make a lot of sense... and other secondary benefits.