The Impact of Broadband

3:25 PM -- Do economies benefit greatly from a higher penetration of high-speed broadband services? The natural inclination is to believe that the impact would be positive, but what's very difficult to judge is the precise impact such communications services have on the GDP of any country.

That's why it was interesting to see a report -- "Superfast Britain? Myths and realities about the UK's broadband future" -- issued this week by the Economist Intelligence Unit (EIU) that included the following analysis: "While the gains from significantly faster connectivity will indeed be sizeable over time, a good dose of reality is also in order."

A good dose of reality is always welcome, especially in the U.K., where the term "superfast" is used for almost any data communications service more advanced than a carrier pigeon. For its report, the EIU states that anything that delivers greater than 24Mbit/s downstream is considered superfast, whether delivered over a fixed or wireless connection.

Among the key findings of the report are that the shift to superfast broadband will "certainly deliver added growth and new jobs," though likely not to the levels resulting from the shift to basic always-on broadband from dial-up connections. And while some jobs will be created by the construction of new broadband infrastructure in the U.K., the "longer-term, indirect impact on job growth is more difficult to project."

That's not the kind of "cause-effect" analysis that some, especially politicians, would have hoped for.

The analysis and conclusions need to be taken in context, though, so the 22-page report should be read to get the full picture. It's available, for free, to download right here.

For me, though, the key sentences in the report are these:

    Existing networks are capable of delivering many of the services anticipated over the next few years. Obstacles are also numerous to utilising even the existing technology capabilities to good effect, including a shortage of skills and resistance to change. In this context, some of the expectations about the early returns from superfast broadband rollout in the UK may be overstated.
Basically, the report is saying that there's a long way to go before the U.K. can start to realize the benefits of its existing broadband services (fixed and mobile), so there's no point in getting over-excited about fiber-to-the-whatever and 4G.

And that's because having an improved broadband infrastructure alone in itself is not enough to boost any economy. What's often referred to as "joined-up thinking" is required if the benefits are to be exploited.

Where, for example, are the schemes to foster applications innovation? Who is bringing investors and digital startups together? Where are the new education plans that enable schoolchildren to experiment with technology and show their teachers what they're capable of? Teaching children how to use Microsoft Office week after week is a waste of the nation's intellectual capacity.

Unfortunately, the U.K.'s telcos don't appear to be doing much to help at the moment. In fact, Britain's communications service providers should be somewhat ashamed that they're being shown the way by Spanish carrier Telefónica SA (NYSE: TEF). (See Inside Telefonica's Startup Incubator and Telefónica: A New Breed of Telco.)

There's only so much the operators can do, obviously, but every little bit helps and the main thing that's needed is a change of mindset -- engaging with external companies/individuals to figure out what value-added services can be created, and how, is going to be critical for the telcos.

Of course, the EIU report is specific to the U.K. only and so the findings have limited applicability to other countries. But for every country, developing a digital ecosystem, with input from the communications sector, regulators, government, industry, users, investors and more is needed to reap the benefits of broadband. Faster connections alone are not enough.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 5:18:17 PM
re: The Impact of Broadband

Hi Julian

Many thanks for your post. Good to hear that you have the broader picture in mind behind the physical development in Cornwall.

And, of course, where there is a lack of even basic broadband capabilities then the introduction of much faster speeds will be enough lure in itself. And much faster connectivity can be very liberating and change people's lives -- being able to work from home for the past 10+ years because I had access to fast-enough broadband completely changed my life.

BUt once people are 'liberated' by a faster connection to the rest of the digital world, what can be done to help them make the most of it? And how can the service providers create and then offer meaningful services that will benefit them, the users and the community in which their customers live/work/trade?

Is anyone enabling you to share your experience in Cornwall with other regions? What might you learn from other broadband projects in the U.K.? What impact will the Cornish rollout have on education and the attractiveness of Cornwall as a plce to set up a new business (in league with lcoal tax breaks perhaps)?

The impact of faster broadband connectivity could be dramatic for any community, but communities need help to make the most of the opportunities. Where is the U.K.'s Digital Taskforce? Based on what I witnessed at the launch of this report on Tuesday in central London there appears to be a general air of "job done" from some 'influencers' just because BT is pushing fiber closer to the customer and EE has launched a patchy 4G service -- only a fraction of what needs to be done has been achieved. Politicians mouthing off about how Britain is already a global digital leader (I kid you not...) gets us nowhere.

OK, rant over. Good luck in Cornwall -- I'd be interested to know if you're being left to get on with things in isolation or if there is any 'joined-up thinking' going on behind the scenes.  


juliancowans 12/5/2012 | 5:18:17 PM
re: The Impact of Broadband

Interesting article, still need to read the EIU report though. At Superfast Cornwall, we are rolling out superfast broadband across more than 200,000 premises in the rural southwest of England. The programe is a partnership project between the EU, BT and Cornwall Council.

Although the infrastructure is the expensive bit, we see this as an integrated programe to deliver socio-economic and envoronmental benefits to over half a million people. To help deliver this we have a number of complementary workstreams, covering activities such as marketing / demand stimulation, research and innovation, business support, digital inclusion, environmental sustainability, evaluation.

More details of these activities at www.superfastcornwall.org ... In recognition of this, we were recently proud recipients of the Changing Lives Broadband Infovision Award at the World Broadband Forum!

Also in terms of benefits / take up, often it is the really simple reasons that businesses and people connect to superfast, and not just cutting edge apps. For a  small rural business with 5-10 people sharing a poor ADSL connection it's a no brainer - instant productivity benefits will be gained even before changing the way they operate by using things like cloud systems, flexible working and video comms.

paolo.franzoi 12/5/2012 | 5:18:16 PM
re: The Impact of Broadband




I have posted about this stuff here on and off and wanted to ask some questions/leave some comments for discussion.

First off, it seems to me that a business nowadays can do the vast bulk of its high speed activity off a local access port.  With a combination of on-premise networks and stuff in data centers or virtualized (like through AWS) any business can have high bandwidth connectivity.  About the only concern would be connectivity of the premise itself to the data centers.  Done properly, this could be alleviated.  Most "cloud apps" like Salesforce are designed to run web connections over moderate speed (read 3G wireless) connections so it is unclear that much more than that is required.

As for residential, there are only some video applications that require very high speed.  The vast bulk of those today are in entertainment.  Even for things like video chat via Skype or Facetime that residential networks often have enough bandwidth.  So, it really boils down to what apps could require such connectivity.

I see potentially a few opportunities in telecommuting-like service like Telemedicine.  There is (over generations) potentially work in things like Education (do we really need to travel to a college to attend lectures?).  I think societal norms more than lack of networks slows this and probably will change over time.  My sister is an answer line nurse who telecommutes her job (basically phone based triage and answers to health questions).  She requires a moderate speed connection most of the time but travels to give training regularly.  Perhaps training is another education app for high speed broadband.  But again, I think generational and societal norms will impact this more than anything else.


PS - To give you an example of what I mean by norms...do you think there will be a large screen TV market 25 years from now or will everybody just have their own tablet.  As an older person, I can not imagine NOT having a TV but somebody who is 15?


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