Report highlights wider economic benefits of next generation broadband

Jun 24 2009 by Alex Turner, Liverpool Daily Post

NEXT-GENERATION broadband will have significant wider economic benefits, according to a UK industry-government forum.

The Broadband Stakeholder Group (BSG) published a report, A Framework for Evaluating the Value of Next Generation Broadband, but deliberately avoided giving an estimate of its potential value.

But the report did set out three categories of potential economic benefit.

It said: “The first of these refers to the potential for next- generation broadband to provide a partial virtual substitute for proximity and local network effects – thereby potentially achieving the productivity benefits of cities and other clusters without the need to get more people to live and work in such agglomerations.

“The second reflects the scope for next- generation broadband to expand the scope for trade in services, and therefore to increase the overall level of competition and innovation in the economy.

“While we assume that competition in the telecoms market is maintained during the transition to next generation broadband, achieving this outcome will require focused industry and regulatory effort.

“Third, next-generation broadband might also deepen supply chain linkages and open up new substitution possibilities within the economy, thereby increasing resilience to shocks such as an oil price shock.

“Greater economic flexibility is also likely to expand the feasible set of policy options.”

The report also said a short-term delay in deploying a new network is “unlikely” to be costly.

However, the report’s authors warned “waiting does not imply doing nothing, and there could be significant costs if deployment was delayed in the long-term (5-10 years) and takes place significantly later than in other countries”.