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Is Broadband Must-Have Resource for Economic Recovery?

Stephen Alexander|CTO, Senior VP, Products and Technology at Ciena Corporation
Monday, 16 Jul 2012 | 3:51 PM ET

Theglobal economic recovery has been anything but uniform—discriminating in many cases from country to country and more closely to home between states and cities.

Ting Hoo | Taxi | Getty Images

Economists and politicians are working diligently to identify characteristics that are driving this disparity.

One key element that does not get the attention it is due is broadband access.

The Internet has become an important resource with real economic impact: every 10 percent increase in broadband penetration within a country drives a 1.3 percent additional growth in the Gross Domestic Product (GDP), according to a recent UNESCO/ITU Broadband Commission report.

While access to Internet connections has grown dramatically, it has been outpaced by advancement of applications including more rich content, video, voice and other features that demand a high speed connection that require broadband speeds, making broadband access critical.

Broadband Access Impacts Core Uses of the Internet Tied to Economic Benefit

While slow speed connections suffice for basic email or other limited activities some key uses of the Internet—education, health and commerce—are largely dependent on high speed access. Let’s consider the disparity between broadband haves and have-nots.

In education, a student with broadband access can use the Internet to learn about the world from school recommended sources, to participate in online tutoring, and to obtain advanced skills (like coding). Those without broadband access must rely on schools’ limited resources (i.e. the book, or a spot in the class) and have a reduced ability to teach necessary modern skills.

With health care broadband access can support economic growth primarily through reducing costs. Individuals can increase knowledge and make better decisions about choosing to go to the hospital, visit a doctor or choose a treatment type.

This reduction in costs leaves consumers more money to spend in other places, and it helps reduce governments’ contributions to healthcare freeing budget that can be used elsewhere.

Steve Alexander, CTO Ciena
Source: Ciena.com
Steve Alexander, CTO Ciena

Finally, commerce is greatly bolstered through broadband access. Beyond being informed and making decisions before leaving home, those with broadband access can evaluate a much larger group of suppliers to make the most effective decision.

And this is true from the stay-at-home mom buying household goods to large corporations sourcing materials.

Embracing Responsibility and Collaboration Critical to Advancing Broadband Access

The case for greater broadband access is clear, but the process for achieving it is more challenging. To succeed, countries need to support a broadband-for-all business model that engages all key stakeholders, including governments, private enterprises, and the public.

Governments have a particularly essential role in driving broadband throughout their nation. They need to look at their telecommunications policy, eliminate taxation and restrictive or technology biased policies and ensure healthy competition within their national telecommunications infrastructure.

They also need to look at how Internet content is taxed and encouraged and should actively consider investment that drives innovation in Internet-based content.

Private institutions should also be expected to shoulder some of the burden. The current mode of operations where content providers drive massive bandwidth requirements without incurring significant costs and rely on service providers to deliver the infrastructure for this massive bandwidth growth without any significant revenue growth is an untenable business model.

Service providers have and will continue to respond by restricting and/or passing on costs to the general public which places Internet innovation at risk as we sort out who pays and for what and perpetuates the broadband divide based on who can and who can’t pay for it.

Finally, the public needs to become more aware of the benefits of broadband and see the incrementally higher costs of high-speed access as a small investment to make in total savings, much like buying a membership to a bulk retailer.

There are already examples of these three groups coming together to expand broadband access in communities that lag. Recently, government, private enterprise and community came together in Washington to launch The DC Community Access Network (DC-CAN) to bring affordable, value-added broadband services to over 250 health, educational, public safety, and other community anchor institutions in DC.

Acceptance of Broadband Value Is the First Step; Establishing a Plan is the Critical Next Step

In summary, governments need to embrace broadband access as an important economic driver and work with private industry and the public to implement a broadband for all business models.

There are models for success and general acceptance of the importance. Now all constituents need to work together to create a plan and take action to use broadband access as an economic growth driver.

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Stephen Alexander is Chief Technology Officer and Senior Vice President, Products and Technology at Ciena Corporation.

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