Gauging Broadband's Economic Impacts

Let's hope that Kimberly Weisul is not responsible for writing her own headlines at bnet. Witness a piece from yesterday with the screaming headline: "Study: $7B Stimulus Funds Not Helping Economy".

First let's unpack the premise:

By rolling out broadband internet service, especially to isolated rural areas, the argument goes, we can combat the economic malaise that has plagued many of those areas. Instead, it seems that the benefits of widespread Internet use tend to be concentrated in areas that are already doing relatively well. It’s the techie’s version of “The rich get richer.”

Okay, for what it's worth, if the rich are getting richer, then, strictly speaking we can't claim that the broadband stimulus is having no impact. But that's a minor point.

A tidbit of evidence cited in the piece, however, shows that only a minority of counties have experienced wage and employment growth in the wake of broadband expansion. But the data that substantiate this claim are from 1995-2000. So how on earth can that tentative and dated finding warrant the blithe conclusion that the broadband stimulus (which began almost a decade after the trend identified by a team of researchers) is so far without economic effects. Nonsense.

More importantly, if we pore over large-scale aggregated effects such as wage and employment numbers at the county level we fail to comprehend precisely the localized effects of connectivity. Only a starry-eyed economic development coordinator for a county might hold out hope that a fat pipe will lead directly to large-scale shifts in wage and employment patterns (especially in the long term). And, as the bnet piece suggests, a small and relatively fixed set of locations will benefit the most from connectivity. But that doesn't mean that increasing access and adoption in rural reaches of American isn't without consequence. For instance, perhaps broadband will staunch the steady flow of the best and brightest of rural Americans to the sub- and exurban enclaves to which they presently flock.

But just because a few conurbations stand to benefit the most doesn't in any way lead to the conclusion that broadband expansion is not helping the economy. That's a mischaracterization at best (and more likely ideologically-freighted spin with no toehold in reality).