[LINK] Study casts doubt on claims for broadband

[David Boxall]

Another one for the NBN-knockers:
<http://www.smh.com.au/technology/technology-news/study-casts-doubt-on-claims-for-broadband-20101128-18cfg.html>

Study casts doubt on claims for broadband
Peter Martin ECONOMICS CORRESPONDENT
November 29, 2010

THE federal government has been accused of misusing research to build 
the case for the national broadband network in an international study 
that finds the claimed benefits have been ''grossly overstated''.

Released in London before the vote today on legislation paving the way 
for the NBN, the study found that the evidence to support claims made 
for fibre-to-the-home networks was ''surprisingly weak'' and cited 
Australia as a key example.

''All else equal, faster is better,'' noted the study, prepared by the 
British telecommunications consultant Robert Kenny and Charles Kenny 
from the US Centre for Global Development. ''But faster technologies 
don't always triumph; think of passenger hovercraft, maglev trains, and 
supersonic airliners.
Advertisement: Story continues below

''Concorde (if it hadn't retired) would still be the fastest passenger 
aircraft today, having first flown in 1969. It turned out that the 
incremental benefits of speed to most customers were not worth the extra 
cost.''

South Korea, cited as the world leader in providing fibre to homes, 
enjoyed productivity growth of 7.6 per cent per capita per year in the 
decade before it began the program and 3.8 per cent in the decade since.

''Many factors played into the growth slowdown,'' the study says. ''But 
maybe the massive increase in online gaming, facilitated by the 
broadband revolution, played a role.''

In launching Australia's broadband network in 2009, Prime Minister Kevin 
Rudd said 78 per cent of the productivity gains in service businesses 
and 85 per cent in manufacturing flowed from information and 
communications technology.

The study traced this claim back to two papers from Australia's 
Communications Department referring to gains of 59 to 78 per cent and 65 
to 85 per cent.

''What was an upper bound in the research has become a mid-point in 
Rudd's speech,'' it says.

''But more importantly, the research was looking at all technological 
factors. Thus the figures cited include the benefits of everything from 
biotechnology to the rise of containerised transport.''

Also, the research cited by Mr Rudd covered the periods 1985 to 2001 and 
1984 to 2002, ''when the internet was in its infancy and broadband was 
pre-natal''.

-- 
David Boxall                    |  My figures are just as good
                                |  as any other figures.
http://david.boxall.id.au       |  I make them up myself, and they
                                |  always give me innocent pleasure.
                                |                     --HL Mencken