Wired Communities, Smart States:
Is Digital Infrastructure the New Public Works?

by John S. Niles

Sidebar: Economic Development and Broadband Telecommunications (1998)

Government officials working on economic development perceive that business leaders increasingly demand megabit plus telecommunications to support their operations, and that such services may not be readily available without special attention from outside the telecommunications industry. Furthermore, in the competition between states and regions that economic development leaders assume, there is a competitive advantage in having telecommunications that is simply better than what the majority of regions can offer.

Government officials and economic development leaders prefer that existing businesses in a region reach out over telecommunications networks to do business worldwide, rather than moving out of the jurisdiction to be near those distant markets. The existing local geographic community can be preserved if it can become part of the larger world of commerce through telecommunications networks.

Telecommunications is also a critical mechanism for efficient and effective public education and other government service delivery that are part of a healthy business climate.

Furthermore, business activities in a healthy but changing economy are inevitably somewhat misaligned with locations where people live and with their skills. Government officials have an understandable inclination to focus their economic development efforts on gaining benefit for population groups and geographic regions that are in the lower quartiles of income, wealth, opportunity, and hope. The private market is less inclined to serve lower quartiles, because the business opportunity is not as great. The growing level of competition in the telecommunications industry causes both incumbent companies and new competitive entrants to give first priority to large, wealthy markets. Thus, government officials -- who are inclined to worry about equity -- become particularly concerned about improving the quality and affordability of telecommunications services in "thin route" geographic areas where population densities are low, or where the preponderance of the population is impoverished. This concern in effect extends the universal service principle -- meaning, every household and business should have affordable access to an ordinary telephone -- to include broadband services also.

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