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Productivity Questions for Public Sector Fast Fibre Network Financiers

Author

Listed:
  • Bronwyn HOWELL

    (New Zealand Institute for the Study of Competition and Regulation; Victoria University of Wellington, New Zealand.)

  • Arthur GRIMES

    (Motu Economic and Public Policy Research; University of Waikato, New Zealand.)

Abstract

Fast internet access is widely considered to be a productivity-enhancing factor. However, despite promises of substantial gains from its deployment, the evidence from recent empirical studies suggests that the productivity gains may not be as large as originally hypothesised. If substantiated, these findings suggest that current government plans to apply significant sums to bring forward the deployment of fast fibre networks (e.g. in both Australia and New Zealand) may not generate returns to the extent anticipated by their sponsors. Drawing upon the original ‘computer productivity paradox’ literature, this paper develops a critical questioning framework to assist policy-makers in identifying the salient productivity issues to be addressed when making the decision to apply scarce public resources to faster broadband network deployment. Using multiple literatures, the framework highlights the nuanced and highly complex ways in which broadband network speed may affect productivity, both positively and negatively. Policy-makers need to be satisfied that, on balance, government-funded investments in faster networks will likely generate the anticipated net benefits, given the significant uncertainties that are identified.

Suggested Citation

  • Bronwyn HOWELL & Arthur GRIMES, 2010. "Productivity Questions for Public Sector Fast Fibre Network Financiers," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(78), pages 127-146, 2nd quart.
  • Handle: RePEc:idt:journl:cs7807
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Haller, Stefanie A. & Lyons, Sean, 2012. "Broadband adoption and firm productivity: evidence from Irish manufacturing firms," MPRA Paper 42626, University Library of Munich, Germany.
    2. Rohman, Ibrahim Kholilul & Bohlin, Erik, 2012. "Does broadband speed really matter for driving economic growth? Investigating OECD countries," 23rd European Regional ITS Conference, Vienna 2012 60385, International Telecommunications Society (ITS).
    3. Mark Obren & Bronwyn Howell, 2014. "The tyranny of distance prevails: HTTP protocol latency and returns to fast fibre internet access network deployment in remote economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 65-85, January.
    4. repec:eee:iepoli:v:40:y:2017:i:c:p:21-25 is not listed on IDEAS
    5. Howell, Bronwyn, 2012. "Competition and Regulation Policy in Antipodean Government-Funded UltraFast Fibre Broadband Markets," Working Paper Series 4133, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    6. Howell, Bronwyn, 2012. "Diverse Dimensions of the 'Digital Divide': Perspectives from New Zealand," Working Paper Series 4112, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    7. Howell, Bronwyn, 2012. "Competition and Regulation Policy in Antipodean Government-Funded UltraFast Fibre Broadband Markets," Working Paper Series 2787, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    8. Heatley, David & Howell, Bronwyn, 2010. "Structural Separation and Prospects for Welfare-Enhancing Price Discrimination in a New 'Natural Monopoly' Network: comparing fibre broadband proposals in Australia and New Zealand," Working Paper Series 4056, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    9. Arthur Grimes, 2011. "Building Bridges: Treating a New Transport Link as a Real Option," Working Papers 11_12, Motu Economic and Public Policy Research.
    10. Van der Wee, Marlies & Driesse, Menno & Vandersteegen, Bernd & Van Wijnsberge, Pierre & Verbrugge, Sofie & Sadowski, Bert & Pickavet, Mario, 2012. "Identifying and quantifying the indirect benefits of broadband networks: A bottom-up approach," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72484, International Telecommunications Society (ITS).
    11. Richard Fabling & Arthur Grimes, 2016. "Picking up speed: Does ultrafast broadband increase firm productivity?," Working Papers 16_22, Motu Economic and Public Policy Research.
    12. Bert Sadowski, 2014. "Consumer Cooperatives as a new Governance Form: The Case of the Cooperatives in the Broadband Industry," Working Papers 14-03, Eindhoven Center for Innovation Studies, revised Feb 2014.
    13. Howell, Bronwyn, 2011. "Competition and Regulation Policy in Antipodean Government-Funded Ultrafast Broadband Network Markets," Working Paper Series 4099, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

    More about this item

    Keywords

    Internet; broadband; productivity; public investment;

    JEL classification:

    • H49 - Public Economics - - Publicly Provided Goods - - - Other
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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