Telecommunications and Economic Development Policy

Technology has promised many benefits to consumers and businesses, and it is easy to be beguiled into believing that all of those benefits will be forthcoming if only, and only if, large investments in equipment are made immediately and everywhere. This reasoning is faulty because those benefits insofar as they are demanded by end-users, will be supplied, if not by regulated telcos, then by their competitors. This article suggests a "micro-macro" approach to policy. Its primary aim is to coordinate and integrate dispersed sources of demand. The strategy will achieve the benefits of an information-rich society in the most critical areas of social concern, distributing them over both urban and rural areas in a reasonable time frame. By establishing goals for health-related and education-related information systems, installing the necessary technological base to link suppliers to customers over a dispersed and diverse client group, and minimizing the noneconomic investment needed to create a market for such services, industry and regulators, working together, can rationalize infrastructure investment without sacrificing either too much efficiency or too much equity. This strategy will go far to resolve the fundamental tension between two goals: uniform availability, and competitive efficiency.