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UK Government Study Examines the Impact of its Broadband Investment

Wednesday, February 20th, 2013 (2:01 pm) - Score 792
uk farmer john and dog george

The Department for Culture, Media and Sport (DCMS) has published the results of a new study that claims to provide a “comprehensive assessment” of the social, economic and environmental impacts of its investment to help improve broadband ISP networks around the United Kingdom.

Broadly speaking the upbeat 51 page report finds that access to better broadband has a “material positive impact on national economies“, boosts international trade, causes more people to work from home, saves paper, reduces some Co2 emissions through teleworking but can be worse in other areas, helps rural communities that would otherwise have fewer opportunities and is even associated with “higher levels of wellbeing“.

As you’d expect the government aren’t likely to produce a report that completely trashes their investment of around £1bn, thus the outcome is broadly positive across multiple fields and largely avoids the often contentious issue of technology choice (FTTH vs FTTC etc.). Sadly the generalised output and use of many different data sources makes this a particularly difficult report to summarise.

Rough Summary of the Key Findings

Economic impacts
• There is a strong consensus in the literature that broadband has material positive impacts for national economies
• The routes to economic impact include construction effect and productivity growth.
• The net enterprise-creation and job-creation impacts can be positive at a local level and these vary by sector. But ‘creative destruction’ and displacement effects make the net employment impacts more uncertain at larger geographies.
• Some studies suggest increasing returns from broadband at higher levels of penetration and ICT maturity but there may also be a ‘saturation effect’, with diminishing returns beyond a certain point.
• Broadband is an enabler for international trade and for innovation which takes time to convert into financial and economic impacts
• The extent of benefits realisation appears to be dependent on managerial culture and skills and on the regulatory environment.
• There is some firm-level evidence of productivity benefits associated with teleworking, enabled by broadband in the home.
• There are very few empirical studies as yet on faster broadband, but they mostly point to a positive incremental impact.
• The forward-looking studies are generally optimistic re the future impact of faster broadband and of cloud computing (enabled by faster broadband). However, there are some cautionary and dissenting voices on the scale of faster broadband’s impacts.
• The construction effects may be stemming a decline in direct telecoms jobs, rather than boosting employment growth

Environmental impacts
• ICT is a significant source of carbon emissions and broadband networks are significant consumers of electricity. However, ICTs in general, and broadband in particular, offer opportunities to reduce emissions through a variety of mechanisms.
• Faster broadband can lead to higher emissions, but the energy efficiency of network technology is constantly improving.
• There are likely to be incremental environmental impacts (positive and negative) around teleworking.
• There are also likely to be impacts associated with business travel and cloud computing.
• The incremental impacts of faster broadband around e-commerce are rather uncertain.

Social impacts
• The broadband internet has clearly had far-reaching social impacts in areas such as communication, entertainment, shopping, learning, health, access to employment and interactions with government.
• On balance, the use of the internet is associated with higher levels of wellbeing and some studies have developed estimates of the ‘consumer surplus’ associated with broadband.
• The incremental social impacts of superfast broadband are likely to include an increase in time spent consuming video entertainment and an increase in the use of video communications.
• For areas currently lacking 2Mbps connectivity, improvements will mitigate the extent of adverse impacts for all web applications from increasing [web]page sizes and will mitigate the impacts of being increasingly perceived as unattractive due to relatively poor broadband

UK Broadband Impact Study (PDF)

Leave a Comment
8 Responses
  1. Fine words. They are not delivering the capability to deliver the goods though, and all the money just goes to cabinets which are a dead end. The whole job will be to do again. The last two governments will go down in history as digital dinosaurs conned by an incumbent desperate to protect its obsolete ass ets.

  2. Avatar dragoneast

    Don’t you just love all this universal modern marketing gibberish? Well, we must do so as we get so much of it. Personally I find that I can make little sense of any of their PR gumph but I suspect they just make it up as they go along knowing we’ll all forget with our short attention spans. Not for the first time, remember our transformed economy and the end of boom and bust; and not just the UK either.

  3. Avatar Sledgehammer

    I am waiting for the power to go off (power cuts) then all the cabs on FTTC will cease to function + VM. The fact that we are short on generating plant is far more serious than the above article. Again our MP’s are toddling alone to the edge of the cliff without a clue, nothing changes there.

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