Arthur Grimes sets himself up for crucifixion

Now here’s a brave, brave man.

We’ve all been hearing recently of the step change that broadband will bring to New Zealand – it seems to be one of the big election issues with both main parties coming to it from different angles. Both of these angles have however main the mistake of assuming economic benefits from broadband as a given – without the empirical analysis and data to back that claim up.

Into that breech comes Arthur Grimes, of the Motu Research and Education Trust. Grimes spoke last week at Victoria University’s Institute of Policy Studies and discussed infrastructure in general and had some interesting points about broadband.

In essence grimes stated that unlike traditional infrastructure (roads, water etc), broadband has no clearly defined purpose and as such falls under the “general-purpose technology” category rather than pure infrastructure.

We’re trying to get a handle on what are the benefits of broadband and who might they accrue to. Give me another six months. At present I wouldn’t have any particular answers; but the conceptual answer is that there is a difference between broadband and road straightening. With broadband we just don’t know what the benefits will be. I suspect that under traditional cost-benefit analysis, we would say it’s hardly worth rolling out broadband. We’d look at what benefits we know about and apply appropriate discounts and consider that it’s very expensive anyway and we’d say ‘those numbers don’t add up’. But if I look at the uncertainty and its role as more of a general-purpose technology, then maybe the answers are very different. At the moment, there doesn’t seem to be much of a framework for thinking about it. We’ve just got two parties saying ‘we’ll spend’ and ‘we’ll spend more’. I don’t think there’s much real thought been given to why you would do that; but maybe there is a reason that justifies that approach.

Like I said – a brave man indeed. Not quite as pointed as Telstra-Clear CEO Allan Freeth who claimed that;

the main result of faster broadband links to the home may be more downloads of pornography and movies rather than improvements to productivity

Which is something neither Helen Clark nor John Key particularly wanted to hear.

My take on this? I believe widespread broadband is an enabling technology that is beneficial for the country – this however is a different statement from those who seek to differentiate the general benefits of broadband per se with the supra benefits of FTTH.

The jury’s out but we’re fools if we think they’re able to make a decision without the full data.

Bring it on Arthur Grimes and Motu!

1 Comment
  • Too late. Like many investments, there is an element of risk, and the longer the investment is left, the higher the risk of being at a competitive disadvantage as a result of not minimising the risk, but being decisive about making the investment. I’m not saying I know what will happen but I support a significant governmental investment in network infrastructure as opposed to wait-and-see or reliance on the private sector to sort it out.

    The porn and movies arguement is tied. It’s porn and movies that contributed in part to what is now a good chunk Freeth’s (TC’s) revenues.

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