Monday, December 7, 2015

High Speed Access is Mostly about Entertainment, Not "Economic Growth"

Economists actually do not have absolutely unassailable proof that deployment of high speed access, in and of itself, drives economic development, even if policymakers, politicians and the general public likely believe that to be the case.

It is possible to argue with conviction that widespread deployment of mobile or fixed high speed access is correlated with general levels of economic development or income. But the precise nature of the correlation--or causation--is unclear.

Oddly, high incomes and high rates of economic activity might spur the deployment of high speed access, and its adoption, rather than the other way around.

In other words, it is impossible to rule out, with certainty, the notion that affordable high speed access is “caused by” wealth and strong economic activity.

As a practical matter, the distinction hardly seems to matter. Everyone behaves as though high speed access is a good thing, and underpins economic growth, aside from providing other valuable social goods.

Complicating the analysis is the fact that much of the activity associated with high speed access is not directly related to economic activity.

When faster networks (mobile or fixed) are deployed, with service sold at affordable prices,  People start to watch video, including real-time entertainment video.

Aside from the direct and indirect impact of the activity for those directly involved in the media business, it is hard to see how “watching video” actually contributes much, generally, to economic growth. We can argue endlessly about the social impact and value.  

In North America, where fourth generation mobile networks are widely deployed and routinely used, video entertainment constitutes 37 percent of total traffic and 41 percent of downstream traffic.

Some might argue that this hardly matters. When people and businesses have high-quality Internet access, they can use such tools to grow their businesses and conduct their work, even if the consumed bandwidth mostly is entertainment.


source: Sandvine  

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