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PHILADELPHIA, Penn., February 3, 2010 – Investment in broadband infrastructure, most believe, is essential to our nation’s future economic health.

In an information economy, the race is to the swift: those who can quickly access more, better information will innovate, communicate, and transact at a far greater rate than those who cannot. That’s how the argument goes. As our nation prepares to invest billions in broadband infrastructure, it appears that “We the People” have accepted that argument.

One nagging question remains: is the argument valid? Absent corroborating data, it’s just a plausible hypothesis…and many such arguments have been disastrously wrong. History is littered with them: the South Sea Bubble, Tulipomania, the Laffer Curve, and last but not least, the Internet Bubble of the 1990’s.

Looking to history is one way to test for the accuracy of the argument. However, we lack a valid comparison for broadband connectivity. As technological innovations go, the Internet and the World Wide Web are unprecedented.

Trains, planes, and the telegraph machine were all astonishing, transformational technologies. The Internet, however, is more on the level of the taming of fire for human use or the invention of the wheel.

Thus, when an academic study comes along that appears to find a correlation between broadband access and positive outcomes – even one that carries with it many caveats, people pay attention. Such was the case with a study authored by Jed Kolko of the Public Policy Institute of California, published on January 12, 2010.

The study, entitled “Does Broadband Boost Local Broadband Development?,” used traditional economic research methods to examine the relationship between broadband availability and economic growth in parts of California. The next day, Kolko and research consultant Davin Reed presented the results to about fifty people at the New America Foundation’s headquarters in Washington.

On the dais were Kolko, Joanne Hovis, President of CTCnet and president-elect of NATOA; Sascha Meinrath, Director of NAF’s Open Technology Initiative; and Benjamin Lennett, Policy Analyst at NAF.

Video of the full meeting is available on YouTube.

The presentation lasted a little over two hours, and included an overview of the study, a headline-level description of its results, and a lively discussion with the clearly well-informed audience.

A quick summary follows:

• The official headline is that in some areas of California, there is a strong, positive correlation between broadband access and employment growth—particularly in areas with a strong technology sector and low population density.
• There are many caveats, about which Kolko was forthcoming. With this kind of research it is quite impossible to rule out all sources of error without constructing a study that has no relevance to the real world. By describing the limitations of the research, Kolko did what any responsible researcher would do. This does not imply, however, that the audience expressed much interest in them. There appeared to be a rush to generalize from a few locations in California to the world at large, which leads us to the next point
• The unofficial headline, far more salient than Kolko’s study and far more urgently felt among the audience, was hunger for data about the impact of broadband on the economic health of communities, as well as what some call “externalities.” “Externalities” are things that really matter, such as safe housing, good health, and a living wage. They are central to the quality of life, but are often intangible—in other words, they are “external” to economists’ ability to measure them.
• As some noted, it would behoove the U.S. to relinquish its need to see itself as superior and instead look to other countries that have led in broadband investment, the opening of access and the encouragement of adoption.
• Simultaneously, there was little awareness among this group of the research that has been done in fields outside of economics, and public policy. For instance, there was no awareness of the research showing that for certain chronic behavioral syndromes, such as compulsive gambling, smoking, and overeating, Internet-mediated treatment is highly effective and may be more appealing to patients who feel uncomfortable publicly disclosing the nature of their problems.

This last discussion was, if anything, the clearest piece of evidence pointing to the need for something Paul Budde, one of the architects of Australia’s ambitious Internet program, terms “trans-sectoral” thinking.

This is thinking across the boundaries long held in tightly bound organizational silos and not permitted to ‘fraternize’ Budde believes that the greatest gains from connectivity will come when people learn to venture beyond their narrow silos of expertise and begin to share, with mutual curiosity and respect, the ways their discipline would approach a problem, how it would ensure that the remedy was appropriate and measure outcomes.

For the first time in history, we have the machinery that could make that possible. When this comes to fruition, the ‘real’ world and the world online will enjoy that rare state of being greater than the sum or their parts. And we will be the beneficiaries.