Productivity Questions for Public Sector Fast Fibre Network Financiers

Bronwyn Howell and Arthur Grimes
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Bronwyn Howell: New Zealand Institute for the Study of Competition and Regulation; Victoria University of Wellington, New Zealand.

Communications & Strategies, 2010, vol. 1, issue 78, 127-146

Abstract: Fast internet access is widely considered to be a productivity-enhancing factor. However, despite promises of substantial gains from its deployment, the evidence from recent empirical studies suggests that the productivity gains may not be as large as originally hypothesised. If substantiated, these findings suggest that current government plans to apply significant sums to bring forward the deployment of fast fibre networks (e.g. in both Australia and New Zealand) may not generate returns to the extent anticipated by their sponsors. Drawing upon the original ‘computer productivity paradox’ literature, this paper develops a critical questioning framework to assist policy-makers in identifying the salient productivity issues to be addressed when making the decision to apply scarce public resources to faster broadband network deployment. Using multiple literatures, the framework highlights the nuanced and highly complex ways in which broadband network speed may affect productivity, both positively and negatively. Policy-makers need to be satisfied that, on balance, government-funded investments in faster networks will likely generate the anticipated net benefits, given the significant uncertainties that are identified.

Keywords: Internet; broadband; productivity; public investment (search for similar items in EconPapers)
JEL-codes: H49 O33 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (28)

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