The tyranny of distance prevails: HTTP protocol latency and returns to fast fibre internet access network deployment in remote economies

Mark Obren and Bronwyn Howell ()

The Annals of Regional Science, 2014, vol. 52, issue 1, 65-85

Abstract: Public policies to deploy enhanced local broadband access infrastructure in locations physically very far removed from the firms and customers with whom they transact are frequently justified by claims of increased competitiveness arising from the elimination of the ‘tyrannies of distance’. Yet relative distance-based disadvantages remain in respect of time-dependent applications and those hosted on distant infrastructures or requiring data sourced from distant locations. Trading off the effects of faster local access and latency on the time taken to load a Web page based on the HTTP Web protocol, we demonstrate that the increasing returns to distance rapidly overcome the effect of faster local access bandwidth as the distance the data must travel increases. We conclude that claims that investment in ultra-fast local broadband access will unconditionally facilitate a step-change in national economic performance are without foundation. In the absence of some compelling underlying competitive advantages, the ‘transformational’ economic benefits will be local rather than international in nature. At best, government investment in nationwide fast fibre networks is a defensive strategy that enables ongoing participation in the international economy, but at relatively higher costs than those faced by larger economies in closer proximity to end markets. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: O18; O33; R11; R12 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00168-013-0574-0

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