An interview with Charles H. Ferguson, author of The Broadband Problem: Anatomy of a Market Failure and a Policy Dilemma. He discusses the AT&T-BellSouth merger and the broadband bottleneck in the US.
AT&T-BellSouth: Bad for Competitiveness?
Here’s a teaser:
Why is broadband deployment so crucial to U.S. competitiveness?
Broadband service is already the major bottleneck to technological progress in the IT sector. In many situations, it dominates the total cost of application deployment. If you ask what will determine the penetration level and deployment of very high quality video conferencing, it’s not the cost of the computers. If you amortize a computer over four years and compare it to the cost of the T-1 line, you’ll discover the T-1 is 80% of the lifecycle cost.
So the cost that the U.S. economy is paying for stagnant [broadband] price performance over the last decade is quite dramatic. You can argue that this is costing us a percent a year in productivity and in GDP growth.
And there are serious energy and homeland security impacts as well. Think of the importance of having access to broadband services if there were ever a truly significant oil shortage? Or if there was a serious terrorist attack, or something that required large-scale quarantines or caused part of the transportation system to be shut down. Broadband services would be quite important.