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Plenty of Stimulus for Broadband
Friday, February 27, 2009 7:54 AM


(Source: International Herald Tribune)trackingBy Eric Pfanner

The broadband race is on.

As policy makers the world over haggle over how to revive ailing economies, one strategy has found widespread support everywhere from Washington and Berlin to Sydney and Seoul: investing in high-speed Internet access.

In recent weeks, the United States, Britain, Canada, Finland, Germany, Portugal and Spain have all included measures to expand broadband access and to bolster connection speeds in their planned economic stimulus packages. Australia, France, Hungary, Ireland, Japan and South Korea have announced separate broadband plans, according to a compilation by the Organization for Economic Cooperation and Development, the association of free-market democracies.

While some of the plans have been in the works for months or years, analysts say it is no coincidence that so many of them are being rushed out now. The perceived popularity of building broadband networks provides political cover for bank bailouts. And as economies shrink, attracting foreign investment is ever more important.

"The crisis is making countries push forward with their digital agendas much more aggressively," said Charlie Davies, a senior analyst at Ovum, a telecommunications consulting organization. "There's this competition internationally to want to be there at the top and say, 'We're the most digitally advanced country, a great place to do business and all that.'"

Most of these plans seek to expand connections to rural areas where they are unavailable, in some cases talking about turning broadband into a universal service like electricity or running water. Another common goal is to increase the speed of existing links through incentives to build faster fixed-line and wireless telecommunications networks.

The plans highlight a range of economic benefits, from the small scale and specific to the sweeping.

Ireland said in January that its broadband program would directly create 170 jobs. Germany said last week, as the cabinet approved its broadband strategy, that "universal provision of efficient broadband connections and the construction of next-generation networks are a prerequisite for a return to growth and increased prosperity."

While analysts agree that investing in communications technologies makes economies more competitive, they are skeptical about whether the promised gains will materialize quickly enough to make the spending packages - ranging from euro 11 million, or $14 million, in Hungary to $7 billion in the United States - effective recession-busters. Allocating funds for new networks, so that cables can be laid, could take many months; completion of those networks might take years.




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