In 2006, broadband accounted for about $28 billion in U.S. Internet service-provider revenue. Economists Shane Greenstein and Ryan McDevitt estimate that consumers would have been willing to pay $5 billion to $7 billion more than they did for the benefit of access. This "consumer surplus" and Internet service provider revenues together were equivalent to just over 0.1 percent of U.S. GDP -- this at a time when nearly half of American households had broadband. With regard to broadband subsidies in particular, Ivan Kandilov and Mitch Renkow at North Carolina State measure the impact of a U.S. government loan program that provided subsidized capital to telecom companies to roll out broadband in rural areas. They can find no evidence that the program had an impact on employment, payrolls, or business establishment.
The U.N. report suggests potential impacts far beyond economic growth, however. For example, it suggests that "given that there are rarely enough health practitioners to serve everyone in need of healthcare … broadband is needed to enable doctors to share images and diagnose patients hundreds of miles away using technologies such as video-conferencing." One might question the relative importance of "advanced e-health" when fully one-third of the 10 million child deaths in low-income countries that occur each year could be prevented with technologies as simple as oral rehydration therapy, breast-feeding, and insecticide-treated bed nets.
Again, broadband "offers a potential solution in the ability to deliver education in developing and developed countries alike," according to the report. But you have to wonder whether paying for fiber optics and computer labs is worth it in countries where, for 50 cents per child per year, deworming pills could reduce the incidence of illness-causing parasites and improve school absence by 25 percent. And you have to wonder even more when existing studies actually suggest that more widespread broadband use in schools may correlate with lower test scores. It's not much of a surprise, given that the studies found that the most popular activities for boys online were email, chat, Myspace, YouTube, music, and games. Broadband rollout to households is also associated with lower test scores -- almost certainly for the same reason.
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