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March 05, 2009

Beefing up broadband

By many measures, our country lags behind others in the availability of high-speed, high-capacity Internet service, particularly in less-dense areas. Some have proposed spending billions of dollars at the federal level to remedy this. Would this be a good idea?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, many people have actually found a link between economic growth and broadband availability, so I think it is pertinent to ask if you want to improve economic development in many parts of North Carolina - for example, rural areas - would broadband - pushing broadband - be a way to do that. Well, I think the tentative answer would be 'yes,' but that still raises a lot of questions. First of all, if broadband isn't available, is it simply because people there don't want it, are aren't willing to pay for it, or are there some impediments to private firms providing it? Secondly, if government were to get in and directly provide broadband, would that mean that they're going to push away, for example, private competition, private companies? And many economists say that you need competition in order to keep prices in line. And then finally, if you do decide to have government help, what form should it take? Should you actually have government providing the service, or should we use government to provide tax breaks and grants to encourage private provision?

Posted by Dave at March 5, 2009 08:00 AM