Broadband as Means For Job Creation Debated at FCC Workshop

Questions raised about whether broadband will draw rural workers into urban workforce

By John Eggerton -- Broadcasting & Cable, 8/26/2009 12:59:07 PM

Rolling out broadband does not necessarily translate into job creation, and online video will be the death of traditional TV.

Those were some of the conclusions from some academics weighing in on an FCC workshop on "Economic Growth, Job Creation, and Private Investment."

James Prieger, a professor at Pepperdine, pointed out that broadband may add to productivity, but that could mean doing more with fewer workers. He said that deploying high-speed Internet was not a Band-Aid that could be "slapped on" an ailing labor market or economy.

Broadband could attract workers from town x to town y, he said, but he didn't see how from a state's point of view that was necessarily a good thing. And he called a deeper problem the issue of globalization.

While he said that senators "wax eloquent" about broadband drawing rural workers into the urban workforce, he asked why it was going to be rural Indiana rather than rural India that was going to benefit.

Chris Furman, a professor at the Georgia Tech, seconded Prieger's assessment, saying that there was "little evidence that use of advanced Internet was associated with growth in employment."

Spurring employment is one of the goals of the economic stimulus package, part of which included spurring broadband deployment through grants, loans and requiring the FCC to produce a plan to get broadband to unserved and underserved areas.

Ralph Everett, president of the Joint Center for Political and Economic studies, wasn't ready to concede the point. "Broadband means jobs and communities need jobs," he said. He had his own studies, including one that showed that increased broadband contributed to 52,000 or 281,000 new jobs in California in 2005.

He said access to broadband was about online job searches and 21st century skills that would be necessary to live in that century.

He pointed out the higher unemployment rate for African Americans and lower broadband adoption rates said the way out begins with a broadband plan that connects them and at least gives them a fighting chance for the social and economic progress that for them is now "just a dream."

The workshop, one of many, is part of the FCC's preparation of that plan, due to Congress by Feb. 17.

Brent Goldfarb, associate professor at the University of Maryland, said that online video is "on its way to killing [traditional] television," as VOiP and cell phones are leading to the demise of landline.

Given that, he argued, leading providers who are increasingly bundling video, voice and data have incentives to leverage their control of broadband to protect that service. He did not say he had evidence of that, but that it was something the government needed to be aware of and track.

The key, he said, was preventing barriers to entry so that the broadband rollout could be a test bed for what works. He said being able to measure that broadband ecosystem would be "very informative" in charting how well it sustains new entrants over time.

Prieger and Golfarb agreed about the need for experimentation in technology, business models, products, services, and implementation. The key to that, said Goldfarb, was keeping barriers to entry low.

Experimentation creates big winners and big losers, said Goldfarb, and incumbents will exercise their power to prevent being one of the latter.

Another theme running through Wednesday's workshop was a common one: The need for more and better data.