A recently released report by Diana Carew and Dr. Michael Mandel of the Progressive Policy Institute says government investment is best spent on transportation infrastructure rather than on broadband buildout. For every $1 invested in roads, bridges, and public transit systems, the economy receives a $1.5 to $2 benefit. Further, the study says, “the economic boost resulting from increasing broadband investment is not so much larger than the economic boost from increasing investment in transportation infrastructure,” and the greatest economic benefits come from actual broadband adoption.
Whether we’re talking about transportation or communications infrastructure, increased investment in creating, updating, and maintaining America’s roads, bridges, and communications infrastructure is critical to furthering U.S. trade, regional commerce, and access to essential services. What this paper provides, then, is an assessment of which parties are best suited to support continued growth and investment regarding transportation and broadband build out.
The study’s authors advance three main points:
- Given the inherently public nature of roads, bridges, and transit, governments are in the best position to fund transportation infrastructure projects.
- Government investment in broadband buildout may actually displace private investment and will not yield as great a return, except in the cases where geographic and fiscal realities make it unlikely that private interests will expand their footprint into certain areas.
- Federal, state, and local governments should invest their limited resources in transportation infrastructure rather than overbuild broadband in areas currently being served by private investments.
At root, this report supports the proposition that transportation infrastructure can produce more direct, tangible, and immediate returns than broadband infrastructure. Therefore the public interest is better served by increasing government funding to areas that are currently lacking vital resources, rather than duplicating the efforts of the private sector in one of the nation’s leading areas of economic growth – telecommunications.
In most instances, the report notes, the upfront costs of transportation infrastructure are too large and the direct benefits too low to make a sound business case for single companies, organizations, or individuals to invest in. There again, governments are best suited to serve the public good by investing in necessary transportation resources.
Likewise, private companies have proven to be best resourced to provide high-quality and reliable broadband. In contrast, government efforts at providing municipal broadband have been a mixed-bag, with several examples of the costs of operating and maintaining government broadband being too high, and producing unbalanced benefits for their expense.
In sum, the authors opine, “by addressing the critical need for more transportation infrastructure investment, federal, state, and local governments would not only enhance the competitiveness of our nation’s business climate and improve the quality of living for its population, but it would do so in a way that generates positive economic return.”