February 2009

month into the Obama administration, the economic crisis appears to shifting from Job One to the worsening mega story of 2009. There were shifting elements in that crisis narrative last week. But the underlying message may be the frightening breadth and depth of the problem. From February 16-22, coverage of the growing financial turmoil accounted for 40% of the newshole as measured by the Pew Research Center's Project for Excellence in Journalism—the fourth week in a row it has reached or exceeded 40%. That represents a modest drop from 47% the week of Feb. 9-15. But those numbers don't tell the whole story.

Even in a soft economy, a look at the fiber-to-the-home (FTTH) infrastructure scene suggests that Asia's countries will continue to reach the most people with the fastest networks in the years to come. In December, Pyramid Research predicted that FTTB/FTTH operators would pass around 212 million homes by the end of 2013, which is only about 12 percent of all households globally. But Asia stands out because of how aggressively its countries are passing homes with fiber. South Korea's KT Corp. plans to cover 90 percent of its access lines with FTTH by next year. Meanwhile, Japanese regulator Ministry of Public Management, Home Affairs, Posts, and Telecommunications plans to have 90 percent of all homes covered by fiber networks by the end of next year, too. Pyramid Research estimates that the Asia/Pacific region had more than 68 million homes passed by fiber infrastructure at the end of 2008. Nearly 25 million households throughout Asia/Pacific subscribe to a fiber-based service. So Asia/Pac countries represent about 78 percent of all residential FTTH connections across the planet. South Korea, Hong Kong, Japan, and Taiwan have the highest proportion of households connected to fiber networks globally.

[Commentary] To the US Broadband Coalition and all the state-level coalitions that are trying to bring together broadband players around the same table: we've come a long way, but we've a long way to go. We can't afford to continue caricaturing those with differing views from our own as being bloodthirsty capitalists or idealistic socialists. We must acknowledge that in order to achieve consensus no one side is going to be able to get everything they want in exactly the way they want it. Instead what's needed is to have everyone involved in this effort examine what it is they really want. What's most important to you, not in terms of specific legislation but instead in terms of the results. So for deployers that could mean getting more capital available to support deployment, more incentives to reward upgrades, and insuring that any new network management rules put in place don't hinder their ability to run and monetize their networks. For public interest groups that could mean getting the most bandwidth and the most competition out of the broadband marketplace and insuring that the public interest is protected from monopolistic providers.

Economists say the ability of broadband to spur economic development in rural areas is difficult to quantify. "Everyone talks about the jobs that are going to be created by this," said Scott Wallsten, a senior fellow at the Technology Policy Institute. "There is no way to measure that." One problem, he said, is there's no way to tell which of these jobs would have been created even without the stimulus bill. Raul Katz, a Columbia Business School professor, admitted the difficulty in counting jobs, but he nonetheless presented a paper that tried to quantify the effect of the broadband stimulus program on employment. "We know construction will generate jobs," Mr. Katz said. By his count, the stimulus bill will create 128, 000 jobs designing, building and administering the broadband networks. That figure also includes a multiplier effect that assumes that every 10 people directly hired by these projects will spend enough money to create 8 more jobs in other sectors. Beyond the construction, things get more than a little fuzzy. There is some research that shows that spending on networks will create new applications — be it "telemedicine" or e-commerce — that will spur more employment. Over the next four years, Mr. Katz allocates 378,000 jobs to these sources. But he also has his doubts.