Making the Nation Ready for Broadband

[Commentary] At last week's open Commission meeting, I explained how writing a National Broadband Plan is like solving a mystery. The mystery involves why some parts of the economy have embraced modern communications to greatly improve their performance while others lag far behind.

A recent book -- Wired for Innovation -- offers some clues. In researching why certain companies benefit from the use of information technology while others, similarly situated, do not, the authors found the benefits of the technology only come to life if the companies also change their fundamental processes and develop what the authors refer to as a digital culture. Having technology is not enough.

Similar clues can be found in the 1990 paper, "The Dynamo and the Computer", which explored why major innovations in microelectronics, fiber optic communications and computing had not yet shown up in productivity statistics. Part of the answer turns out to be diffusion lag---it takes time for one technical system to replace another. The author points out in the early 1900's factories didn't reach 50% electrification until four decades after the first central power station opened. One cause of that diffusion lag was the unprofitability of replacing "production technologies adapted to the old regime of mechanical power derived from water and steam." The problem was not just getting the electricity. It was the cost of completely reengineering factories to benefit from electric power over the tried and embedded techniques of an earlier time.

So today, some sectors of our economy have a diffusion lag in adopting their processes to take advantage of the modern communications era. But why? Solving the mystery of today's diffusion lag turns out to be critical to what Congress asked us to do in directing us to give our country a plan for utilizing broadband to advance national goals.