February 10, 2009 10:54 AM
Why Still So Much Attention On Supply And Not More On Demand?
I continue to be amazed at how much the topic of mapping supply dominates the broadband discussion.
Is it important we know where there's broadband and where there isn't? Absolutely.
Can a supply-side-only approach spur deployment? Possibly.
But how are we supposed to solve the broadband problem if we're only looking at half of the equation?
The missing piece is demand.
More than knowing where supply is or isn't, if we knew where there's unmet demand that's what's most relevant to suppliers looking to expand and grow their businesses.
Plus if we can push broadband penetration rates up from 50-75% not only will it allow incumbents to grow it'll also provide room for new entrants to establish themselves. It won't just be about fighting for a bigger slice of the pie as the entire pie will be bigger.
Because of this another advantage of focusing on demand-side policies is that they're something everyone can agree on. Finding consensus on the supply side is almost impossible regarding a host of matters, like how much speed and competition we need. But no one will argue against trying to get more people online.
And it's not just about getting more people online, it's also about getting everyone to use networked technologies to a greater degree to drive new efficiencies and open up new opportunities in their day-to-day lives. In this way we can improve the way society works.
Yet despite these many advantages of focusing on the demand-side of the broadband equation, we still haven't committed a significant portion of our discussions on broadband policy to exploring how we can increase demand.
The most I've seen is suggestions of getting more computers and greater government support to pay for broadband service to those who can't afford it, with a smattering of talk about computer literacy and training programs. While these are all valuable components, there's little in the way of a larger, more comprehensive vision.
This vision for how policy and innovation can drive an increase in demand for broadband is at the core of what I'll be working on over the coming months at multiple levels, from identifying best practices in communities and organizations that have succeeded in this area, to implementing a comprehensive model to showcase what's possible in communities like Lafayette, LA, to formulating policies that can support these and other efforts.
2009 will be the year that we finally wake up to the fact that by focusing on spurring demand we can not only unify around an issue we all agree on but also create the demand that's required to truly spur the deployment of more supply.
Comments (2)
Geoff
Your comments seem thoughtful, but there's a question worth considering: does anything other than increasing availability and lowering prices hae a significant effect on demand?
Public education and community technology as you're suggesting have benefits, but I haven't seen any data that they yield significant increases in take rates. Connect Kentucky's data show that increasing availability apparently increased subscribership, but after adjusting for availability their "demand creation" was a total failure according to their own (weak) data.
Hiring a posse of bureaucrats to go out and tell folk "the Internet is great and you should use it more" might work if there were many people who didn't know about the Internet. Are there really that many people who have little idea so little understanding of the net that a lecture or newspaper article will change them? That's hard to believe in the United States in 2009 most people know so little about the Internet. It just doens't make sense if you think about it a minute.
Since 1999, I've reported community outreach efforts in Italy and Britain, massive promotion by carriers around the world, and what's probably $billions spent on advertising/marketing informed by expensive market research and produced by world class professionals. Almost without exception, the results have been disappointing.
On the other hand, dropping prices seems to work pretty well. Qwest reports a surge of orders last month with a $15 offering.
None of which means that community tech doesn't have social value or that you'd be wasting your time. But I haven't seen any evidence that it will result in much more broadband usage. Have you?
I believe this is the right question to ask before the government spends the requested $100 of millions. Will it work?
Which is why next week I'm part of the Georgetown/Columbia event Thursday, asking how to measure results. I'd welcome solid data from you (or anyone else) that a particular program resulted in far more broadband usage. If so, I'd be a strong supporter.
db
Posted by Dave Burstein on February 12, 2009 6:14 PM
Hey Geoff,
This is a great post and reflective of a couple of things you and I have discussed in emails. Again, looking at the Pew study http://www.pewinternet.org/report_display.asp?r=273, there seem to be many barriers that compound the limitations posed by population density and topography.
To some degree, I think some of this 'non-demand' should just be forgotten about; there is little hope of ever getting my grandmother to use the internet, and she is very cosmopolitan. Furthermore, even if we were successful in converting the 'non-demand' to 'demand,' I question how much they would add in terms of innovation and economic value.
The important demand, in my view, is the future of internet demand which lies with our children. It is no surprise that the children with the least access to computers and internet are children of impoverished families. The focus should be in bringing access to schools. However, making sure every school in the nation has a fiber line going to it means nothing if there aren't a commensurate number of 'terminals' (aka computers) throughout.... a factor in all equations relating to broadband buildout that I find advocates sometimes forget.
Now, the barriers to this sort of deployment are significantly lower, and are of a social and political nature as opposed to a private enterprise / population density / topographical nature. One notable societal hurdle that will have to be overcome is teacher education and willingness to use the internet as a form / aid to teaching. I believe training programs educating teachers how to effectively utilize the internet in the development and deployment of curricula is one of the most important actions we can take in ensuring that America will be at the forefront of broadband innovation in the future.
Obviously, this is more part of a long term strategy. In the shorter term, however, we need a different method for inspiring demand.
Posted by Daniel Stern on February 18, 2009 2:46 PM