Broadband and the key economic sectors

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Broadband and key economic sectors

A recently published OECD report urges governments to invest in open-access high-speed national fibre networks that can serve as the future delivery mechanism for a huge range of new and innovative public sector services.

And despite the large initial capital investment needed – typically US$ 1,500-2,500 per household connected – the report shows that National Broadband Networks can pay for themselves within ten years, through dramatic savings in just four key economic sectors:

According to the report, cost savings across the four sectors of just 0.5%-1.5% would be sufficient to justify the cost of laying high-speed fibre-to-the-home via a national point-to-point network.

The raw materials of the information economy are communications, digitized knowledge, bandwidth, and processing power

Electricity

In the power industry, broadband networks can provide consumers with a vision of their electricity use in real time, allowing them to adjust consumption based on price and helping electricity providers stabilize demand and manage electricity storage throughout the network.

With peak power the most expensive to produce, time-of-use rates induce a drop in peak demand by consumers that ranges between 3% and 6% and critical-peak pricing tariffs induce a drop in peak demand of between 13% and 20%. When there are enabling technologies present in the home (such as smart thermostats), the critical peak demand falls by 27% to 44%.

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Healthcare

In the health sector, network-based health monitoring of chronic medical conditions and low-cost remote consultation and intervention will be increasingly favoured by health providers, particularly those serving remote communities or ageing populations. In Australia, it has been estimated that cost savings in healthcare alone could pay for Australia’s National Broadband Network twice over.

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Transport

Real time traffic analysis and modelling will dramatically improve transport management and safety. Information delivered to traffic control systems and commuters in their vehicles will help streamline traffic flows and reduce congestion, cut fuel consumption and help minimize road accidents.

Variable pricing – made possible by broadband networks and monitoring technology – can make a dramatic difference. In London, for example, the congestion charge reduced traffic entering the zone by 21% and increased bus use by over 6% – meaning fewer cars on the road, less congestion, and less fuel burned.

OECD research also suggests that removing just 5% of traffic at peak times – by allowing telework, for example – would substantially reduce or even eliminate rush hour congestion from many cities.

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Education

Broadband is also having a significant impact on education and e-learning by improving access to digital learning resources, extending access to education to a wider community, promoting ongoing professional development, and helping link local, regional and national databases to improve administration.

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Other Sectors

Smart electrical grids, telemedicine, intelligent transportation networks, interactive learning and cloud computing all require fast communication networks to operate effectively.

New high-speed broadband networks are also playing an increasingly critical role in other sectors of the economy. Broadband has become the leading delivery system for a wide range of content produced by the publishing, music and video industries. Broadband is also the foundation for innovation in cloud and grid computing, which efficiently centralize computing power and offer rapid scalability of resources for users and businesses as needed.

The OECD report argues that high-speed broadband networks will be the key platform supporting innovation in the future much in the same way that electricity and transportation networks spurred innovation far beyond the dreams of their creators in the past. And just as electricity allowed businesses to re-arrange their productive segments within a factory, broadband will allow businesses to rearrange production globally to take advantage of production efficiencies in different geographic locations.

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