Return on Infrastructure Investment
There remains a large gap in perception regarding the value of communication infrastructure investment versus transportation infrastructure. Everyone gets the tremedous RoI achieved by public sector infrastructure projects associated with highways and airports, but communication infrastructure gets left to private entities intent on leveraging scarcity to preserve prices. The telco business model is anti-investment. The policy debates always revolve around this issue of investment where telco's argue they need some policy result in order to have incentive to invest. They win the policy result and subsequently fail to invest. Capital investment as a function of revenues remains very low. Most of the telcos invest less than they report in depreciation. The US government subsidizes billions worth of noise suppression barrier walls around highways across the country and zero in communcation infrastructure. It's not clear how to recreate the conditions that led to the interstate highway system initiated during the Eisenhower administration, but until the US obtains an equivalent conviction regarding connectivity the country will fall further and further behind in the global economy.
posted by Daniel @ Friday, September 05, 2008
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