Broadband could add $500 b to US economy: study

WASHINGTON: Widespread use of high-speed Internet service by Americans could

contribute as much as $500 billion annually to the US economy, a new study by

the Brookings Institution released on Monday found.

Consumers would benefit from online home shopping, entertainment, traditional

telephone and health care services, as well as reduced commuting, adding $200

billion to the economy if half the country has the high-speed service or $400

billion if almost all Americans have it, the study said.

Plus, the higher consumer demand will also provide a boost to manufacturers

of computers, software and entertainment products, which would add another $50

billion to $100 billion to the economy, according to the study done by economist

Robert Crandall and engineering consultant Charles Jackson.

"The impact of broadband by any measure - in terms of GDP, jobs, US

productivity and efficiency - will be profound," said Jackson. "We're

looking at a transformative technology: one that doesn't just crate change at

the margins of an economic system, but at its core."

The study comes as the US economy is slowing, in part because of the fallout

in the technology sector with the telecommunications industry suffering much of

the pain. Several providers of broadband services have gone belly-up, including

NorthPoint and WinStar Communications Inc.

The study included all types of high-speed Internet service offered, digital

subscriber line (DSL), cable modems, satellites and wireless devices, among

others. Industry estimates project 8 per cent of American homes have high speed

Internet service, known as broadband, and local telephone companies like Verizon

Communications and SBC Communications Inc. are pushing for legislation that

would increase their incentives for deployment.

Reps. Billy Tauzin and John Dingell have proposed legislation that would

eliminate requirements that dominant local telephone carriers open their

networks before they can offer long-distance data services.

At present, Verizon, SBC, BellSouth Corp., and Qwest Communications , all

created from the 1984 breakup of AT&T, must prove their local networks are

open to rivals before they can sell long-distance voice and data services.

The Tauzin-Dingell measure would also eliminate requirements that the Bells

unbundle certain network elements and line-sharing necessary for competitors to

gain access to the local network but would require the Bells to deploy

high-speed Internet service in hard-to-reach and rural areas.

While analysts expect the measure to pass the House, key lawmakers in the

Senate have made it clear the bill will not pass in its current form.

(C) Reuters Limited 2001.