VIDEO ENTERTAINMENT AS THE DRIVER FOR NETWORK INFRASTRUCTURE
The upgrade of networks to faster Internet connectivity speeds has been expensive (Atkinson and Schultz, 2009). Much of it piggybacked on existing cable and telecom networks, adding some tweaks rather than massive investments.
Fiber upgrades were driven by telecom companies’ move into cable-like Internet Protocol TV (IPTV) service, not by their desire for higher speeds for the public Internet. For rural areas and poor countries, the prospects for fast (or any) connectivity were relegated to mobile wireless (FCC, 2010; Noam, 2011, 2013). On the telecom side this reluctance to upgrade ahead of demand (‘supply push’) was partly due to an expectation of low interest by users in high-speed connectivity beyond their basic needs for email, web browsing, and music. Governments were cheerleading Internet deployment with an emphasis on do-good goals such as fostering e-education, e-health, e-government, and other worthy causes (OECD, 2012; Broadband Commission, 2013; LaRose et al., 2013). Upgrading networks for online entertainment, in contrast, was seen as frivolous. Yet this view is short-sighted. Instead of wringing hands one should in fact embrace this evolution as a great opportunity for development (O’Neill et al., 2014). Entertainment use will become a driver for network upgrades in both rich and particularly in poor countries. People need a ‘killer app’ to justify paying for high speed Internet. And entertainment, is such a killer app. For access to entertainment, people will save and invest. They are willing to pay for it directly, through a user tax, or through advertising that ends up in their product prices. Such a demand will generate the business incentives to upgrade the telecom and mobile infrastructure and to reallocate cable bandwidth to Internet usage.Thus, a demand for entertainment creates the economic foundation for network upgrades, and other applications can then piggyback on it. By unleashing the demand for Internet-based entertainment, media policy becomes economic development policy. Instead of supplying investment funds or seeking foreign assistance for upgrading the basic Internet infrastructure, governments can focus on residual problems of equality, gaps, and openness.
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