Given the make-up of the Auckland and Bay of Plenty regional economies, we illustrate the overall impact at a regional economy level of fast broadband from early roll-out and uptake. We estimate the productivity benefits of fast broadband could lift GDP by 7-9 percent above its business-as-usual level by 2025 if early roll-out, adoption and uptake is achieved.BERL's report on the benefits of broadband for Auckland is attached to the minutes of an Auckland Council Meeting.
I haven't the time to put into fisking this one. But a few bits of interest:
- They reckon the benefits to primary industry in the Bay of Plenty region is greater: "the estimated total regional benefit of broadband applications to the dairy production industry in the Bay of Plenty region is about $71 million. This is equivalent to about 7 percent of the export value of dairy product in the Bay of Plenty." Dairy can be made more productive by moving from zero internet to half-decent internet. Just imagine the benefits to Fonterra in being able to solve the Salesman problem if they have real-time access to milk volumes in the tanks at all the farms in the area. But I can't see how that's substantially better achieved at 10 mbps than at 500 kpbs.
- They figure the Auckland region's GDP, by 2025, is 1.8 billion dollars higher if broadband rolls out in 2012 instead of 2015. For NZ as a whole, we get a $4.7b boost. That's about a thousand dollars per capita. I can't believe that there's any difference a decade on that's discernible from noise.
- I can't help but suspect that there's rather a lot packed into the last two bits of "if early roll-out, adoption and uptake is achieved."
- They spend a fair bit of time highlighting the economic benefits of future growth in a bunch of industries where broadband hardly seems the binding constraint. Efficiency benefits of Kiwifruit farmers being able to file reports online with Zespri rather than paper forms hardly requires really fast broadband. I'm also not sure that broadband access is a bigger constraint for aquaculture than are regional consenting issues.
If the Auckland and Bay of Plenty Councils believe the results of the study they commissioned, I really hope that they go ahead and make the broadband investment using their own ratepayers' money rather than using the report to pressure Key into providing Auckland with what's mostly a private good.
HT: Henry Ergas, who's done great work debunking similar claims about Australia's national broadband network.