IBM CEO's Call for Bandwidth May Fall on Deaf Ears

Michael Vizard

A lot of vendors are pushing for more economic stimulus money to expand network bandwidth, including IBM CEO Sam Palmisano in a recent editorial in The Wall Street Journal.


The core of the argument is that by investing in network bandwidth, the United States will become more competitive and that more services jobs will be created. Palmisano notes that three-quarters of our economy is powered by services jobs.

No doubt, such investments ultimately will prove valuable. But in the current political climate, moving those types of investments to the front of the line will be seen as a taxpayer-funded boondoggle for the telecommunications industry -- and it doesn't seem to be hurting as much as, say, the auto industry.

We can argue all day about who is to blame for what. But the politics of the moment seem to dictate that economic stimulus money will be directed toward activities such as rebuilding bridges and tunnels and shoring up the manufacturing sector. Those types of investments create more jobs sooner than long-term strategic investments in broadband that might not pay off until 2012 and beyond.

The good news is that investing in physical infrastructure and manufacturing creates jobs for IT people, too. After all, these activities will take place in the United States. In contrast, it's not quite as clear that the gear that telecommunications carriers will need to power the next generation of services is manufactured in this country. So you can imagine the political backlash that investing in broadband services would create if it came to light that most of the manufacturing jobs tied to those investments were actually created overseas.

There's no doubt that the United States is behind when it comes to network bandwidth. But we might not be as bad off as some people would have us believe. There's also no direct connection between the availability of network bandwidth and job creation beyond a general leap of faith. And when you throw in previous stimulus investments directed toward increasing network bandwidth, the odds that more significant amounts of money will be shifted in this direction would seem pretty narrow.

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