Feb

5

$515,000,000,000 for the Pentagon... Nothing for Broadband?

sascha's picture

I've just been reading about the new 2009 budget numbers. George Bush is asking for $515,000,000,000+ in government spending for the Pentagon. It occurred to me as I was thinking about this gargantuan number, how come we're constantly hearing about the tiny amounts being proposed for broadband, yet huge numbers like these barely raise an eyebrow.

So I thought I'd break down the numbers to drive home my point. Assuming 300,000,000 Americans, every man, woman and child will be paying a bit over $1,700 to support the Pentagon's budget. Which ends up being about three times as much as people pay for their broadband at home... but wait, people buy broadband for their household -- so I needed to find out how many households there are in the US. According to 2004 census numbers, there's a bit under 115 million households -- so once one makes the adjustment, the per household Pentagon allotment hefts in at roughly $4,500 for the year.

As we ponder where our money is going this next year, remember, broadband isn't really the big ticket item, it's not even close. Recent estimates have claimed that $150 billion (a bit under 30% of the proposed Pentagon budget) would provide universal fiber broadband connectivity to every household in the United States.

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  1. Tom Poe (not verified) on Tue, 2008-02-05 16:01

    Numbers are fun! Here's a number I proposed to my local town mayor, and our state governor. If rural communities want broadband infrastructure, they need an idea of what the return on investment might be:

    Suppose the town can establish a wireless mesh network for their "last mile solution", but the cost of reasonable wholesale Internet access is problematic. Let's look at what happens if the town adds one or more digital recording studios for the residents to use. These are but PC-based computers with freely available software from Stanford University's Center for Computer Research in Music and Acoustics. Children use these powerful applications to learn to read/write music, make CDs, DVDs, tv and radio shows, podcasting and even full-featured movies.

    A homeless person comes in, uses the studio to create a CD, sells it to 100 sympathetic passers-by for $10 each:

    1CD x $10 each x 100 sales to sympathetic passersby = $1000

    If the local church decides to create a fund-raiser CD, and sell it to 100 sympathetic donors:

    1CD x $10 each x 100 sales to sympathetic donors = $1000

    Now, if the community has 100 CDs created for different reasons and sold to 100 folks each time:

    100CDs x $10 each x 100 sales per event = $100,000

    If there are 10 communities per county, the revenues jump to $1 million dollars a year. Iowa has 99 counties, The state generates $100 million dollars in revenues that stay within the state that didn't exist, before. By running the numbers, it quickly becomes apparent that states which encourage the communities to shift their broadband infrastructure to one that benefits the communities, rather than supports corporate special interests, stands positioned to realize literally billions in additional revenues that were not there with the incumbent telecommunications industry.

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