Impact of a national information infrastructure: towards a coupled network-design/general-equilibrium economic-model

We examine how a judicious use of information technology can reduce the capital investment, and the time required for infrastructure planning. Specifically we examine how large-scale broadband network infrastructures can substitute for distance reducing physical infrastructure like roads and railways. We specifically consider India because it has a dynamic information technology industry (IT) which can utilize a broadband telecommunications infrastructure. The enormous bandwidth of fiber-based (and similar) networks offers considerable benefits in substituting for physical transport using high quality telecommuting/telepresence, which can lower the amount of required infrastructural investments. In the long run, the ability of telecommunication to substitute for various kinds of physical transport will have global economic implications. It is hoped that the attempts outlined will be a first step to quantifying some of these effects using a general-equilibrium economic model. We first discuss the rationale for a broadband network in developing countries, which have low levels of income and investment capital. Next, we discuss a methodology for evaluating trade-off between telecommunication networking, and transportation. An example illustrating the methodology is provided.