Saving $23 Billion Isn’t Easy

fotnComputers haven’t given us a paperless office yet–but maybe telecommunications will help to take some cars and trucks off the highways. After all, America’s transportation infrastructure is facing a crisis, with demand far exceeding supply. What it we–the people using computers, phones, fax machines, modems, overnight delivery services, and airplanes to conduct business–reduced the demand? What if we substituted telecommunications for transportation?

One of the country’s most respected think tanks recently asked that question, and came up with a surprising answer. Arthur D. Little, the Cambridge, Massachusetts–based research firm, concluded that if Americans could substitute telecommunications for transportation 10 to 20 percent of the time, it would

* Allow six million automobile commuters to work at home.

* Eliminate almost three billion shopping trips annually.

* Eliminate nearly 13 million business trips annually through teleconferencing.

* Eliminate more than 600 million truck and airplane delivery miles annually through electronic transfer of paper documents.

What would this mean to the country? Savings of $23 billion. Most of the benefits would come from increased productivity, with smaller gains from the reduction of energy use, infrastructure maintenance, and pollution. The Little report reaches this conclusion:

“The transportation system is facing a crisis. We can balance supply and demand by reducing the demand on infrastructure, instead of increasing the supply of it. The demand on transportation will certainly be reduced if individuals and businesses are provided with the means to work at home, instead of commuting to a place of work; shop at home, instead of having to drive to shops; and conduct business in their offices, instead of having to fly or drive long distances. Also we can substitute transportation of information in paper form by its electronic equivalent.”

Well, this is not news-not to anyone who works for or reads this magazine. But you and I represent the grass roots. Arthur D. Little represents corporate America, the institutions that must back any change in work for its effects to be widespread. The Little report was cited by Sen. Conrad Burns (R-Montana), when he introduced an amendment to a transportation bill last fall. The bill, now law, requires the Department of Transportation to produce a report (due this spring) on the potential costs and benefits of telecommuting.

Now here’s the subtext. In its report, Arthur D. Little “assumes” that a nationwide fiber-optic telephone network is in place–and that without such a network, the 10 to 20 percent substitution level is probably not achievable. “A nationwide fiber-optic network will upgrade the capacity of the existing copper network from 2,400 bits per second (bps) to between 45 to 500 million bps. The effects of this will be dramatic,” the report reads. “Fiber-to-the-home should be sufficient to entice a significant portion of the population to change its behavior.”

You probably thought this column was going to be about the benefits of electronic communications, didn’t you? Of course, someone had to fund Little’s “multiclient” study, and it wasn’t the oil companies. It was six telephone companies and one manufacturer of telecommunications equipment.

Senator Burns warms to the fiber-optic topic himself. “Instead of concrete and steel, our highways of the future will consist of fibers of glass! Think of fiber optics as an information highway on which millions of cars, or bits of information, travel each second. Those cars can go anywhere in the world instantly….Our nation faces many problems, including an overburdened transportation infrastructure, a global economic competitive struggle, and a continuing domestic economic weakness. A close look at some of these challenges illustrates why rapid deployment of an advanced communications infrastructure is so important and [shows] what we can do to speed the development of this vital network.”

According to the Little report, this vital network would carry estimated one-time costs of $300 billion, which would take more than 12 years to recoup at $23 billion per year. So I’m left with this conclusions: Before the telephone industry spends $300 billion wiring fiber-to-the-home, it wants everyone to know just how much good fiber optics will do. In exchange for the ensuing social benefits, they’d like to lobby to use the network to sell movies and whatever other information they can sell. “All the graphics fit for fiber!”

The Little study is a powerful statement in favor of electronic communication. But if the study is perceived as a thinly disguised phone-company lobbying effort, it will be easily dismissed. People on the other side of the fence (like the newspaper and cable-television lobbies) will commission their own studies–and they’ll be suspect too.

We’ve been hearing about fiber optics for nearly a decade. Do we have to endure another decade of talk? Let’s hope the Department of Transportation can produce an objective study that shows big business how to improve productivity with increased use of telecommunications. And then, let’s get wired!

 

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