As in the case of indirect costs, we do not attempt to quantify these indirect benefits. There is little doubt, however, that competition in the telecommunications network industry has stimulated economic growth in those countries in which it has been introduced. The indirect macroeconomic benefits alone are a significant factor causing countries around the world to consider liberalization of telecommunications monopolies.
5.6
TECHNOLOGICAL DEVELOPMENT AND THE LONGER TERM
In developing a methodology for this study we have made a distinction between short to medium term considerations and very long run considerations. For this purpose short to medium term refers to the period of time during which the technology of provision of telecommunications and cable television networks is broadly in line with that being deployed today, and in which most of the services demanded by consumers of communications network services are those for which a quantitative demand forecast can now be made. In our judgement this period will last at least until the end of this century, and possibly some years beyond. During this short to medium term, it is possible to obtain reasonably comprehensive quantitative data on costs and revenues.
In the longer term radical changes in the technology of telecommunications networks may take place, and demand may arise for presently unforeseen services. An example of the former might be the deployment of broadband two-way networks based on optical transmission and switching and of the latter may be a demand for high bandwidth interactive services in the home. To address these longer term possibilities we cannot apply the quantitative techniques which will be used in the analysis of earlier years, since reliable cost and demand data are not available. Instead, we will take a qualitative approach.
At first sight it may seem inappropriate to base the quantitative analysis on current technology and demand patterns, when the technology changes which might affect this industry in the longer run are potentially so radical. However we have found that these longer run considerations do not affect substantially the economic analysis we are undertaking. There are two reasons for this:
1.
In accordance with standard economic evaluation methodology, all cost and benefit flows are discounted back to a base year (1988) using a reasonable discount rate (6% per annum, real). The effect on today's decision of any event more than 15 or 20 years in the future is therefore relatively minor. Even if, for example, technological trends would dictate the construction of a totally new infrastructure 20 years from now, it is still worthwhile investing now in the optimal network for meeting demand between now and then.
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