Infrastructure remains a compelling long term investment theme. As the emerging world's population continues to grow, new roads, bridges, sewers and electrical transmission lines will need to be built in order to provide these people with various necessities. Funds like the Macquarie Global Infrastructure (NYSE:MGU) have become popular ways to play this trend.

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In America, it's more about repair. Years of neglect has left much of the nation's vital infrastructure crumbling. One ignored sector, communication, has recently garnered much attention from the policymakers and the public. This widespread broadband and wireless communications build-out across the globe could be one of the more interesting sub-themes within infrastructure for investors.

A National Plan
In his State of the Union address, President Obama pledged to make wireless high-speed internet, or broadband, available to 98% of Americans within five years as a way to accelerate economic growth and spur job creation. Currently, the United States ranks 25th in the world in terms of broadband penetration, with only 50% of homes having access to high-speed internet. His overall broadband plan was recently outlined in the current budget proposal and contains three parts. The first of which will cost $5 billion to improve and build-out new mobile broadband networks in rural areas across the United States. Obama also proposed spending $10.7 billion on a separate, new mobile broadband network for security and emergency workers. Finally, $3 billion for would go towards government sponsored research on new wireless technologies.

This is in addition to the $4.7 billion given to the Commerce Department and the $2.5 billion allocated to the Department of Agriculture in 2009, for grants or loans to improve high-speed internet availability. This spending for broadband improvements, according to industry group Connected Nation, will have dramatic and direct effects on the economy. For every 7% increase in penetration, nearly 2.4 million jobs are created and the economy receives $134 billion in direct impact. In order to pay for this next round of broadband stimulus, airwaves surrendered by television broadcasters will be auctioned off for $27.8 billion to buyers such as AT&T (NYSE:T). The current plan would still have about $9.6 billion available for reducing the federal deficit.

The Global Picture
Globally, similar developments are occurring. Australia recently unveiled its plans for a $43 billion National Broadband Network (NBN) that will reach 90% of its population at a speed of 100 megabits a second. In South Korea, after a 10-year broadband binge, nearly 94% of the population has access to high-speed internet, with speeds nearly 75% faster than the United States.

Betting on Broadband
While the U.S. plan does face Republican headwinds, globally there is a direct need for improved communications networks. Any increased worldwide government spending on improving communication infrastructure will benefit both companies and investors alike. Portfolios can gain generalized exposure through the iShares S&P Global Telecommunications (NYSE:IXP). The fund tracks 44 different global communications firms including Telefonica (NYSE:TEF) and MetroPCS (NYSE:PCS). For those wanting to participate in the build-out, there are choices as well.

Both the iShares S&P North America Tech-Multimedia Network ETF (NYSE:IGN) and the PowerShares Dynamic Networking (NYSE:PXQ) allow investors to play the vast amount of routers, switching and data networking equipment that will be needed for the build-out. The two funds have rallied over the last year on the back of increase corporate IT spending as well.

Although Corning (NYSE:GLW) has branched out into many different avenues over the years, it still remains the leader in fiber optics. Its cables and optical fibers will be in great demand communications networks are augmented worldwide. Along with Corning, American Tower (NYSE:AMT) also represents one of the best ways to play this expansion.

Bottom Line
As nations around the globe continue to focus their attentions towards repairing or building out their infrastructure, the telecommunications subsector will also benefit. Plans from the U.S. government, along with those in other developed and emerging nations highlight this growing trend. Investors with long enough timelines may want to consider adding funds like the Broadband HOLDRs (NYSE:BDH) to play the build-out.

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Tickers in this Article: MGU, T, IXP, TEF, PCS, IGN, PXQ, GLW, AMT, BDH

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