Newsletters

July 2011 Bandwidth – The (Rural) Digital Divide, Action Plans, and Remembering a Friend

The State of the Divide in 2011

by Doug Adams
If you haven’t moved for a job, you know someone who has. More than a decade into our broadband revolution, the knowledge economy, and e-everything, it’s a bit discouraging to find that, even today, geography can still dictate individual or organizational potential for success. Still, in 2011, the digital divide limits job and opportunities, either at an organizational or an individual/entrepreneurial level, in rural areas.
Of course the digital divide is nothing new – but lately it seems that the class warfare in the haves and have-nots has shifted from an economic divide to a geographic one. With major investments being made across the globe to increase capacity and deliver broadband to the under and un-served (most notably with investments in Australia and the United States), there are still some that would have you believe that investing in broadband just isn’t worth it for some.
The idealist in me immediately wants to refute this as ridiculous, short-sighted thinking! How could anyone not know the benefits of broadband including the economic and social benefits that accompany more robust Internet connectivity? Don’t these people realize that to survive and thrive in the knowledge economy, broadband is the key enabler?  Haven’t they seen the “build it and they will come” movie where people flock to Iowa in ‘Field of Dreams?’ Hasn’t the availability of broadband and the rise of every broadband enabled device taught us anything about the potential of broadband? Are these people naïve?  It may even be a legal requirement as soon the only way my grandmother can access services will be online… does she need to move?
Then I take a step back from my knee-jerk reaction and let the pragmatist in me take over.  As a broadband economist, I along with my firm, SNG, dissect where the demand for broadband exists – and where investment will have the deepest, most long-lasting impacts.  We do this through a step-by-step methodology that includes direct stakeholder feedback.
Needs vary. It is nice to aspire to ultra-fast, fiber to the home for everyone… but is that practical? Ideally, we would see a world where everyone could innovate with no barriers. Pragmatically, many would just watch higher definition online feeds of Sponge Bob.
Do businesses need ultra-speed Internet? I would argue they will eventually, whether they realize it or not. But pragmatically, we need to – at the very least – get anchor institutions equipped with middle and last mile access so for today’s needs as well as tomorrow’s, communities are better equipped to expand into the world of fiber and ultra-speed broadband.  Schools and hospitals MUST have ultra-broadband to prepare students for life… and to save lives with telemedicine.
It is inevitable that the combination of computing power and demand for new and better applications and new approaches such as cloud computing will increase the need for more speed by the majority of users over time – no matter whether they are in New York, NY or in a cornfield in Iowa.
For the Statisticians… Productivity by the numbers
SNG’s research shows that organizations are more efficient the greater the Internet speed they have available to them. Speed matters, regardless of how it is delivered. Move to the greatest access available, ideally fiber.  Friends don’t let friends use “basic broadband.”
  • For Fiber users the positive ROI on e-solutions for improving productivity is 8.9% higher than Cable and 14.2% higher than DSL.
  • For Fiber users the importance of broadband for adopting new operational processes is 8.1% higher than Cable and 10.3% higher than DSL.
  • For Fiber users the importance of broadband for improving staff skills is 14.3% higher than Cable and 14.8% higher than DSL.

Creating an Action Plan for Broadband Utilization

With all of the hub-bub around broadband build out, it is important not to forget ab out utilization… and how you drive meaningful utilization in your community.
A great compliment to our recently announced Market Demand Snapshot is an Action Plan for Broadband Utilization.  Designed to spur economic development and job creation, and incorporating feedback from stakeholder workshops, SNG can provide you with will provide the tactics, methods and tools needed to drive broadband adoption and meaningful use.
As we continuously preach, broadband availability alone is not enough to realize its social and economic benefits.  An understanding of how to effectively use of broadband for commerce, citizen services and the positioning of rural counties as attractive areas for 21st century business and living will play a critical factor in their long-term success of your broadband investment and  your ability to impact the lives of the citizens and businesses already located in the regions.
SNG can help your region with effective strategic planning for impactful economic development with a sound, three-step approach:
  1. Identifying and rallying the key stakeholders that need to be actively engaged in the economic development through broadband adoption process via the application of broadband best practices;
  2. Laying the foundations for an actionable strategic plan that will enhance broadband adoption, meaningful use and job creation across identified verticals of interest, e.g. residences, schools, businesses, libraries, healthcare facilities, public safety and government;
  3. Driving efficiencies into the community through the adoption of digital purposes and broadband enabled applications that increase quality of life, the growth of economic and employment opportunities, and spurring commercial investment locally.
If you are interested in learning more about how this structured approach can drive demand, adoption and meaningful use to advance your region’s ability to compete globally, attract investment, realize efficiencies, and create jobs, contact Michael Curri.

Remembering a Friend and Colleague

you visited www.sngroup.com lately? If you have, you may have noticed that the home page has undergone a minor facelift, designed to make navigating our site easier than

Our friend and colleague Charles Berry passed away at this past Friday. He was 42 – much too young. We loved him dearly.
His life was filled with adventure and achievement, love and laughter. Charles spent every waking hour living life to its fullest – and his ambition and love of life often drove him to sleep deprivation. During his time with us, Charles crammed as much life into every day as anyone you could ever meet..
Charles used to say with pride that he and his family could pack and be on their way to their next adventure in a few hours. He and his childhood best friend and wife Dawn saw so much of this world as work and thirst for cultural diversity and life experiences saw them set down not only coast-to-coast in the United States, but in Japan, India, and France. He dearly loved the Cannes in the French Riviera and the Georgia Coast and wanted us all to experience them with him. Other than his childhood home of St. Louis, the past 4 years in Cleveland were the longest Charles and Dawn had stayed in one place.  “Too much to see and do,” Charles used to say with his infectious smile.
Charles was a brilliant man, evidenced by his numerous career achievements, which culminated in the formation of his own venture with a small group of partners – a broadband consulting firm named Gigabit Squared, which now serves clients all over the globe. It is ironic and sad that Charles’ untimely death came at a point in his life when he was going to get “back to seeing the world” and travelling. The past few months Charles was happier than ever – ready to take on and conquer challenges all over the globe as the company he had help build was ready to take off.
But Charles’ brilliance was most evident when he shared a dinner with a friend – and discussed politics, religion, business, or even the intricacies of the NBA, NFL, or Soccer. Charles was quite competitive and loved a challenge – so he was drawn to friends and colleagues who he could banter back and forth with for hours. Always good natured, always with a laugh and an excited smile, Charles would – as many of his friends called it – ‘hold us hostage,’ saying ‘just five more minutes’ so that we could continue the debate, discussion, and laughs. Time with Charles was always challenging and exhilarating – he was going to push you and laugh with you and make sure that he challenged any of your preconceived beliefs. He loved playing the Devil’s Advocate because he could argue either side of a position brilliantly, and he loved to challenge the minds of the people he cared about.
While Charles was fiercely proud of his nomadic, go anywhere lifestyle with no geographic roots – the roots he did put down were with the people in his life. Fiercely loyal, if Charles counted you a friend, you were a friend for life, no matter the distance. He spent so much time with the people in his life every day that often his workday ended up being 8 p.m. to 5 a.m.
He leaves behind his wife, childhood best friend Dawn, and daughter Magda, 11, and son Nigel, 9. While our relationship with Charles was mostly away from his family, there was no doubt to any of us that they were always close to him. And when we saw Charles with his wife and children, his smile grew even bigger and the twinkle in his eye was less mischievous nature and much more reflecting pure love and admiration for the family that he adored. His children will always know that Daddy loved them more than anything in this world.
We are all still in shock with the untimely passing of our dear friend. Not a day will go by without some reflection, a memory of laughter with this big hearted man. We will miss him dearly, but know what he would tell us. That it is our job to pick up and keep going. To let his life serve as a reminder to pack every bit of life, love, and laugher into every day. There was really no one else like Charles. As his friends, it will be our charter to honor him by challenging our minds, taking time for friends and family, and remember, as he used to tell us, “not take all of this so seriously.”

June 2011 Bandwidth – The Lighter Side of Utilization and e-Solutions Benchmarking

Tweeting in the Dark… Utilization is (Still) the Key

by Doug Adams
We’ve been talking for months in Bandwidth about Awareness not equaling Adoption… and along with it adoption not begetting Utilization. No matter who might ask you to take a leap of faith, they are not the same, and it is our job to push the boulder up the hill and go from awareness to adoption to usage.

Put another way, just because you have broadband does not mean people will use it… and just because people are using broadband does not mean they are fully realizing the socio-economic benefits:

Typically, and for good reason, we are talking about driving business enablers and e-solutions as the utilization the key to delivering benefits and impacts. And while that remains what we focus on at SNG, let’s take a look at the “lighter side” of the Internet to illustrate just how meaningful utilization can be. And we’re not sure you can get much lighter than social networking.

Recent findings show that in the United States, Twitter’s awareness (we’ll use this as a parallel to coverage), adoption, and utilization are very different.

  • Awareness:  92%  (this even sounds low)
  • Adoption:   13% have signed up for account
  • Utilization: Only 8% have EVER used it – even a ‘hello’ tweet counts

Looking at what might be considered its big brother, or a brother on steroids, we see that 42% of online Americans last year and a projected 57% this year are actively using Facebook.

I can’t use the classic ‘first to market’ explanation to describe why utilization is higher for one than the other. Otherwise, we’d all be on Friendster or My Space.

For Facebook, adoption is awfully close to usage, with a whopping 70% of users logging on daily.  They are closing the gap between adoption and utilization – remember it is our position that adoption is pointless without utilization – by being, in social media circles, compelling.

But what makes something ‘compelling’ or what drives utilization? In Facebook’s case I know that I, for one, feel like if I don’t login that I will miss something.  I don’t feel that way with Twitter, and apparently I am not alone.

So back to the world of economic needs and improving quality of life – we’re investing in broadband and e-solutions to drive economic efficiencies and create growth opportunities. These include reaching new markets, developing new business models, creating new relationships with partners and clients.

It is our job to make that feeling of ‘missing out’ a tangible, understandable reason to utilize e-solutions to drive prosperity and growth. Our goal is to ‘personalize’ the return on investment to individual businesses, organizations and households.

SNG’s research, including the DEi scorecard does just that, showing your local businesses what they need to do and the applications they should adapt in order to realize cost efficiencies and  increase revenues. This helps make sure that your region does not miss out… on its potential, and on opportunities.

 

e-Solutions Benchmarking (eSB) in Action

We’re often asked, specifically, “How does an eSB help our region make better decisions and guide investment? Below are a few examples of how an eSB has helped other regions…

Scenario 1: If fiber is going to be available to Professional and Technical Service firms in your region (i.e. county or economic development region) and the Executive’s focus (i.e. governor) is best practices in science and technology-based economic development – what services should e-Incubator staff promote in their awareness and outreach efforts to Professional and Technical Service firms?

Finding: The top e-solutions that Professional and Technical Service firms plan to use and need help with when on DSL are:

  • Delivering Services and Content Online
  • Social Networking
  • Website for Organization
  • Online Advertising and Promotion
  • Rich Media and Content Creation

The difference in utilization between firms that are on DSL versus Fiber is significant across all seventeen (17) key e-solutions. If Professional and Technical Service firms are to be competitive, they will need to understand where they aren’t competitive and provide support and training to quickly and efficiently bridge those gaps.

The next question is to identify the most effective means of getting the required information and skill development to these firms.

Findings: Self-directed online learning is the preferred method of information and skill development for professional and technical service businesses.

The top three preferred methods are online reference materials, direct research with vendors, and live webinars with experts. The two least preferred methods are formal classroom and formal online courses.

Scenario 2: There is pressure to improve the productivity and quality of public services, while reducing costs. Senior planning staff have been directed to identify areas where public investments in broadband can be used to further these goals.

Findings: Two areas exhibit slow adoption of modern and cost effective delivery methods:

Telehealth services – Only 6.7 of health service providers currently provide telehealth services to patients in their home (with 3.2% adoption in progress and 7.1% planning to adopt). This is in spite of the finding that an average of over 70% of households are currently, planning or willing to explore telehealth services.  Increased use of telehealth services have the potential to improve access, while reducing costs and demand in such areas as emergency room visits.

Community services, counselling – Only 13.5% of service providers currently provide remote counselling services through such means as live video. Another 3.5% are in the process of adoption and 9.3% are planning to adopt. This level of adoption is well below levels in mental health centers where tele-psychiatry is a proven and leading edge adopter of tele-health services (respective adoption levels are: 26.5% currently use; 5.9% in progress; 14.7 planning).

 

 

 

Quick Bytes

New Look
Have you visited www.sngroup.com lately? If you have, you may have noticed that the home page has undergone a minor facelift, designed to make navigating our site easier than ever.

e-NC and SNG Study Reveals Types of Home-Based Businesses
Data collected by SNG in North Carolina in 2010 showed that a third (32%) of households had some type of existing home-based business, with another 12% saying that they would start a home-based business within the next year.

This of course points to the fact that bringing robust Internet to the home, affordably, is not just about enabling leisure activity.  In fact, regional economic development depends on broadband to the home.

The top home-based businesses by industry sector (NAICS) are: 

  • Professional and Technical Services – 24%
  • Arts, Entertainment and Recreation – 10%
  • Retail Trade – 9%
  • Real Estate – 8%
  • Agriculture – 7%
  • Information – 5%
  • Construction – 5%

Click on chart for a larger version.

So if you’re trying to retain and attract high-paying jobs to your region, ensure that you have a good broadband network and focus on marketing to professionals who can work from home.

 

Study Reveals Broadband Essential for Economic Development in Europe
According to a study published in May by the McKinsey Global Institute (Internet Matters), Europeans need to be connected if they are to enjoy the significant lifestyle and economic advantages. Not new ground, but what is interesting are some of the findings, directly connecting job creation with broadband, including:

  • The Internet generated 21 per cent of GDP growth in the last 5 years in mature countries
  • 2.6 jobs are created for every job lost due to the transition to the online economy
  • Of the individuals and SMEs who are heavy users of web technology, they are growing and exporting twice as much as others.

Read more about the study by clicking here.

 


May 2011 “Bandwidth” – Utilization, News from NC and Norway, and new SNG Offerings

Making the Most of Your Broadband Investment

by Michael Curri
“We finally have broadband coverage, so are we done?”

Broadband is critical infrastructure, a means to an end – not the finish line. Neither broadband coverage alone nor adoption is sufficient to achieve your goals and outcomes. Only broadband utilization leads to desired economic and social benefits. What are they? That depends on your priorities…

  • Do you want local businesses to be more productive and be able to compete in the global economy? Do you want to keep local jobs?
  • Do you want youth to have the opportunity to have high paying local employment?
  • Do you want your region to be more resilient to shocks and enhance quality of life?
  • Do you want citizens who are more informed and invested in the community?

Priorities differ across regions. But without significant utilization, it is unlikely desired outcomes will be achieved. Drivers and barriers must be identified, understood, and managed. Broadband coverage does not necessarily beget adoption… and adoption does not automatically beget effective utilization.

Leveraging broadband is at the heart of modern economic development. Whether the objective is retaining existing businesses and jobs, business growth, or improving the quality of jobs – e-solutions are critical enablers to drive participation in the digital economy. To realize the benefits of broadband – availability is important, but utilization is critical.

Most regions require planning, strategies, and the promotion of e-solutions utilization to leverage broadband infrastructure. This is a transition and a restructuring process critical to ensure your region can thrive in the global economy while delivering a high quality of life.

By uncovering existing barriers to e-solutions utilization, communities and regions can see whether they are positioned to compete in the digital economy. With these insights, it is possible to understand which e-solutions will have the most immediate and significant impact on the local economy. These insights are critical inputs to where your investment should be directed in bridging gaps and accelerating utilization. Let SNG work with you to develop your path forward along the broadband lifecycle.

 

A Broadband Champion

by Thibaud Chatel
It is not that often I’ve met someone that is so impressive I’m compelled to tell the world about it. This is the story of just such a person.

Last Fall, SNG partnered with the Norwegian University of Science and Technology (NTNU) of Trondheim, providing support to an e-Solutions Benchmarking project on the hospitality sector of the Hardanger Fjord area in Norway, an area extremely dependent on tourism.

Amongst the respondents was the Hotel Ullensvang, a 300 bed hotel located just between mountain and sea.  The hotel’s use of broadband earned them a lofty score of 9 on a 10 point scale on SNG’s Digital Economy index (DEi) for broadband utilization.

In speaking with Geir Midtun, the IT manager of the hotel (yes they have one!), it became clear to me that they understand the very essence of what broadband can be: a powerful means for economic development.

“We are located quite remote from most of our clients and most of our suppliers. We have a two hours drive by car to the nearest railway station and a three hours drive to the nearest airport. Using the internet is our way of getting closer to our clients and suppliers, on a daily basis, and broadband makes it fast enough to be useful. Broadband is our connection to the rest of the world. We consider broadband one of the primary reasons we are able to do business the way that we do. A large hotel in a small rural village, remote and “exotic,” but still connected to the world.”

And so for example, broadband enables the hotel to host international seminars on a regular basis, in a place where you can now relax and do business without limits.

But how do they get there? Since broadband was introduced in the area in 2004, it has been an ongoing process of improvement, strongly supported by the hotel owners and managers. Every step they took was based on the remote location of the hotel and that they needed to be connected in order to thrive. As Geir explains, they can make a long, very long list of benefits and cost saving from using broadband and e-solutions.

“Computer systems, booking systems, TV-systems, ventilation and air condition systems etc. can be checked and maintained/serviced by ‘remote control.’ A few years ago, service personnel from Bergen had to make a six hours drive (back and forth) to do a job that perhaps took 15 minutes. Our credit card terminals now use broadband instead of the telephone lines. This enables full integration with the booking- and accounting software. Our sales staff can connect to our server when they are out travelling, to check availability and make bookings online from wherever they are, worldwide. Our accounting services are now taken care of by a company in Stavanger, 170 kilometers away. Thanks to broadband we can stay online with them all day long, without having to think about extra costs.”

Add to the list of benefits broadband brings are:

  • Quality of service for hotel patrons
  • Online marketing capabilities via Facebook, YouTube, and 360° webcams
  • Teleworking availability for patrons
  • Online training for staff
  • The ability to tele-interview prospective staff additions
  • Increased quality of life for staff as they are able to communicate with their families and watch homeland television

The Ullensvang hotel has 50 employees and is thriving in a remote area of Norway because of what they are doing with their broadband. Asked what the Ullensvang Hotel would be like without broadband, the hotel’s managing director, Hans Edmund, Utne explains that the Internet today are just as important to his business as roads were to his predecessor 100 years ago.  But this requires champions like Geir Midtun who understood how technology enabled by broadband could enhance and transform the hotel’s business.

 

Public Versus Private Investment in Broadband

By John DeRidder
There is a tension between under-investment without public investment (the “externalities” issue) and public investment “crowding out” private investment (the “level playing field” issue). Taking the latter approach puts national broadband plans and state economic development at risk.

An example of this playing-out is when on April 4th the State Legislature of North Carolina passed Bill H129, subsequently ratified by the State’s Senate, to “level the playing field” across public and private operators of fast broadband networks. In the same month Tennessee shelved legislation that would have allowed its local power utility and state-of-the-art broadband provider EPB to expand its service beyond its current operational area.

The NC curbs on public investment are intended to prevent unfair competition from “predatory” local governments by loading the prices of community networks with a commercial rate of return and the taxes and charges that would apply to a private operator. This “leveling of the playing field” argument sounds reasonable, but it ignores the main reason for public enterprise.

The fundamental reason for public enterprise is that it can make investments taking into account benefits that will not appear on its own books. Put another way, public enterprise can undertake unprofitable investment where there are community benefits (what economists call “positive externalities”) that would make the investment economically and socially desirable.

Few would have a problem with public broadband investment in regional areas where private investment is unprofitable. But, what about urban areas where private broadband networks may fail to recognize local demand? Advocates of public investment point to the Greenlight Community Network in Wilson, NC, which provides “up to” 100Mbps while the local cable company, Time Warner, offers Wilson residents “blazing speeds” of just 15Mbps on its Road Runner plan. H129 blocks the development of new community networks providing faster services than existing operators are willing to offer.

Why is this so? One important reason for restricting speeds is to protect margins on legacy data products sold to business. Incumbents prefer to sell existing data services than provide broadband services where they cannot differentiate so easily between business and residential customers. Contrast that with EPB’s network which is scaled to support 1Gbit/s to anyone – business or residential customer – that needs such speed.

There are no easy answers.

In other countries, an appropriate remedy is service competition enabled by forcing existing operators (not just the new public operators stipulated in H129) to open their networks (i.e. provide wholesale services). Currently, the FCC does not mandate open access for new fiber access networks, let alone existing broadband networks.

For new investments in “under-served” areas, a possible remedy is to provide a capital grant or subsidy to a private operator to make an investment profitable. This could be done through a public tender process. Conditions should also be attached to make the chosen network operator provide open access to enable competing services to be offered over the same network.

A practical and globally tested alternative is public investment in community networks such as Greenlight and EPB.

Our preliminary view is that while the focus of community networks should be “un-served” or “under-served” areas, there is no need to confine them outside city limits. Urban areas can justify some duplication and investments in existing networks are sunk and partly depreciated so they can compete on cost. Without un-fettered investment in community broadband networks, the economic and social benefits for all regions will not be realized.

 

Quick Bytes

Jumpstart your Broadband Initiatives with New Offerings from SNG
SNG’s Market Demand Snapshot is a quick way to get initial “demand-side” information. With a project that runs from 1-3 weeks, start-to-finish, SNG can help obtain initial “topline” feedback among your audiences – be it an industry, specific geography, etc. This quantitative study is not meant to be an all-encompassing study – but rather good, solid, directional research to help guide your initial investment decisions. Contact Doug Adams for more information on how our Market Demand Snapshot provides research for the right decisions for your region.

Get to Work with SNG’s Strategic Planning Workshop
Getting everyone in your region ‘on the same page’ and focused on critical success factors like supporting demand, leveraging broadband as an economic development engine, and developing e-solutions can be an overwhelming task. That shouldn’t mean we skip over the step… it is possible, and SNG can help.

SNG leads workshops across the globe – a strategic planning process bringing key stakeholder groups together, uncovering needs and goals, and arriving at a shared agreement on how to move forward. Contact Michael Curri as we can get these workshops going in short order, and affordably, allowing you to get on track towards a successful broadband initiative.

Dallas Replay
Conference sessions from last month’s Broadband Properties Summit in Dallas are now available online. Click for video library.

Our own Michael Curri participated in “What is Economic Development?” while Jane Patterson (our partner with e-NC) was a key contributor in the “What Federal, State, and Local Government and the Private Sector Are Doing and Planning” session.

Congratulations to our very own Thibaud Chatel and his new bride Audrey as they were wed this past weekend. Pictured are Thibaud (left) and Michael Curri (right).

Thibaud was overheard to be saying… “If we organize everyone over there, we can get step one of the Broadband Lifecycle going in no time.”

 


April 2011: Broadband Properties Conference, Australia Update, and AT&T’s Usage Tax

Dallas Roundup (Thoughts from the 2011 Broadband Properties Summit)

by Michael Curri

We delayed April’s newsletter (unless you want to call this the 34th of April) to make sure we could include a recap of the Broadband Properties Summit in Dallas last week.

Representatives from the majority of States gathered for Thursday’s program dedicated to: “Broadband and Economic Development: A Hard Look at Job Creation from all Angles.”

The nature of broadband stimulus dollars was that they went mostly to “un” and “under” served geographies. A very small portion of the stimulus funds had anything to do with actual broadband use – and in those cases, the programs were designed around basic training.

So the product of the broadband stimulus program focused on spreading the wealth to achieve availability, with the result that most States are using coverage as their end game. Coverage does not necessarily beget adoption… and adoption does not beget utilization.

So we all believe that broadband drives job creation, opportunities, etc. But we cannot necessarily assume that “build it and they will come” is a sound strategy. In fact, I think most of us would agree that for many communities and regions it isn’t. So why is it that we leave that as the cornerstone to our economic development through broadband strategy?

Building broadband networks is a necessary, but not sufficient condition for economic impacts. It is the act of utilization – of leveraging broadband that is at the heart of modern economic development. Whether the objective is retaining existing businesses and jobs, business growth, or improving the quality of jobs – e-solutions and online processes are the critical enablers that allow a community or region to successfully participate in the digital economy. Availability is important, but utilization is critical.

In Dallas I heard numerous times that as broadband coverage is now increasing with ARRA projects, the question that often now gets asked is: “What is the broadband problem?”

This question should be re-framed. In fact, legislators, economic development officers and those working with broadband agencies should respond with the following questions:

  • Do you want local businesses to be more productive and be able to compete in the global economy? Do you want to keep local jobs?
  • Do you want youth to have the opportunity to have high paying local employment?
  • Do you want your region to be more resilient to shocks and enhance quality of life?

The answer is inevitably yes, but without broadband utilization such desired outcomes are unlikely.

While some regions and communities have the organic capacity to take advantage of broadband, most require planning, strategies, and the promotion and utilization of e-solutions to leverage broadband infrastructure. This is a transition and a restructuring process. It is needed – in fact critical – to ensure that modern regions can compete in the global economy.

Economic development and broadband agencies, as well as policy makers need the data, strategy, actionable economic development plan, constituent and stakeholder buy-in, and ongoing monitoring and analysis needed to put communities and regions in a position to compete in the global economy. By uncovering existing barriers to current utilization of e-solutions by households, businesses and civic organizations, it is possible to develop a roadmap to accelerate and optimize measurable and sustainable socio-economic gains at a regional level.

Australia Plays a Dangerous (Waiting) Game

by Michael Curri

A month and a few conferences later, I wanted to make sure I closed the loop on the phenomenal Australian Telecommunications Users Group Conference in Sydney. I briefly reported from on-site in March’s newsletter, but to expand, this is an exciting time for Australia with the commitment to National Broadband Network (NBN) – and with it, the groundwork for future innovation and success.

By future-proofing with fiber, the NBN is all but ensuring it should be able to accommodate utilization needs (current and future) – whether the architects of the NBN are ready to address the “demand side” of broadband or not. Regardless, the unprecedented investment using fiber as the backbone of the NBN should prevent Australia from facing some of the same unseemly challenges that US providers face today – limiting access which limits utilization by placing caps and additional charges for “too much” use (See following story).

Meanwhile on the “supply side,” the fact remains that the NBN build will take 8 years – and fiber to the premises will not be available to all (fixed wireless and satellite will fill in the gaps). Unfortunately, too many are focused on when their part of the NBN will be finished as opposed to what they can do in the meantime to increase their productivity and competitiveness. Australians cannot afford to wait 8 years to innovate. They need jobs and opportunities today – and the bandwidth they have already can and should be utilized. The question facing Australia today is an important one – how do we use and maximize the bandwidth provided today?

Despite the hype, Australians currently do have some reasonable broadband; at least by US standards. It is what communities, businesses and individuals do with the current broadband that will shape the near future of Australia’s economic prospects.

But again, communities cannot just take a “laissez-faire” approach – whether waiting on NBN or if they are the lucky early recipients. As a leader of these initiatives, it is not enough to just build the network and get out of the way. Demonstrate how businesses can be more effective, provide each with a roadmap for efficiencies and cost savings, and lead your region to success today… not in 8 years.

That’s One Small Step for AT&T, One Giant Blow to Utilization

by Doug Adams

I guess it was only a matter of time before one or more telcos reacted to the horrible trend facing America and countries all across the globe: actual broadband utilization. AT&T this week announced that it will punish these horrible broadband thieves by capping data and charging for DSL users who exceed 150 GB per month.

As I remove my tongue from being implanted in my cheek, I will acknowledge that this (of course) is free enterprise at work – why shouldn’t “heavy users” of bandwidth have to pay more? Why should we continue with a broadband business model that results in under-investment by the private sector?

Today, this is not a huge issue as only a small percentage of broadband users could even come up with a way to use 150 GB a month… but is it a harbinger for things to come? Are we establishing ‘ground rules’ that say – of course we want you to be more efficient, innovate, and drive our economy forward… but for a price.

A big challenge for the telecom industry is finding a way to provide incentives to carry capacity-hogging services. Carriers have to augment capacity to cope with the rapid growth in data, but get no extra revenue for that.

Is the AT&T cap on data a cautionary tale – an indication of what to expect from other telcos? As more and more applications and e-solutions drive broadband utilization (a good thing as it is utilization that drives economic and social impacts) do we counter with extra charges? And let’s clarify who “we” is – this case it is telcos, who have every right to raise prices and charge for extra use. It is that charge that, hopefully, will continue to grow network build out.

But let’s face it – we are not raising prices in a vacuum. With a desire to transform from a manufacturing to knowledge economy – which requires greater, not less utilization… is now the right time to do this? Even if it impacts no one, my marketing training tells me that the PR this generates will dampen utilization. It will scare some people from using some applications considered bandwidth hogs. And in 2011, I’m inclined to push back on anything that will limit Internet use.

Count me in the camp that sees the move as a potential hindrance to the growth of the Internet and online innovation. Alongside me is U.S. Representative Ed Markey who criticized AT&T for undermining national broadband goals and making it more difficult for new adopters to access high-speed Internet.


March 2011 Bandwidth – Avoid Being a “No Place,” Measuring Value, and ATUG

         

Don’t Let Your Region be a “No Place”

by Doug Adams
Without compelling reasons, applications, and e-solutions for your constituents to utilize your broadband network – the hopes you have for its transformational power are sure to come up short.

Just recently in the United Kingdom, the community of Cornwall showed that utilization of broadband services is not achieved simply by the rollout of a broadband infrastructure. It has to be accompanied with awareness initiatives and e-solutions that drive utilization. By providing companies with concrete solutions and advice, companies were made aware of the benefits of broadband and quickly utilized the network.

Indianapolis Mayor William Hudnut (1976-1992)

Debunking the Fable of “Build it and They Will Come.”
This is the story of one political leader whose vision exceeded even the wildest expectations of his constituents.  It’s the story that illustrates the difference between idealism and realism, the difference between a “pipe dream” and reachable goals.  What separates the ineffective dreamer and the transformational leader?  A strategy that goes beyond initial investment.

No matter left, right, or center… political initiatives often start and end with the initial investment.  Regulations can often drive adoption of the investment – and often market forces drive utilization.  But what happens when utilization needs a push? Even the staunchest laissez faire politician would have to admit that… sometimes… initial investment is just not enough.

Back to our story and mayor of a mid-sized city famous for being the largest “land locked” city in its country and an unflattering nickname of “no place” that reflected a lack of almost anything distinguishable.

This mayor had a vision – a vision that his city would become a destination for businesses, tourists, and events. But without an infrastructure… how could he pull this off? Getting approval for an investment in a 60,000 seat domed stadium – to the outsider – may have seemed like his greatest hurdle.

Indianapolis' RCA Dome

None of this happened in a vacuum. Beyond the initial stadium investment, the mayor and his staff needed to aggressively bring events, teams, hotel chains, etc. to the City. They had to be creative in leading the development of downtown to transform a “no place” to a prosperous “some place.”  And the mayor of this town retired after 16 years in office, the most beloved leader the City has ever – or dare I say it – will ever have.

Now since the transformation of this City, many have followed suit… but only partially.  Stadiums have gone up across North America to attract professional sports teams – some successfully attracting teams.  But that is where it has stopped.  You see, investment without an all-encompassing strategy can work… but only to a point.

So – as community leaders investing in broadband initiatives today – can we really learn anything from a stadium build and accompanying transformation?  We better.

Without reasons, applications, and e-solutions for our new broadband network – all we have is an empty stadium.  It may attract some patrons – but it will never realize its transformational power. Turn to SNG – we can help you develop your own legacy of making your region a “some place.”

SNG has been helping communities and its leaders for more than 15 years ensure that broadband investments receive their maximum economic impact.  By uncovering gaps, mapping demand, and helping communities develop innovative e-solutions and driving awareness and utilization, SNG helps make sure your network investment has transformational (and measurable) impacts.

Read more about Indianapolis’ Mayor William Hudnut.

Uncovering the Value of Rural Broadband    

by Derek Murphy, VP, Product Delivery
One of the ongoing challenges for any region is to understand the actual benefits and impacts of public investments in broadband policy and implementation. Understanding and demonstrating impacts is critical as you face mixed and conflicting expectations and scepticism among both the general public and decision makers. One of the most important areas for assessing impacts is in rural areas where the vast majority of “unserved” and “underserved” are located.

I recently came across a research paper published early last year by the Public Policy Institute of California (PPIC), titled “Does Broadband Boost Local Economic Development?” It underscores some of the major problems in understanding the rationale and evidence for investing in rural broadband.

While there is a lack of substantive research on the impacts of rural broadband, PPIC takes an important effort at understand the issue, and is a welcome (hopefully) first step in a concerted effort to understand and enhance the impacts of public investments in rural broadband. Nonetheless, the PPIC paper contains flawed analysis and conclusions. The PPIC’s conclusions understate the impacts of rural broadband investment, undervaluing the potential for leveraging rural broadband for local economic development.

Rural broadband impacts need to be assessed initially at the conceptual and policy level, requiring a framework to understand the range of possible and desired impacts broadband can deliver. The PPIC illustrates just what happens without a strong policy framework. The paper states its objective, “to assess whether policies to raise broadband availability will contribute, as hoped, to local economic development.” The misstep here is that “local economic development” is only defined as “economic growth” in jobs and income. This confusion of economic development with economic growth is a fundamental and frequent mistake in which a historical bias towards never-ending “growth” replaces a more thoughtful understanding of economic development as a sustainable economy that provides income security, a diversity of opportunities to local residents, and a source of external income for the region.

The problem of mixing the two distinct concepts and objectives of growth and development is exacerbated by the lack of analysis of economic challenges faced by most rural areas in North America. There is ample evidence of the long term decline (relative or absolute) of rural areas as these areas lose population due to deaths and outward migration. The policy issue is whether these rural areas can replace all or most of the population that they are losing as they struggle to attract “replacement population.”

The objectives of local economic development vary greatly by the specific circumstances of each rural area. Economic development will often mean something other than “growth.” Economic development can mean a healthy and stable economy that reflects the changing nature of the national and international economy. A core economic development strategy for rural areas is development of strong amenities and services. Consequently, the role of broadband and related services is recognized by the USDA as a key strategy for rural economic development.

SNG’s research shows that broadband strongly influences locational decisions by both businesses and households about whether to stay or where to move. Our research also shows that consumers consider the speed and reliability of their broadband in making these decisions.

The USDA tells us that rural communities need to develop their own distinct strategies based on the costs and benefits that they specifically can expect. High-level analysis of aggregate data is useful in suggesting issues that need to be explored, but it is inappropriate for assessing the possible or likely impacts of improved broadband.

A more constructive approach is to look at communities in similar circumstances and determine the comparative results of their decisions to invest or not invest in enhanced Internet connectivity and competence. This approach is more likely to identify the consequences of not investing in broadband.

Aggregate analysis also doesn’t identify impacts at the level of specific companies, households, or communities. Understanding impacts at the granular level is important in understanding what opportunities realistically exist and what are the barriers to becoming competitive and productive. As demonstrated by SNG’s ground breaking work in North Carolina, obtaining granular data allows data to be turned into actionable intelligence for specific communities and companies. Instead of research drawing questionable conclusions that disempowers people, companies and communities, data gathered at the local level allows for a self-assessment that leads to decisions and actions that are appropriate and realistic.

Another factor for rural broadband not measured recently (in the past 5 years) by the PPIC study was the potential increase in telecommuting or telework as a result of increased broadband availability. SNG’s research shows a strong and positive relationship between broadband availability and teleworking and home-based businesses. Our findings are based on direct surveys in 2010 to over 9,000 rural establishments and 2,350 rural households.

Policy analysts, decision-makers and economic development practitioners need to engage in a meaningful dialogue on the expectations and impacts of broadband investments in rural areas. While investing in broadband in the 1990’s and early 2000s may have been a bold investment in growth, increasingly broadband is becoming a necessary defensive investment, not necessarily an investment in growth. Reliable and competitive broadband allows citizens, businesses and communities the opportunity to remain “competitive” and viable. If leaders and planners can’t get beyond seeing broadband as a “growth strategy,” then broadband in rural areas will more often than not be seen as a failure.

Related readings:

Nonmetropolitan Outmigration Counties: Some Are Poor, Many Are Prosperous – David McGranahan, John Cromartie, and Timothy Wojan, USDA Economic Research Service, 2010.  http://www.ers.usda.gov/Publications/ERR107/ERR107.pdf

USDA Briefing Room – http://www.ers.usda.gov/Briefing/RuralDevelopment/RuralDevelopment.htm

 Does Broadband Boost Local Economic Development?, Jed Kolko, PPIC January 2010, http://www.ppic.org/content/pubs/report/R_110JKR.pdf

Getting Down to Business Down Under

by Michael Curri
After a 22 hour flight, I landed in Australia a few days ago to attend the Australian Telecommunications Users Group in Sydney. It has been an eventful few days as I appeared on the Australian Broadcasting Corporation regarding broadband’s importance to Australia and what it could mean to national productivity and competitiveness and met with Minister of Broadband, Communications and the Digital Economy, Stephen Conroy and spoke with the opposition party Member of Parliament Paul Fletcher who is focused on the National Broadband Network (NBN). Both believe in the NBN and want to better understand what the benefits will mean to Australian businesses, organizations, and households.  Let me digress here for a second… how great is it that Australia has a “Minister of Broadband, Communications and the Digital Economy?”

We’re at the very beginning of great potential through broadband for Australia.  I was asked to run a workshop for community leaders involved with the NBN. Some highlights from this half day session included important questions and insights:

  • It is important to have local examples of e-solutions and what they mean for local businesses and organizations.
  • Even though the NBN is being built, it will still take 8 + years to have 93% connected. What can we do to bridge the gap between today and then?
  • Jane Patterson talked about e-NC and its impact on North Carolina, as well as what broadband has done for rural businesses as they “compete globally, but live locally.”
  • There is a culture of use that needs to develop (e.g acceptance of tele-working).

A final observation before I get back to the conference… In general, broadband is seen as significant and valuable, but questions remain regarding how much should be spent in building the NBN and what is the optimal model. While this is an important question, it is important to focus on quantifying the benefits from the investment. If we can keep politics out of this and focus on what everyone believes – that broadband does create economic advancement – then this unprecedented initiative should have long and far-reaching impact in Australia.

Look for next month’s Bandwidth for a more thorough recap of the event.

 
 

February 2011: Digital Economy Analytics Platform, Norway, and Utilization

         

SNG Announces Industry’s First and Only Hands-On, Comparative Database

  

Digital Economy Analytics Platform from SNG enables SNG clients to compare regions and industries to uncover actionable information and insights. With this new solution from SNG, regional leaders can leverage the best practices from each region and industry across their territory.   

Digital Economy Analytics Platform puts all the data from SNG’s in-depth analysis reports at your fingertips in a secure Web-based tool, allowing you to run your own queries and reports. Identify where, how, and by who broadband is being used to uncover gaps and opportunities to be addressed. Broadband utilization and its measurable impacts can quickly be assessed along multiple dimensions of geography, user characteristics, and Internet technologies to identify where broadband is being used to greater or lesser effect.   

The easier it is for our clients and their stakeholder groups to gain intelligence from their data, the more value that data has for them. This is why SNG has invested in the Digital Economy Analytics Platform and will continue to develop its capabilities. Our goal is to maximize the social benefits and economic growth that can be derived from broadband technologies and our mission is to arm our clients and stakeholders with the information and intelligence to take effective action towards this goal. The Digital Economy Analytics Platform is one more powerful step toward fulfilling this mission.   

By using the Digital Economy Analytics Platform, users are now just a click of the mouse away from unlocking the keys to maximizing the business and social benefits of broadband:   

  • Broadband’s Impacts on specific industries – who is using broadband most effectively and who is missing out on opportunities
  • Specific e-solutions utilization among industries, regions, etc. and their economic impact.
  • The differences between rural and urban areas within a region, or between regions – and how e-Solutions help each overcome challenges.
  • The next level of mapping – a map of not only availability – but demand.
  • The factors (other than availability) that drive utilization – and how to “bottle that” and bring it to areas where utilization is below average.
  • The revenue driven and the cost savings resulting from broadband.
  • How broadband impacts job creation.
  • Barriers to using broadband and the needs to overcome them.
  • How different sizes of organizations best utilize e-solutions.

  

“SNG’s latest business intelligence solution, its ‘Digital Economy Analytics Platform’ provides North Carolina the ability to see our broadband data and its economic impact in ways that were previously not easily available to us,” explains Jane Smith Patterson, Executive Director of e-NC “North Carolina now has access to Strategic Network Group’s world-class solution set to analyze broadband utilization and its impacts. The ability for our staff to customize how we see the data and compare it among regions and industries will prove critical for program planning and provide e-NC a strategic advantage to support NC communities regional economic development efforts both locally and globally.”   

“What’s really exciting about Digital Economy Analytics Platform is the ability to compare regions not just within your own territory but across the globe,” explains SNG president and CEO Michael Curri. “With results from studies across the globe, those who wish to share their study results can compare their region to other states, provinces, countries, etc. to better understand steps they can take can do to fully leverage the benefits of high speed Internet. Researchers recognize what we have built as a ‘normative database’ – for the laymen, it is simply the only way for one region to compare itself to another in the world of broadband utilization.”   

SNG goes to the heart of a region’s broadband challenges and success by going straight to a region’s businesses, organizations, and households to collect information on how they use and benefit from the Internet. How are people and organizations using broadband? What are they not doing? What are their needs and barriers? How do they benefit and how do these benefits translate into tangible social and economic impacts? How does broadband utilization and its impacts change over time?   

All of this collected information, analyzed by SNG’s Broadband Economists and made available through the Digital Economy Analytics Platform enables stakeholders to develop programs and initiatives to drive innovation and economic development.   

With our proven track record of showing regions how the use of Internet technologies will be most effective and deliver the most benefits, SNG’s Digital Economy Analytics Platform brings the ability to uncover the drivers of success and the needs of specific geographies more than ever before.   

Local case study on broadband utilization shows US business behind Norway:  “The Trondheim Paper”    

  

By Thibaud Châtel   

Last year the SNG team partnered with the Norwegian University of Science and Technology of Trondheim, a well-known European “Think Tank” for students. SNG provided support to a Master’s Degree student in Telematics, Steffen André Stople, in the form of an e-Solutions Benchmarking project. We studied the hospitality sector (hotels, bed & breakfast, camping facilities, etc.) of the Hardanger Fjord area, which include the second and third most populated cities of Norway – both extremely tourism dependent.   

With an excellent response rate among the accommodation business of the area, comparisons were able to be drawn between Norway and the American tourism & hospitality sector by using SNG’s previously collected data.   

As with much of Europe, Norway is ahead of the US in terms of broadband availability. And given connectivity, utilization should follow the same pattern (even though e-solutions drive utilization as much as availability, see below, next story).   

  • 3 in 4 (75%) of Norwegian businesses are currently using web-enabled mobile phones to provide worker mobility, in contrast to 2 in 5 Americans. 
  • 100% of Norwegians businesses are using laptop computers versus 80% of Americans – making mobile e-solutions more adaptable for Norwegians. 
  • Wireless connection is used by twice the users in Norway than the US (29% versus 14%).
  • Nearly 3 in 5 (58%) of Norwegian businesses are using Internet multimedia content or interactive tools while only 3 in 10 (31%) in the US.  What’s worse is 35% of US businesses say video virtual tour, dynamic slide shows, live webcams and others are not applicable to their business. 
  • More than a third (35%) of Americans’ think that tele-working isn’t applicable in this sector as opposed to 0% of Norwegian businesses agreeing with this point of view.

  

While these results were well received in Norway, illustrating Scandinavians’ advance in the web-enabled 21st century – it is discouraging for those who believe in broadband’s powers and call the United States “home.” A significant portion of American organizations are not even considering the benefits of broadband and web-enabled solutions!   

The “Trondheim paper” illustrates the way to follow, and most satisfied with this work, SNG will continue to support similar projects. Click here to download the full report.   

Quick Bytes

 News items from the broadband economists…   

SNG’s own John DeRidder showed up on the news in Australia, commenting on the NBN  initiative. John talks about how the speed may be a great feature, but price point and lack of e-solutions from the NBN are barriers they are going to have to overcome. Click here to watch the clip on You Tube>>> 
  

 

 
 
 
 
 
 
 

 

   

 


Click through to see the latest results from SNG, showing the direct results of how e-solutions increases utilization.
Click here to see the chart>>>
   


January 2011: Broadband Stimulus, on Both Sides of the Pond

    

An Innovative State of the Union Address Points to the Importance of Broadband

by Doug Adams

Every year in late January, whether “my guy” is President or not, I sit down to watch the “State of the Union Address.” Typically it is marked by partisan politics and divisiveness, characterized by a laundry list of initiatives – covering everything from domestic issues to foreign affairs.

This year, Americans were told, would be different.  The speech would be about the economy and jobs… and how we’re going to get back on track.  And for the most part – minus a pared down laundry list – that’s what we heard Tuesday night.  And before I am accused of being partisan or an Obama lackey… I voted for the other guy.

So putting politics aside, let’s focus on what we heard about the Internet, Broadband, and what it could… or should mean to our future – be it citizens of the U.S., Europe, Australia, etc. Regardless of where we all fall in the political spectrum – the address resonates with what SNG has been touting – broadband means jobs, broadband means innovation – and it was nice to hear about this on such a big stage.

Tuesday night was not the first time President Obama spoke of the United States reaching another “Sputnik moment,” but it was the most forceful use of the analogy he has used, and to the largest audience.  The President sees the parallel between 2011 and the “Space Race” of the sixties – when the Soviet Union’s innovative satellite challenged the U.S. to get involved or be left behind. Innovation, John F. Kennedy believed, would be the key to America’s prosperity.

Today’s space race, put quite simply, is Broadband connectivity – availability and speed – and utilization of e-solutions.  As President Obama opined, “The world has changed…. The rules have changed…. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an Internet connection.”

While what I am hearing is a bit of a “duh” moment… it really piques my interest when he backs this up saying:  We need to out-innovate, out-educate, and out-build the rest of the world.  Okay… so he has my attention… here is a President that realizes it is the 21st century.  He seems to understand that innovation is what made the United States the largest, most powerful economy in the world… and here’s the important part – that the key to innovation, and jobs… and prosperity is Broadband. 

Not groundbreaking… but refreshing, and encouraging.  And backing his words, Obama promises to lead initiatives that result in “research and development we haven’t seen since the height of the Space Race,” promising government investment in biomedical research, information technology, and clean energy technology – all of which he sees as creating countless new jobs.

So, no matter what side of the aisle you are on, if you are a proponent of broadband – it is wonderful to have the issue raised on such a big stage – and hopefully further advanced, even beyond initial stimulus funding.

SNG believes – and has proven through work in multiple regions across the globe – that broadband and Internet connectivity does in fact create jobs.  Not necessarily jobs that we can see today – but it provides a platform for innovation and growth.  As President Obama explained Tuesday, we didn’t know that the Internet would create an economic revolution.  We may not know where the jobs of tomorrow will come from – but we know what they will require, a robust, far-reaching Broadband Infrastructure.  Obama wants to encourage innovation because he believes that, “In America, innovation doesn’t just change our lives. It is how we make our living.”

Read the entire address: http://www.politico.com/news/stories/0111/48181.html#ixzz1C9tadI00

 

Broadband Stimulus… No, Not THAT Stimulus… in Europe   

By Joanna Taylor

In 2009, the European Commission found that:
Broadband is of strategic importance because of its ability to accelerate the contribution of information and communication technologies to growth and innovation in all sectors of the economy and to social and territorial cohesion. 

Nearly two years and hundreds of million dollars later in US Stimulus funding – not to mention the NBN in Australia –  what have the Europeans been doing?  The answer is establishing stimulus packages which have a European twist.

Back in that same year of 2009, realizing that communication providers were not going to be able to fund broadband networks that would reach all 495 million inhabitants spread over 27 countries, the European Union Commission placed a little more 1 billion Euros into the European Agricultural Fund for Rural Development (EAFRD). Concurrently, the Commission publicly encouraged member states to support broadband developments as a key enabler for economic growth and rural sustainability.

Here is where the catch comes… there is always a catch, right?  The Commission also had (and continues to have) a keen interest in seeing market competition as a force to maximize the economic welfare of its citizens. The question the Commission wrestles with  is whether subsidies made to one player in a market are likely to have a negative  effect on competition for the provision of services in that market, which would be to the detriment of those same citizens.

The conundrum was clear.

The solution lay in a series of guidelines under the snappy title of “Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks.”  These set out a series of criteria that any publicly supported roll out of broadband, that is any stimulus package, must meet before public funds can be used.

The guidelines require the member state of the European Union to demonstrate that:

(a) the use of public funds will result in a higher level of broadband coverage and penetration, or at a faster rate, than would occur without that aid, and
(b) that the positive effects of this aid outweigh its negative effects in terms of distortion of competition

In January 2011 the Commission announced that it has approved a record amount of public aid for broadband development in, among others areas, Catalonia, Finland and Bavaria. This involved the use of over €1.8 billion of public funds for broadband development to support economic recovery, inclusive growth and the long term competitiveness of the EU and will potentially generate up to €3.5 billion of investments in the sector. Of those projects Germany accounted for 6, Italy 4, the UK, 3, Spain 3, while Sweden, Finland, Austria and Estonia each had one.

Approved State aid for broadband per year in the EU

Commission Vice-President in charge of competition policy Joaquín Almunia commented: “Smart investments into high and very high speed broadband infrastructures are crucial to create jobs, increase economic performance and to unlock the competitive potential of the EU in the long term. The Commission is committed to help EU countries to accelerate private and public investments in this sector.”

So – in a rather different manner – Europeans get their own version of broadband stimulus.

A few articles from 2010 we want to make sure you have seen. 

It’s Not Adoption… Utilization is the Key  

By Michael Curri

A few weeks ago I was on a phone call discussing broadband adoption and it struck me how ‘adoption’ meant two different things between the client and myself. I was taking one of our clients through the Broadband Lifecycle. I got to step 5, “Promote awareness and adoption” and paused.  Awareness and adoption… good for alliteration, bad for accuracy.  I blame marketing.

What’s critical in step 5 is not merely adoption; it is utilization, making sure that not only are people and organizations connected, but using broadband and e-solutions.  I can give you a car and if it sits in your driveway, you may have adopted the car… but unless you drive it somewhere, it is of no use.

When network operators and service providers talk about broadband adoption, they are talking about how many customers have signed-up for the broadband service. That is fundamental to their business and where they need to focus.

However, just because a business or an organization has a high-speed connection to the Internet does not mean they know how to fully benefit from it. Not only can they get their emails and surf the Web more quickly, but they can access and serve new markets, change their business and operational models by going online, etc. which have the most significant impacts on operations to increase revenues, decrease or avoid costs, make day-to-day operations easier, etc. It’s about the Internet-enabled applications, or as we call them – e-solutions – that drive benefits.

Utilization is the key – being aware of what is possible, what makes sense for that business or organization, and then having the capacity and skills to implement and start using e-solutions.
At SNG, we no longer talk about ‘broadband adoption’ – we talk about broadband utilization because we do not want to confuse a business, organization, or household simply being connected to broadband as compared what they doing with that high-speed connection.

It is necessary to have broadband, but that alone is not sufficient if you want to realize its promised benefits. Impacts are realized from utilization and I’ll expand on that next week with some case examples and hard numbers on new revenues, cost savings, new jobs, etc.

And the next time you see step 5 in SNG’ Broadband Lifecycle, you’ll notice that SNG helps “Promote awareness & drive utilization.”


December 2010: The Year in Broadband

    

Ghosts of Broadband Past, Present & Future    

Greetings – I hope your Holiday Season is going well.

As we bring 2010 to a close and usher in 2011, we look back to what a significant year 2010 was for our industry.  This past year the United States and Australia both recognized broadband needs to be a cornerstone to their economic future, as they invested heavily in proposed projects. Next year, the rubber will meet the road as strategies to best implement projects will be critical for global competitiveness in the foreseeable future.

SNG is thrilled to have the opportunity to continue to partner with regions as they travel along the Broadband Lifecycle. Just recently, our work with North Carolina revealed just how significant broadband is in driving opportunities and job growth. We look forward to partnering with more States and regions across the globe in 2011 to help ensure they get the most from their broadband investment.  One of the ways we do this is by mapping demand and helping to drive e-solution utilization.

In 2010 we introduced the Digital Economy Index to reveal a broadband score and opportunities to drive efficiencies through e-solution use. Beyond the DEi’s abililty to measure individual organizations, DEi can also be used in any industry, sectoral, or geographic region.  As our services continue to grow in 2011, look for an announcement early in the year for our business intelligence database of projects from across the globe – Digital Impact Intelligence to show how your project stacks up… and where opportunities lie for greater economic and social impact.

This year also marked a new, updated website for SNG (The Broadband Economists) along with a blog and monthly newsletter.  The feedback we’ve received has been extremely positive and we thank you for subscribing to Bandwidth. We publish monthly to help you keep up with issues and best practices so that your project – no matter where it is on the Broadband Lifecycle – will experience success.  What is success? Well it starts with utilization of broadband and e-solutions – driving significant (and measurable) economic and social impacts.

So we wish you all the best in 2011 – and want to remind you that we are here to help ensure success along the Broadband Lifecycle. May you have a Happy and Prosperous New Year. 

In Case You Missed it…   

A few articles from 2010 we want to make sure you have seen. 

What Exactly Are We Stimulating?  

 
…broadband is the platform for innovation, competiveness and progress in the 21st century. Without this as a foundation, modern societies cannot compete in terms of economic opportunities – or quality of life.  Investing in broadband is a great thing – it creates jobs and opportunities… But beyond our “gut feeling” and pointing to other areas of the world where broadband has meant the difference between stagnation and prosperity – how do we really know how effective stimulus is… and will be?
Read More >>

A Fresh Look at the Digital Divide 

A lot of funding is being invested in broadband infrastructure, which will bring high speed connectivity to many communities and regions around the world who previously did not have high speed access. As the number of communities without access to broadband declines, there will be room, both politically and financially, for other priorities. Within the context of the digital divide, what priorities need to be articulated and placed on the political and policy map?

For example, as planning and mapping efforts unfold across the United States, including our own SNG projects in North Carolina, Virginia, Louisiana, and Kentucky, more and more evidence is emerging of a shifting picture that is more complex than just “un-served” “under-served” and “served” as defined in the United States by the National Telecommunications and Information Administration. These relatively broad categories have played their role, but need to evolve if they are going to be useful for future planning efforts based on evidence that we have recently collected.
Read More >>

Australia’s NBN Poised to Transform Down Under    

It took several weeks to sort out, but Australia’s hung parliament emerged with the Labor party still in power – and the National Broadband Network (NBN) very much alive and well.  As a refresher, the proposed plan by the Labor party for a $43 billion National Broadband Network (NBN) will provide 100 megabits per second broadband access to approximately 93 percent of the Australian premises.  Currently around 62 percent of households have broadband now and – for the most part – it is slow and expensive. In conjunction, the plan calls for a boost in broadband investment for businesses with hopes that it will directly support economic growth during the rollout?
Read More >>

How to Invest Wisely: 4 Key Guidelines       

Now that you have funding, how can you make sure that your project lives up to the promise that got it funded in the first place? Hundreds of broadband projects are being funded in 2010 – be it from Stimulus or some other funding source – but how many will truly become a community asset that drives economic and social benefits?

Key to making sure your project will have a return on investment with quantifiable outcomes starts with these four guidelines:

  1. Don’t focus on Engineering; it is all about awareness and utilization;
  2. Use data to drive decisions before, during, and after the project;
  3. Create a “platform for innovation”: investing in broadband is NOT just about the financials;
  4. Frame the benefits, measure them, and promote.

Read More >>


November 2010: U.S. Broadband News – from Arizona to Ohio

 

Broadband 101: Utilization Drives Impact

Earlier this month Derek Murphy, SNG’s VP of Project Delivery, and I attended the Rural TeleCon Conference in Arizona – put on by the Rural Telecommunications Congress (RTC). The RTC describes itself as a “national membership organization dedicated to assuring that rural areas in the United States have access to the information and support they need to obtain and use advanced telecommunications services and technology for social and economic development.” 

Leaders of regional broadband initiatives from across the United States gathered to discuss the challenges and opportunities they face in 2011 and beyond.  Representatives from approximately 25 states expressed that while their opportunities (driven in large part by broadband stimulus) are significant – the challenges accompanying them seemed to be overwhelming to most. A key discussion topic at the conference was around looking for ways to leverage broadband for regional development.

From my perspective, there was a sea-change in the broadband discussion because of this focus on regional development. Beyond the “supply-side” of broadband, people started taking a serious look at the “demand-side” of the broadband equation. It’s the utilization that drives impact and benefits.

Hilda Legg, a former RUS administrator, noted in her keynote that it is imperative to the success of broadband initiatives is moving away from “business as usual” where telcos drive infrastructure build-out according to population and instead look to where utilization and accompanying impacts are the most significant.

So how do you overcome this? How do you help to ensure that your hefty investment has an even “heftier” impact?  Step one? “Identify needs, gaps, and demand.” Much of the broadband stimulus allocation was based on “gaps” and “needs” – areas that are under or un-served.  But this does not ensure use – unlike “Field of Dreams,” building broadband does not ensure people will come.

Instead of building a baseball field in a cornfield, make sure that you map demand – benchmark utilization of e-solutions throughout your region to uncover where the deepest and most long-lasting impacts will occur.

This exercise will not only help you know areas most likely to adopt broadband, it has the added benefit of driving awareness among businesses, organizations, and households.  So what? Well this helps to drive adoption, application development, and ultimately the economic and social impacts of the network.

Washington’s State’s Broadband Policy and Programs Manager Angela Wu summed it up best: “Don’t just map supply, map demand too!”

SNG’s Michael Curri Appointed to RTC Board

At the annual conference, SNG president Michael Curri was appointed to the Rural Telecommunications Congress Board.

“We’re thrilled to be part of the RTC as we’re extremely excited about the direction the organization is moving,” says Curri. “SNG looks forward to helping organizations understand how to map demand to leverage broadband investments for maximum impact.”

Collaboration Means Cost Savings for You! 

Identifying demand is just the first step to ensuring success along the Broadband Lifecycle

As you move to planning and strategy (steps 2 and 3), benchmarking utilization of broadband and e-solutions uncovers synergies and potential partnerships to share in e-solutions investments. This can be among government entities, organizations, or industries with shared goals and interests. The key is that drivers for change be identified and quantified in terms of impacts and benefits that each stakeholder group can expect by committing to a collaborative project.In the US, there is a unusual paradigm many regions face as they receive heavy investment in the form of broadband stimulus – while at the same time are seeing their operating budgets slashed and pressure to reduce staff. 

States investing in broadband can have an even greater impact by finding areas where collaboration amongst different stakeholders on innovative uses of broadband applications makes sense.

A widespread broadband deployment offers a chance for every organization to examine how they currently deliver services. Broadband offers the opportunity to improve service, extend reach, and increase the scale and scope of efficiencies – all critical in today’s fast-paced (and budget cutting) world. 

SNG Facts:  SNG’s 2010 survey of County and Municipal governments in the State of North Carolina reveals that 75% of county and municipal governments view the opportunity to reduce costs and increase efficiencies as a very important motivation for adopting e-solutions, while 56% see this as an opportunity to undertake collaborative initiatives with other organizations. However, only 19% are currently collaborating with other organizations on the provision of shared services with another 12% actively considering such collaboration. 

The current economic downturn and the severe budget reductions that governments at all levels are facing is a ‘burning platform’ and an opportunity for breaking down existing silos and changing cultures towards sharing infrastructure and services. With responsible spending and efficiencies a front and center concern, now is the time to change how services are delivered.  SNG’s e-Solutions Benchmarking can help you identify where the opportunities for collaboration are – and where the most immediate and significant impacts lie.  Without clear insights, trying to drive collaboration is a little like trying to boil the ocean… theoretically possible, but practically unachievable.

How do you communicate “sharing” broadband infrastructure with potential partners and citizens? Start by asking – does it make sense that each airline have their own airport? An American Airlines airport, a Continental airport, etc. would all be required had the airlines not agreed long ago that sharing infrastructure – even with their competitors – was the most efficient way to leverage infrastructure and deliver quality service.

SNG’s experience has consistently pointed to and developed strategies for collaboration with quantifiable benefits that double the investment.  And as our recent study in North Carolina shows, citizens are poised for collaboration, efficiencies, and change.  This is the time – how will you capture the opportunities for your region? 

Making a “New” Old Brooklyn

by Jim Nice

Northeast Ohio continues to be recognized globally as a model of regional broadband implementation as the Intelligent Community Forum (ICF) once again tabbed it as one of their 21 global “smart communities.”Part of the ongoing efforts in the Cleveland area to separate the region from competitors includes the Northeast Ohio Broadband Coalition (NEOBC). This organization is bringing together stakeholders and vendors involved in both access technologies/hardware with those that develop content and applications to revitalize a West side neighborhood of Cleveland called Old Brooklyn.

Cleveland Councilman Kevin Kelly parlayed a number of financial resources and spearheaded by the local community development corporation, the Old Brooklyn neighborhood is in the early stages of deploying a wireless broadband infrastructure. His vision is a neighborhood that will attract and retain business while utilizing the Internet to enhance the attractiveness of the community and its workforce – while at the same time serving as a model for other Cleveland neighborhoods. 

Key success factors for the model Old Brooklyn used include:
  • Community Engagement:  forming “communities of interest” around major broadband application areas to align expectations, resources and applications – education, health care, economic development, seniors, arts & culture, public safety, the underserved, utility usage.
  • Application Development: assembling a team of individuals and companies to work on developing and discovering applications, content, services & products to deploy on the network. In addition a local support team will anchor a storefront in Old Brooklyn, as the first occupant of a business incubator.
  • Communications: working with OBCDC to integrate the network – and its new tool set – into their communication strategies both internal to the neighborhood and externally to other constituencies. Expanding the news function of neighborhood publication “Old Brooklyn News”  into a “community information portal.”
  • Training: developing effective “digital literacy” programs that target local citizens and organizations. Adoption and usage of the network – driven by worthwhile applications – is the only way that its true benefits can be realized.

A holistic approach that embraces collaboration is a fundamental platform for success. A coalition representatives of every aspect of citizenry is involved in Old Brooklyn’s course of action – from residents to organizations, companies and associations sure to be impacted by access to a ubiquitous broadband network. This includes education, health care, senior citizens, public safety, utilities, community groups, economic development professionals and more. By focusing on stakeholder needs, Old Brooklyn demonstrates how focusing on awareness and adoption is a model that can be replicated throughout each of the cities and the rest of the region. 

As always, thank you for your continued support. If you have any questions or feedback, please don’t hesitate to get in touch!


October 2010: North Carolina Broadband Findings and Australia Update

 

Current Economic Impact of Broadband and Opportunities Revealed in e-Solutions Benchmarking and e-Strategy Reports from SNG 

(October 28, 2010) e-NC and SNG announced today the findings of a comprehensive study of residents and businesses in the state of North Carolina.  In all, 30,000 households and 70,000 businesses and organizations were surveyed to uncover utilization of broadband and e-solutions statewide, with 1,492 households and 6,266 businesses and organizations responding. The e-Solutions Benchmarking and accompanying e-Strategy report from SNG was funded by a grant to the e-North Carolina Authority by the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce.

The e-North Carolina Authority (e-NC), and its predecessor the Rural Internet Access Authority, have worked to improve both the supply and demand side of the broadband issue since 2001.  The SNG study, conducted between February and October 2010, revealed the potential of broadband for competitiveness and economic opportunity:

  • Nearly one in five (18%) of new jobs were created as a direct result of Broadband Internet. Small businesses (less than 20 employees) are especially dependent on Broadband Internet as 28 percent of new jobs in that sector are attributed to using the Internet.
  • More than half of all businesses (54%) said that they would not be in business if they did not have broadband while two in five (41%) would have to relocate if broadband was not available in their community;
  • The number of households either currently running (31%) or planning to run a business from their home in the next twelve months (14%) is nearly half (45%) of North Carolina’s broadband
    households;
  • Even more broadband households are either now using (41%) or planning to use (24%) broadband to sell items online. That’s nearly two-thirds (65%) of broadband households using it to at least supplement their income;
  • Most (85%) of home-based businesses said that broadband was essential to their business.

“We see in these findings how important broadband is to creating new jobs and improving quality of life in North Carolina,” said Michael Curri, president of SNG. “We now have the data that shows why it is so critical to promote broadband infrastructure along with adoption in North Carolina. e-NC has been and continues to be a leader in this field in making sure that North Carolina captures the benefits of broadband in the years ahead.”

The e-Strategy report revealed clear and direct paths to further leverage broadband and available resources to expand broadband’s reach.  E-NC will be tackling the state’s challenges with strategies for:

  • Better connectivity in un-served and under-served communities
  • Mobile broadband to extend flexibility and reach
  • Driving broadband adoption
  • Supporting adoption of new and ground-breaking e-solutions
  • Collaboration, utilizing stakeholders, community networks and anchor institutions

By employing e-strategies on multiple fronts, North Carolina will be poised to further leverage broadband for job development and economic growth.

“Findings show thirty-nine percent of households say they would likely relocate if broadband was not available, while 55 percent of organizations say broadband is essential for staying where they are,” says Jane Patterson, Executive Director of e-NC.  “These numbers illustrate why it is important for all of us to continue to address the issue of broadband expansion in North Carolina. The e-NC Authority will continue to work with all providers to encourage greater broadband coverage across the state. We will also place a special focus on working with small businesses to show how they can increase their revenue potential through use of the Internet.”

About e-NC Authority

The e-NC Authority is the state initiative to link all North Carolinians – especially those in rural areas – to the Internet. The purpose of this organization is to use the Internet as a tool for helping people to improve their quality of life. Affordable Internet service will provide North Carolinians with increased access to commerce, health care, education and government services. Through the Internet, rural North Carolinians can utilize resources not located in their areas, contact friends and experts, grow their businesses and increase their personal knowledge – all while preserving the lifestyle that is an integral part of who they are. The e-NC Authority was preceded by the Rural Internet Access Authority, and was created on Aug. 2, 2000 by the N.C. General Assembly. The organization became fully functional in January 2001 and is governed by a commission appointed by the governor and the N.C. General Assembly. By legislative mandate, the e-NC Authority is housed and staffed by the N.C. Rural Economic Development Center. Visit www.e-nc.org.

DEi Expands to Score Industry Sectors 

In June, we announced SNG’s popular new offering: the Digital Economy index (DEi).  A composite score of how organizations use seventeen (17) Internet-enabled applications, or “e-solutions,” DEi is a unique assessment tool that can be used at any industry, sectoral, or geographic analysis of businesses and organizations to drive productivity and competitiveness.

DEI enables businesses and organizations to see where they stand relative to their peers. It can also produce customized scorecards at an individual organizational level showing where improvements can be made to be more productive and competitive in the 21st century knowledge economy.

As SNG’s DEi is a composite score of how organizations use Internet-enabled applications, or “e-solutions,” to drive productivity and competitiveness, DEi can also be shown strengths and weaknesses within industry sectors. 

As we’ve just completed our latest work in North Carolina, let’s take a look at the DEi results by industry and sectors for North Carolina. The overall median DEi for all organizations surveyed in North Carolina is 6.99, with 50 percent of organizations falling between a DEi of 5.34 and 8.45. These scores compare utilization of e-solutions between industry sectors and we’ll explore what that means below.


Opportunities for increasing DEi, with resulting economic benefits, can be identified for potential action to increase the utilization of e-solutions by businesses and organizations.

For example, in North Carolina, the Construction industry (DEi = 6.17) and Information Services industry (DEi = 8.16) have among the lowest and highest median use of 17 types of Internet applications or processes.  The average DEi for North Carolina was 6.99 (high is better).

Some of the differences in the DEi score reflect unique characteristics of the structure of that industry. For example, the Construction industry has very high use of certain applications, such as supply chain management and document transfer, while having low use of tele-working.

One interesting example of using the DEi is a comparison of the Education industry (high DEi of 7.96) and Health and Human Services industry (low DEi of 6.60). Comparing these two industries highlights the extent to which the Education industry has pioneered such Internet uses as direct service delivery and remote counselling, while Health and Human Services lag significantly in these areas.

SNG’s proprietary DEi analysis is very useful in designing initiatives aimed at increasing the level and productivity of broadband adoption. For proponents of broadband as a critical tool for economic development, DEi shows where organizations and industries are leveraging broadband – and where they should be employing more e-solutions.

Back to Down Under

It took several weeks to sort out, but Australia’s hung parliament emerged with the Labor party still in power – and the National Broadband Network (NBN) very much alive and well.  As a refresher, the proposed plan by the Labor party for a $43 billion National Broadband Network (NBN) will provide 100 megabits per second broadband access to approximately 93 percent of the Australian premises.  Currently around 62 percent of households have broadband now but – for the most part – it is slow and expensive. In conjunction, the plan calls for a boost in broadband investment for businesses with hopes that it will directly support economic growth during the rollout.

The influential Australian Industry Group lobby calls the NBN an “unprecedented opportunity” for business innovation and with the ubiquitous nature of the fibre roll-out – bringing with it unparalleled speed and reliability. The group cites the long term opportunities that broadband “everywhere” brings, creating an environment where Australian businesses are able to create services and business models that do not yet exist on a network which will give Australia the fastest internet access in the world.

Some of the NBN’s first cables are being laid in Willunga. This is trial site in Southern Australia; one of five across mainland Australia. The state of Tasmania is already offering fibre-based services as part of the NBN roll-out and hopes to complete its roll-out by 2015; at least 3 years ahead of the mainland.

The Australian roll-out target is expressed in terms of coverage: any premise in a street with fibre rolled down it must be connected within a few days of demand. Naturally, free connections are being offered as the roll-out takes place. Activation only occurs where a customer asks a retail service provider to provide service over the fibre.

Surprisingly, only 50 percent of households in Tasmania have taken the free connection compared with over 80 percent in the mainland trial sites. It is not clear what explains Tasmania’s experience.  Perhaps communication is poor (i.e. low or no awareness campaign activity) and customers expect Telstra’s copper network to remain; Telstra is planning to migrate all its customers to the new network. Tasmania is passing legislation requiring customers to provide written notice if they wish to opt-out of a free connection (versus opt-in as now). 

Worse, less than 1 in 10 customers connected in Tasmania have chosen to activate a broadband service over fiber. Perhaps, the offers made by several internet service providers are not attractive. A leading provider, iiNet, is providing exactly the same plans on fiber in terms of price and down load caps as it offers for ADSL2+ except that until June 2011 the down/up stream speeds will be increased from 25/2 (same as ADSL2+) to 100/8 Mb/s. Customers may prefer to stay with their current connection on ADSL2+ than become “guinea pigs” on the NBN network. That coupled with the “hassle” of changing providers, the question becomes whether the broadband status quo is unacceptable enough for people to spend the time and money to switch to the NBN? And do citizens understand the value of the opportunities afforded by the new fibre network?

The uptake challenges illustrate what we always say – Field of Dreams is a nice movie, but “build it and they will come” does not work in the real world.  To ensure that individual businesses, organizations and households connect to the NBN, Australia’s leaders need to promote adoption of those e-solutions that are customized to their needs.  To maximize the return on investment requires addressing local / regional drivers and barriers and with it appropriate awareness and adoption programs at a regional level. By following the Broadband Lifecycle, Australia will see major payoffs for their broadband investment in terms of productivity, competitiveness, and quality of life.

As always, thank you for your continued support. If you have any questions or feedback, please don’t hesitate to get in touch!


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