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.
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.”
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.
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.
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.
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.
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.
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.
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
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
And had this mayor not been a visionary, he may have stopped at building the stadium and then letting market forces dictate what happened next. Instead, his infrastructure – his stadium – was the first step in his plan that would enable this City to become the a) recognized “Amateur Sports Capital of the World,” b) home to a NFL team, and c) most importantly, one of the top convention cities in the United States.
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.
