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 34^th 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.