by Paul Budde
Wrong. The field of dreams only happens in films. In the real world it takes a lot of effort. A telling example with lessons for Australia is Cornwall.
Late last year, British Telecom announced plans to install 150,000 kilometres of fibre cable in Cornwall. BT is providing £78.5m and there will be up to £53.5m from the European Regional Development Fund. The European Commissioner for regional policy, Johannes Hahn, said it was the largest investment of its kind supported by EU funds.Sally Davis, the chief executive of BT’s Wholesale division, called the venture an “absolute landmark” for the company and said “This is the most ambitious rural fibre project in the world.”
It is because Cornwall has proved itknows how to promote broadband.Back in April 2002, Cornwall invested € 20 million (from various sources including € 4.5 million from British Telecom and € 7.5 from the EU) in project actnow to bring ADSL to the region. It had stretching objectives. Within the first three years, actnow was supposed to achieve a coverage rate of 50% and a broadband penetration of 3300 businesses (equivalent to about 18% of all businesses). BT was sceptical because an earlier development of the DSL infrastructure in a rural region in Wales had only reached 3% broadband penetration among businesses 1.5 years after its launch.However, actnowachieved a coverage rate of 99% within the first four years and the challenging target of 3300 businesses using broadband connections was reached a year ahead of time.
Actnow has changed the image of Cornwall, from a rural laggard to a region where it is worth living and working. It became more attractive for investors, for innovative businesses and for young people who are returning to the region. According to actnow, about 4300 broadband-related jobs have been created between 2002 and 2007 (including through start-ups) and the contribution to the annual GDP of Cornwall has been about € 140 m. This is a seven-fold return on the initial investment.
What can we learn from actnow?
In 2002, businesses and especially small business lacked an awareness of the potential of broadband. One of the themes emerging from the many submissions to the House of Reps Inquiry into the Role and Potential of the NBN is that prospective end-users do not know much about the NBN beyond the hype.
To overcome such obstacles to the adoption and utilisation of the NBN, we need to focus on measurements such as:
- Broadband’s impacts on specific industries – who is using broadband most effectively and who is missing out on opportunities?
- Identifying specific e-solutions utilization among industries, regions, etc. and their economic impact.
- Exploring the differences between rural and urban areas within a region, or between regions – and how e-Solutions help each overcome challenges.
- Going to the next level of mapping – a map of not only availability – but also 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.
This is exactly the kind of work that the Strategic Networks Group (SNG) has been engaged in for many years. 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 broadband.
For its 30th anniversary this year, ATUG has invited the founder of SNG, Michael Curri, to run a workshop on regional planning for broadband on 30th March in Sydney.
By Art Brodsky
Communications Director, Public Knowledge
Click to Read on The Huffington Post’s Website
After all the shouting has died down, after the House elects its Republican leaders and after the Senate sorts itself out, the reality is that policy in the telecom sector will likely remain where it has been for the past two years — in state of suspended animation. That’s a shame, because the people who can most benefit by some reasonable and common-sense changes may not have the opportunity to do so.
The two issues at the top of the list are Net Neutrality and the wonky-sounding “reclassification” of broadband services. Net Neutrality is the simple concept that those who control the telecommunications networks shouldn’t be able to play favorites with the content that is transmitted over those networks. It’s an old concept, as Prof. Tim Wu pointed out in his book, Master Switch: The Rise and Fall of Information Empires. The simple, fair idea is that everyone online should have the same ability to make his or her voice or service known to the rest of the world.
President Obama campaigned in part on restoring an Open Internet. Julius Genachowski, his chairman of the Federal Communications Commission (FCC) hasn’t delivered, and probably won’t. As his pattern of activity has developed, Genachowski has ducked the major issues to which the big telecommunications companies, aided by the congressional Democratic Blue Bells and by all congressional Republicans, have objected. He has the votes of the other two Democratic FCC commissioners, but that’s not enough for him.
As a result, Genachowski has taken the pressure off of Congress to do anything to ensure an Open Internet, in which everyone, not simply the big phone and cable companies, can benefit. (The fact that 95 Democrats who signed a Net Neutrality pledge lost on Tuesday is irrelevant. They would have lost anyway in the GOP landslide.)
As with any issue when the battles are controlled by big companies, it’s the small ones who get overlooked and/or crushed. In a recent blog post, Kevin Warhus, marketing manager for the Scottsdale, Ariz., digital marketing company StringCan Interactive, wrote about the link between a neutral Internet and what he sees as Web 3.0, which seeks to personalize the Web experience for consumers. Warhus is particularly concerned about telecom control over the mobile Web and the effect on small businesses his company helps to support. He wrote:
As we evolve into the age Web 3.0 in which our information, likes and dislikes, and online habits help create a personalized web experience, Net Neutrality stands as an important stepping stone to ensure the proper development of Internet interaction and the protections of our freedoms.”Allowing a handful of powerful corporations to decide what websites and information we should be able to access defeats the purpose of this open source frontier. The Internet has always stood as an environment where anyone can make a website or blog and receive equal opportunities to be heard and to grow. By taking away those rights we are essentially handing over our freedoms and going against the foundational values that make The Internet what it is today and what it may or may not be tomorrow.
Congressional Self-Interest Should Be A Factor
But the larger issue, and the one in which the enlightened self-interest of all members of Congress should kick in, is the reclassification of broadband services. Again, the concept is fairly simple. Until 2005, the FCC had jurisdiction over the telecommunications connection that connected people to the Internet. The Bush-era FCC “reclassified” that service from one with explicit authority to gray areas — without any outside huffing and puffing that it should be a congressional decision that such a thing be done.
Since then, the FCC has deregulated all but the most basic voice-line services and removed any requirements that may help consumers. This shaky structure survived until April 6 this year, when the U.S. Appeals Court for the District of Columbia ruled that the FCC did not have authority over broadband services in the way the agency claimed it did.
After typically dithering around for a couple of months, the Commission proposed a compromise that would allow some regulatory authority but not the full slate of regulations. Typically, the industry and their congressional allies overreacted, starting the meme that the FCC wanted to “regulate the Internet” and that Congress had given the Commission no such authority.
That argument is total nonsense. No one is regulating the Internet. The FCC wants its jurisdiction back over broadband access. Members of Congress, particularly from rural districts, should want the FCC to have that authority. By denying the Commission that jurisdiction, representatives, particularly those from rural areas, are working against the interest of their constituents.
The Universal Service Fund, which provides financial support to rural phone companies, only is directed to help plain old dial-up service. If those members of Congress want their constituents to have the benefit of support for broadband, and to allow their constituents to participate in the broadband economy, then the FCC has to be able to make some changes, switching the support to broadband services. It can’t do that unless it has the authority and jurisdiction.
Big telecom and cable companies and their ideological allies oppose reclassification. Interestingly, however, the Communications Workers of America, which sided with the industry opposing Net Neutrality, signed a letter endorsing reclassification.
If we needed any more evidence of how important broadband is to rural areas, a new study by the Strategic Networks Group for the e-North Carolina authority (e-NC) has some fascinating new statistics that show how crucial broadband is to the economy in general and to job-generating small business in particular. Some of the study’s findings:
• 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.
The study also went into some detail about the problem of pockets of areas generally served with broadband that don’t have it; how areas served with inferior broadband are at a competitive disadvantage, and lots of broadband service is really very slow and unhelpful.
The Authority the FCC Should Cede
Over the past few months, Genachowski has shown a willingness to cede his agency’s authority to Congress. He wouldn’t act on Net Neutrality or reclassification, wishing instead that a last-ditch effort by current House Commerce Committee Chairman Henry Waxman (D-CA) to negotiate a Net Neutrality bill might come to fruition. It was a gallant effort, but the House Republicans killed it.
Genachowski sat out the blackouts of millions of TV viewers from favorite channels, including the most recent fight between Fox and Cablevision, which blacked out three million people in the New York City area and Philadelphia. He said the FCC doesn’t have the tools to intervene. He declined to take any action on a petition for rulemaking filed by Public Knowledge and others to reform the retrans system, based on the part of the law that gives the FCC authority to “enact regulations as necessary” to carry out the law that gave broadcasters the right to exact payments from cable companies. Instead, he wants Congress to work out the problem.
So far, the one area in which Genachowski has not conceded congressional authority is the one he should — universal service reform. Holding up USF reform until the agency’s authority over broadband is clear will force those members of Congress who care more about their constituents’ welfare than silly Tea Party talking points to take the Commission’s authority seriously. If members of Congress don’t give the FCC the authority it needs, the areas they represent suffer.
We shall wait for Congress to act (or for the FCC to act, for that matter) on these crucial issues as we wait for Godot.
Follow Art Brodsky on Twitter: www.twitter.com/artbrodsky
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
- 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.”
Visit the e-NC site to see the complete results>>
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.
About Strategic Networks Group
SNG is a group of broadband economists who develop strategies for most effectively leveraging broadband investments. We look to help make the most broad-reaching and transformational impacts that broadband can bring enable businesses, communities and regions by delivering the data and analysis decision makers need to maximize broadband’s potential. Our goals: economic development, social advancement, increased productivity and competiveness. Learn more about SNG online at www.sngroup.com and discover how broadband market analytics can accelerate regional economic development.
Fill in the following form and you will receive a message in your inbox with a link to download the “North Caroline Findings 2010” PDF.
Australia’s broadband future hangs in the balance
With election results still trickling in over a week past election day, it is still unclear which party – the Liberal or incumbent Labor will emerge in power. The months and weeks leading up to the election were fascinating on many levels – but let’s just focus on one very significant issue – the National Broadband Network.
Hotly contested, Labor’s $43 billion National Broadband Network would provide 100 megabits per second broadband access to approximately 93 percent of the population.
Currently Australia has – for the most part – slow and expensive Internet service. In conjunction, the NBN plan calls for a boost in broadband investment for businesses with hopes that it would directly support economic growth during the rollout.
The other side of the aisle, the challenging Liberal party wants to scrap the plan in favour of a $6.3 billion, privately run alternative.
All eyes in the broadband industry are waiting to see which side – and with them their broadband plan – will win out. Well we’re still waiting as the parliament remains hung while each side hope to sway Independents over to their side.
While we wait, let’s look at the issues:
- What is the $43 billion based on and is that an appropriate level?
- Who should build it? – and operate it?
- What return on investment can Australia expect from its broadband investment – be $43 or $6 billion?
- Will broadband investment result in a platform for innovation, competitiveness and growth that could propel Australia into a hotbed of technology and development?
These are important questions and no matter the party affiliation, taxpayers should be told how their money will be used – and what benefits and outcomes to expect.
Unfortunately, there has not been much discussion on the two most important aspects of this debate: how individual businesses, organizations and households would use the new broadband capacity – and what the economic or social impacts will be. Without that understanding there is no meaningful economic case, let alone business case, for investing in such a network. The economic case is the most important as many of the economic and social benefits are ‘off-balance sheet’ to the telcos.
Support and urgency for high-speed and high quality broadband connectivity gets lost without this critical information on utilization and quantified impacts – information that should be part of any due diligence. For example, if looking at a certain hospital – are they using remote diagnostics, electronic patient records, etc. – and should they be if they don’t? For businesses, if their utilization of e-solutions and Internet-enabled business practices is not at par with their global competition … what share of business can they expect to win in a globally competitive economy?
The community return on investment (Community ROI) needs to be understood because it is the only way that governments can justify using public monies to build broadband networks.
Explanation of current versus future demand for broadband is based on the utilization of e-solutions. When investing, you need to identify and understand the gaps between how e-solutions are currently being used versus how e-solutions can and should be used to maximize economic and social benefits. It is business 101 – you identify the need, you understand your customers and then you build your product or service to address the needs of the customers you want to target. This approach is taken when building the hardware that makes-up broadband networks, but this approach seems to be put aside when those broadband networks are being designed and planned.
Just like roads, high quality broadband networks enable economic activity and social services whose benefits far exceed the initial investment.
Whichever party forms the majority, they need to approach high speed broadband network investments focused on the demand-side (current and future) with the understanding that they are building infrastructure that serves all sectors of a modern economy. To realize these productivity and competitiveness benefits, Australia needs to act decisively and quickly. The opportunity cost of broadband infrastructure being hostage to politics will be borne by the Australian people.
See this article in the publication.