When You Come to a Fork in the Road with Your Broadband Network… Take It.

Taking the Best of Broadband Strategies to Maximize Growth

by Michael Curri
For broadband networks receiving public investment, economic development is an inherent driver and critical to the success of the network. But how do you choose an economic development strategy which leverages the new network? You can take a business attraction ‘because we built it they will come’ approach, or you can ‘grow your own’ local businesses. It’s a fork in the road that you can choose a direction, or just take it and develop an approach with elements of each.

First off, don’t wait until the network is built to address awareness, adoption, and utilization with end-users. Waiting until the network is built leaves the network operator and local economic development officials scrambling to develop strategies for achieving network sustainability and the expected socio-economic benefits from the network. Second, strategies that independently pursue network sustainability, local business retention and growth, and business attraction will cost more and not be as effective as compared to an approach that integrates these elements.

Recently I visited the Isle of Jersey, one of the Channel Islands (south of England), where I was confronted with this very issue. Jersey Telecom is taking a proactive approach to their future telecommunication infrastructure, tearing out their copper network and replacing it with fiber. The reasons for this change are threefold: 1) the fiber network is ‘future-proof’ as well as more resilient to the numerous severe electrical storms in the area; 2) by replacing the copper network with fiber they avoid the cost of operating two networks; 3) the removed copper will be sold and those funds are a substantial contribution to financing the network. Because of their proactive approach, Jersey Telecom received the 2013 Operators Award from the FTTH Council Europe. The challenge for Jersey is how to use their Gigabit network to drive economic growth and achieve network sustainability.

Two strategies are typically taken: a) attracting businesses from elsewhere to come and setup in Jersey to leverage the new Gigabit network; or, b) focusing on existing businesses in Jersey to help them understand what this Gigabit network can mean to them – from improving their operations and customer service to increasing their revenues and bottom line. As a broadband economist, my question is: ‘Which strategy will have the most significant and most immediate gains to the Jersey economy and its people?

Below are some typical key points in the outward looking vs. inward looking strategies. Although attracting outside businesses to move to your region may be compelling and lucrative, there are potentially significant barriers to overcome. On the other hand, the ‘growing your own’ economic development strategy is less glamorous and lots of work.

In the end, looking to grow your local economy by attracting businesses from outside your region is a very long and inexact process. Achieving network sustainability will rely on local business retention and growth, as well as business attraction. It is a question of balancing opportunity with time to recoup the initial investment and reach sustainability.

For Jersey, and in fact any community or region investing in a broadband network, it is more difficult to look internally, but when thinking through the issues between the two strategies – ‘growing your own’ has a definable target and strategy based on an intimate knowledge of your existing community asset.