As the FCC promotes the National Broadband Plan, it appears it’s convinced making 100 Mbps Internet access speed available to 100 million households within 10 years will bring transformative change to the U.S. One of the expected outcomes is a positive impact on economic development. But will it? More importantly, is there too much emphasis on the ability of speed to drive economic success?
A recent survey of economic development professionals and others who deal with local economic issues by the International Economic Development Council (IEDC) reveals that not only do over 55 percent believe we need more than 100 Mbps to impact economic outcomes, they feel we need these speeds within three years. Survey respondents view the FCC 10-year goal of 4 Mbps download speed to rural areas less favorably: 41 percent believe it is “too little speed over too much time,” and another 31 percent feel this should only be a stepping stone to faster speeds. The data reveals a disconnect between what policymakers hope broadband (as they define it) can achieve in economic development, and what communities can realistically expect broadband to achieve.
Broadband champions in government rightly recognize that broadband can significantly impact a number of key economic outcomes, such as business growth, productivity and a well-trained workforce. However, DC agencies have made speed the tail that wags the dog. Unless and until policymakers come to grips with the realities in the communities, we can expect to have broadband’s potential stifled by policies that lead to bad legislation, wasted money and countless frustrated constituents.
Bursting the bubble of exaggerated expectation
In 2007, IEDC and I teamed up to survey professionals who know best how to tackle the more intractable economic development problems. We consistently find that a few of the most ardently advocated broadband benefits are, in reality, low on the list of economic outcomes. We also find that broadband technologies are not equal in their ability to achieve certain economic outcomes.
Three of the most popular economic benefits of broadband cited frequently are
- keeping businesses in town;
- making local businesses more competitive; and
- attracting new companies to an area.
Of the seven outcomes presented to survey participants, these three garnered the greatest amount of support in this year’s survey.
However, digging deeper into the data reveals that the particular broadband technology you use makes a big difference in the outcomes communities should expect. About 55 percent of respondents believe fiber will directly impact communities’ ability to lure businesses, 42 percent say it will directly help retain businesses, and 40 percent feel it will enable local companies to compete more effectively.
Wireless, on the other hand, is only seen as directly impacting these outcomes by 37 percent, 24 percent and 29 percent of respondents respectively. Although fewer overall believe broadband can directly impact outcomes such as revitalizing depressed business communities and implementing more effective worker training programs, more believe fiber networks will have an impact than wireless.
The survey numbers for all seven categories of economic outcomes subsequently argue for wired broadband as most crucial for economic development. Yet, messages from D.C. policymakers (advocated loudly by telecom companies) are proclaiming mobile (wireless) broadband to be the technology that leads us to the broadband promise land.
It would be an error to use these figures to declare fiber to be the only solution or the best solution for every community. A whole slew of local factors, from budgets and political considerations to the ability of local businesses to do well with highspeed fixed wireless, can make wireless a logical course. But it’s important to point out the fallacy of declaring wireless or wired to be the only choice everywhere.
What’s our true need for speed?
Fewer than 9 percent of respondents expect broadband speeds of 4Mbps to be adequate by 2013 to achieve any of the outcomes listed in Figure 3. Even the FCC’s goal of 100 Mbps looks weak when 55 - 60 percent of respondents believe communities will need more. Thirty-four percent alone say communities need at least 1-gigabit networks if they want broadband to be a sufficient inducement to draw in new business.
It’s also interesting to see how much speed respondents believe is necessary to achieve personal economic development outcomes, such as improving low-income individuals’ ability to create wealth, become entrepreneurs or run profitable home-based businesses. More than 60 percent expect individuals will need over 100 Mbps, and need it seven years ahead of the FCC’s goal (Figure 4).
Policymakers paint a picture of various achievements for broadband in telemedicine, education and particularly, economic development. Yet they saddle that picture with speed goals incompatible with the expectations created. Imagine if President Kennedy had said “Within 10 years we will send a man to the moon and return him safely to the earth, but our goal is to fly at 200 miles an hour” (a speed already slower than commercial jets at that time).
Blair Levin, chief architect of the national broadband plan and advocate for the 4 Mbps goal, states in a recent interview, “I’ll be happy to debate this with anybody anytime anywhere if they answer three questions: What should the speed be? What will it cost? And how will we pay for it?”
The first is a trick question. The goal isn’t about speed, it’s about getting to the moon and back at whatever speed it takes to get the job done. With broadband technology, this benchmark is fluid among communities and constituent groups and their respective needs.
The answer to the second question is: one hellava a lot, especially if you want to do the job right. The answer to the third question is, we can pay for these networks if fewer people had a backward worldview on this issue. Chattanooga, Tenn., Santa Monica, Calif., and Wilson, N.C. are three communities that have already found ways — without broadband stimulus dollars — to build gigabit networks.
The greatest barrier to getting the broadband to impact economic outcomes are those who view the solution as coming from exclusively from DC facilitated primarily by incumbents. This subsequently leads to the fixation on speed. One survey respondent summed up the situation. “..most people (even the younger ones) do not know the difference between a bit and a byte, so speed over the wire becomes something more like a shell game when vendors are promoting their particular network. Encourage local development.”
Fifty-one percent of those professionals surveyed believe that the business models best able to get the job done are ones in which communities are the driving force and they have ownership in part or in whole of the infrastructure. The biggest need businesses and individuals have is for government policy to facilitate community-focused solutions.
Craig Settles is a broadband industry analyst, co-director of Communities United for Broadband and was named one of Huffington Post’s 16 Tech Titans on Twitter (@cjsettles).