The State of the Union, the Economy & Broadband

President Barack Obama’s State of the Union speech is tonight, where the commander-in-chief is expected to espouse jobs programs and improving the economy on the Main Streets of America’s urban, suburban and rural communities. But no rallying cry is complete without acknowledging the pivotal role broadband can play reaching these goals.

Some people, based on the nature of the American Recovery and Reinvestment Act stimulus bill, expected the broadband grant program within it to generate jobs building networks. However, this misses the bulk of broadband’s economic value. The greater value comes from long-term benefits: economic development, job creation and the creation of personal wealth through the many ways the technology is implemented and used as a catalyst for actions taken, mainly by communities themselves.

Here’s how I see broadband working hand-in-hand with the president’s efforts to turn the economy around. It’s a straightforward path; just follow the money.

Broadband improves how local businesses communicate and execute core business operations. The SBA reports that almost one-third of small businesses, (which collectively hire over 50 percent of U.S. workers according to the U.S. Small Business Administration Office of Advocacy), “indicate a need for broadband speeds that require greater capacity networks than currently exist in many locations in the United States. And where this high-capacity access is available, it is extremely expensive—typically more than $1,000 per month.”

Better broadband, along with appropriate support from local economic development agencies, enables businesses to compete regionally, nationally and internationally. Furthermore, communities can supplement these services with wireless access for the general public in depressed business districts as part of local programs to drive consumer traffic and revenue to these areas, which Seattle did as part of its economic development efforts (PowerPoint file).

Create an economic recovery force by turning the unemployed and underemployed into home-based entrepreneurs. My recent national survey of economic development professionals documented a belief by 52 percent of respondents in using broadband to achieve this goal, with another 25 percent indicating they had personal experience achieving these results. Sixty-two percent of respondents say broadband speeds of 100 Mbps or greater are needed by 2013 to boost home-based businesses and increase individual entrepreneurialism in general among low-income, elderly and rural populations.

None of these are easy tasks, and many efforts likely will struggle before they fly. None of these results will happen with just broadband networks alone. But broadband is a key element that contributes to success.

It’s not enough to increase new job opportunities, we also must train those who’ve been unemployed for many months how to handle new skills demanded by today’s jobs. A concept moving within the Department of Education called open online learning offers one potential way to achieve this.

The program combines interactive instructional content, multimedia and online tools to create self-paced, industry-specific training programs that anyone one can access online to learn new job skills. This particular iteration of the concept may or may not get funded, yet the core concept holds promise if supplemented with real-time instruction and computer-skills training programs. Better broadband is integral to delivering this type of training to rural and low-income urban areas.

You can’t leave out broadband’s role in preparing our urban and rural youth to work in a global, digital workplace. Bob Cabeza, the executive director of the YMCA Downtown, Long Beach, Calif., describes an after-school program in which he helped create a program that piggybacked on a school district’s broadband for after-school programs, and built digital media labs in 12 of the lowest performing schools in Long Beach. He said:

Youth access technology to create digital newsletters and make movies about science. A group of third graders recently made a video news report about a fire at their school. First graders teach kindergarten kids ABC’s with a movie they made.

This is where education is going. The FCC’s announced eRate reforms are a good first step for improved broadband in schools, but we should expand these programs to facilitate parents’ involvement in the homes. As President Obama has said, parents need to be involved with their kids’ schoolwork at all levels if we are to see advancements in the success of our education system.

Besides making local businesses more productive and competitive, the Administration needs to aggressively embrace the concept of assisting communities use broadband to make onshoring more appealing than offshoring. Cities such as Lafayette, La., Chattanooga, Tenn. and Bristol, Va. have all brought jobs to their respective communities using broadband as one of the main carrots to entice companies wanting to expand facilities or re-locate, along with the promise of good schools, good roads and a high quality of life. Beyond making businesses more competitive, we have to make communities more competitive and on a global scale. Broadband can help us do this.

We must demand more in setting our nation’s broadband goals; broadband speeds for rural America of 4 Mbps as a 10-year goal (so long for so little) threaten to abandon these communities to a ghetto of unfulfilled potential. Even 100 Mbps will soon be scoffed at as inadequate for a world-leading country.

Finally, we must empower local communities. The best thing Washington can do is ask communities “what would you create with a network fast enough to meet current and future needs; how would you do it; who in the private sector would you partner with; how do you ensure financial sustainability? Establish standard criteria and questions to resolve so communities benefit from common technologies, but still develop solutions that meet their specific needs. Return the billions of dollars collected from all of us Americans for the Universal Service Fund on a straightforward path to our communities in a way that enables greater community participation, and leads to a higher return on the investment.

If we could put a man on the moon within 10 years given the limited technology and knowledge available in 1961, then surely we can use broadband to transform our economy throughout America sooner rather than later.

Craig Settles is a broadband industry analyst and Co-Director of Communities United for Broadband and can be found at @cjsettles on Twitter.

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