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IN THE LOOP: Where’s broadband?

Wed, 10/31/2007 - 8:10pm
Thomas G. Robinson, Executive Vice President, CBG Communications Inc.

Back in the early ‘90s, “Where’s broadband?” was akin to asking “Where’s Waldo?,” because provision of residential broadband services was difficult to find in a sea of dial-up connections. Now, though, the NCTA indicates that cable modem service is available to 94 percent of all U.S. households. DSL providers also claim high availability rates, and then there are seemingly endless Wi-Fi hot zones and full city-wide Wi-Fi builds proceeding in some locales. At first glance, it would seem that nearly everyone should be able to successfully access a broadband connection.

Thomas G. Robinson

The key word, though, is “successfully.” In a number of cases, access to broadband is still hampered by a lack of availability. As you travel throughout the U.S., especially rural America, you can hear the cries of frustration from residents, businesses and city officials. They can’t get commercial wireline or wireless providers to extend service, because the low household density in their area creates a payback that is longer than the commercial, Wall Street-focused business model will allow.

It is truly ironic, then, when some of the rural local governments subsequently consider government-sponsored wireless networks, that there may be significant action at the state level to block a locality’s ability to pursue such initiatives. As local governments who have testified in front of state committees on such initiatives have indicated, they would be happy in many cases not to have to pursue broadband network development themselves and would welcome competition into the market, but they can’t even get a single commercial provider to offer service to low-density areas.

The House Telecommunications and Internet Subcommittee recently began developing a bill called the Broadband Census of America Act to try to finitely define where broadband availability is still an issue. If it really is only 6 percent of the American population, it must be a massive amount of land area that encompasses the 6 percent, based on reports from local governments and their residents all across the country.

It’s important to note that the need for broadband is not any less in rural America. In fact, the need may be greater because of the critical role that broadband is playing in economic development. A landmark study published in February of 2006 as part of the National Technical Assistance, Training, Research, and Evaluation Project (Number 99-07-13829) for the Economic Development Administration of the U.S. Department of Commerce, indicates quite clearly that broadband access enhances economic growth and performance. This means that broadband availability can help stimulate the economy in rural areas, especially where such areas may be moving away from traditional agricultural or manufacturing-based businesses. These areas must then look at developing or attracting other types of business and industry, including those that must have high-speed Internet access and other data communications.

Additionally, as commuters in metro areas continue to move farther away from the core city center, thus elongating commutes, getting high-speed broadband to more remote locations can offset problems and stimulate rural economies by increasing the ability to telecommute and increasing the capabilities of entrepreneurs to develop small businesses in those locales.As another issue, in the areas where broadband services, including multiple competing services, are available, the question remains why the adoption rate isn’t higher. Some of this stems from a potential consumer’s price/value assessment or the affordability of the broadband service. Adoption rates clearly climb as prices fall. For example, some of those at lower socioeconomic levels largely rely on their cell phones for voice service and thus don’t have telephone company landline connections. Rather than install a landline so that they could also obtain DSL services or add to their cable TV package to achieve cable modem services, they have come to rely more and more on the slower speed broadband over cellular connections that they can obtain cost-effectively via their cell phone.

Another critical factor related to adoption is understanding the benefits of being able to access broadband services and, more simply, how to use the service, including computer literacy. If Congress wants to improve the rate of broadband adoption as well as availability, then it might think about pursuing a companion Broadband Education and CPE Distribution Act, wherein it seeks to make broadband access devices as affordable as phones and make computer literacy training widely available.

Ninety-four percent availability is admirable, but it’s always the last few percentage points that are the toughest. Getting 90-plus percent adoption (much like you have when you consider the combination of wireline and wireless telephone) could prove even tougher.

robinson@cbgcommunications.com

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