State governments get inthe broadband act
There are many forces driving broadband innovation and deploymentdemand for data-intensive services, high-profile mergers and acquisitions and an abundance of well-funded start-ups with pioneering technology, to name a few. And, while the industry is hoping that these and other forces provide the recipe for competitive success, there are still a couple ingredients missing: an ample supply of experienced design engineers and strong economic incentives that support buildouts in more rural areas of the country.
Motivated by economic development objectives, the state of Georgia and the Commonwealth of Pennsylvania have introduced programs that have the potential to spark new levels of broadband innovation, substantially increase the broadband footprint and widen the pool of intellectual capital. In both instances, a directive straight from the topGovernor Roy Barnes of Georgia and Governor Tom Ridge of Pennsylvaniahas called for state, business and educational institutions to collaborate on aggressive telecommunications initiatives. In each instance, the state has put up the two most important ingredients to make these initiatives successful: money and a solid commitment.
When one hears about Georgias state-funded broadband and computing initiative, one is first struck by its unlikely name: Yamacraw. Borrowing its name from a moment in Georgia historythe founding of Georgias first settlement at Yamacraw Bluff in 1733the Yamacraw initiative was launched in mid-1999 with a $100 million commitment from the state for a five- to seven-year program.
Its mission is clear: make Georgia a world leader in the design of broadband (high-speed) communications systems, devices and chips. As many high-tech cities are saturated with venture capital money and the cost of living is through the roof, Georgia hopes to show that broadband companies, VCs and young and established design engineers can find new opportunities in the heart of the South.
To be successful, we knew that we had to focus on the job growth of the future, says Herb Lehman, director of research/interim executive director of Yamacraw. This is a known fact, but many states dont act on it or dont make the type of investment or commitment that weve decided to make.
Gaining recognition as a world leader in broadband design will undoubtedly be no small task, but Yamacraw has put together a program that seems to cover all of its bases. The leadership also understands that they cant attract broadband companies without a pool of computer scientists and engineers versed in broadband product design. Conversely, they cant attract needed talent without a critical mass of established and leading-edge broadband companies providing sought-after jobs.
Its like the chicken-and-the-eggwhich came first? If we first create more jobs, students will stay in-state. But, if we have more experienced broadband design students, we could attract more companies, adds Lehman.Technology research
At the heart of the Georgia broadband initiative is the Yamacraw Design Center. Set up to be a hot-bed of advanced research, the Design Center has 46 faculty and 85 graduate students on hand from Southern Polytechnic State University and Georgia Institute of Technology (Tech). Led by esteemed professors from Tech, faculty and student teams actively perform research in the areas of embedded software, broadband access hardware and system prototyping.
The software research team focuses on developing embedded software for telecommunications applications for the personal, handheld, home and enterprise computing markets. The broadband access hardware group is developing highly integrated chipsets and modules for mixed signal, integrated electronic and photonic circuits. And the applications prototyping team works on projects such as voice-cognizant Web browsing and an access network system for interactive video multicasts to desktop computers via either broadband wireless or optical links.
We wanted to make sure our research program wasnt a me-too type of effort, says Joy Laskar, professor and leader of the broadband access hardware group. Our strength is that we work with advanced technology processes and we look at a family of mixed technologies and design platforms. This seems to be the type of research the industry is interested in.
What are the payoffs of having a well-staffed and well-funded Design Center? For one, the state can attract prestigious faculty with in-depth knowledge on everything from IC design to waveguides to optics. The Design Center is also a draw for students looking to work with the latest and greatest broadband design processes. With any luck, they might just be on a team that develops revolutionary technologylike, a gigabit wireless system on a multi-chip module, or system-on-package (SOP). But, perhaps first and foremost, Yamacraw can attract the mix of broadband companies it needs to bring jobs and recognition to the state.
Since its inception, the Yamacraw Design Center has attracted 13 full member companies, including Barco; Broadcom Corp.; CIENA Corp.; Cirrex; Cypress Semiconductor Corp.; EchoStar Data Networks; IDT (Integrated Device Technology Inc.); Movaz Networks; National Semicon-ductor Corp.; Nor-tel Networks Corp.; MicroCoating Tech-nologies; StarCore, an alliance of Agere Systems (the former microelectronics division of Lucent Technologies) and Motorola; and Wi-LAN Inc.
Each time the Design Center gets a new member, not only does the Yamacraw program gain credibility, but the Design Center also gets additional funding and the state gets a commitment from the company to bring new jobs to Georgia. To join, for example, each company is expected to pay a base rate of $25,000 and create 100 professional jobs in Georgia over a five-year period. Some companies, like National Semi-conductor, may decide to pay a higher fee ($250,000) to be a member without making a job commitment.
There is simply no downside to joining the Design Center, says Lehman. A company gets access to a prestigious research team working in areas of broadband design and development that can yield crucial research findings.Membership benefits
There is a list of goodies that comes with joining the Design Center. Member companies get preferred accessibility to students and professors, the ability to identify and guide research, advance knowledge on key research findings and a five-year, royalty-free license to use the Design Centers intellectual property.
But at the end of the day, recruitment is what typically propels companies to join the Design Center. With computer scientists and design engineers in short supply, having preferred access to such intellectual capital is an attractive element.
EchoStar doesnt rely on the research coming out of the Design Center to develop a new product, says Jim Stratigos, vice president and general manager at EchoStar Data Networks, a division of EchoStar Communications. But, what you have here are students becoming versed in areas of prime importance to us. So, both professors and students represent an attractive pool of employees. EchoStar currently has students working at its facilities on a part-time basis, and the company recently hired an engineer who was a former researcher at the Design Center.Looking for breakthroughs
However, there are high hopes that the broadband communications research going on at the Design Center will uncover some significant breakthroughs. Research at the Yamacraw Design Center has the potential to make a broader impact on the industry, says Lisa Pierce, vice president and research leader of Converged Network Services at Giga Information Group Inc. However, they cant be doing research for researchs sake. They need to focus on very practical, short-term improvements in technology.
Joy Laskar understands Pierces concerns and points to a recent development that shows the Design Center can have an impact on a companys business plan. In the case of National Semiconductor, the Design Center had been conducting research on ICs for wireless transmitters. As the research moved into the prototype state, students from the Design Center joined National Semiconductor as full-time interns. Now, a new division has been formed within the company and this research may just give rise to a new product area.
In this scenario, once a company takes general research and wants to apply it to its own unique implementation, the five-year, royalty-free license doesnt apply. National Semiconductor had to negotiate a specific contract with the Design Center for more focused development.
Yamacraw is off to a great start. To date, 13 member companies have joined the Design Center, 40 new faculty have been hired to teach advanced broadband courses at Georgia universities and the State has a commitment from member companies that 1,450 jobs will be created for computer scientists and computer, electrical and software engineers. And, when one looks at the level of broadband research and student training going on in Georgia, Yamacraw may well have a measurable impact on the rest of the broadband industry.Creating incentives for broadband expansion
Back in the Keystone State, Gov. Ridge is intent on making Pennsylvania a global leader in E-commerce. One key part of this strategy has been the widespread deployment of broadband telecom infrastructure in both urban and rural areas. The commonwealths approach can serve as a model for other states that desire an extensive public network.
Six years ago, we didnt even know where and what type of telecommunications infrastructure we had, says Valerie Long, assistant director of network planning and support services for Pennsylvania. And, we needed input from citizens on how the states infrastructure should be developed.
To overcome this disadvantage, the state worked with the University of Pittsburgh to create a technology atlasa customizable, real-time, GIS-based technology map showing high-tech data, voice and video communications resources available throughout Pennsylvania. Once this atlas was complete, companies could find the best locations for conducting business, and the Ridge administration could now see what telecommunications advancements were needed for statewide economic development.
The state also sponsored a Telecom-munications Acquisition Conference in 1997. This forum encouraged input from public citizens and private business, helping formulate the strategy for making future telecommunications investments.Putting all its eggs in one basket
Once a clearer picture was in hand, the state made a gutsy move. Instead of parceling out its telecommunications projects among 22 separate contractorsas it had done in the pastthe state decided to offer a five-year contract to one prime vendor to help build a statewide, advanced telecommunications network, an effort valued at $228 million.
This is a huge book of business we put out there, says Thomas G. Paese, state secretary of administration. We didnt just want the lowest price; we wanted to see what value-added packages the telecommunications provider could throw in.
Once the bid went out, two consortia went after the business: one led by Adelphia Business Solutions (ABS), a subsidiary of Adelphia Communications, and one led by AT&T and Verizon Communications, formed through a merger of GTE and Bell Atlantic. After a lengthy process that cost the winner several million dollars, ABS won the contract, along with an impressive list of partners which include EDS, FORE Systems, Qwest, Lucent, Verio, Exelon (a PECO Energy Company) and Suburban Cable (now Comcast).
Its not often you get more value at less cost, but, in a nutshell, thats the solid return Pennsylvanians will receive from this telecommunications contract, adds Paese.PA gets wired for the future
Why is this such a good deal for Pennsylvania? The ABS consortium committed to provide state-of-the-art telecommunications services for state government offices with tier three pricing, a lower rate than the state could get on the open market.
A diverse, redundant fiber optic network will serve 2,450 government locations, and of those, 450 locations will have fiber to the curb. The network will consist of core ATM switching at six locations for data services, seven primary digital switching sites around the state for voice, Sonet rings with speeds up to OC-48 around Harrisburg, and the latest DWDM technology.
According to Paese, the ABS consortium threw in several value-added extras that helped cement the deal. For example, ABS has pledged $100 million in matching funds, as part of the states Key-Net initiative, to help link the public network to nearby industrial parksa convenient way for businesses to connect into the telecommunications system.
Pennsylvanias approach is unique in another way. Unlike other state governments that build or lease private networks, the contract asked the ABS consortium to build a public network that would help drive broadband all over the state. This approach not only helps public officials get connected, but in the long run, promises to benefit all citizens.
We wanted to become the anchor tenant, the big customer that would give a telecommunications provider the economic incentives to build out into even the most rural areas of the state, says Long.
Under this contract, for example, the small city of Hazelton will now have a fiber optic network with its central office in nearby Scranton. If we didnt have the commonwealth of Pennsylvania giving us an incentive, we certainly wouldnt have built out Hazelton, says Bob Guth, vice president, business operations at ABS.
As a matter of fact, this contract gives ABS a way to gain a foothold in territory that has traditionally been served by AT&T and Verizon Communications. As ABS builds out the public network for state government, it will mobilize its direct sales force to visit with private businesses in each new area to sell its services. While ABS has a seemingly cozy advantage, ABS Guth stresses that once the network is in place, citizens do indeed have a choice to select whichever telecommunications provider they want.Only time will tell
With both initiatives in the beginning phases, private business, educational institutions and citizens are waiting to see what measurable impact the programs will have on the local economy. Looking at the bigger picture, its reminiscent of how government can impact the rate of technology adoption and growth by leveraging its influence and deep pockets.
Also, success in Georgia and Pennsylvania could bring with it benefits for the entire broadband industry. Because while there might be demand for broadband, the industry needs a growing supply of broadband engineers and added incentives to lay fiber into less populated areas of the country.