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The Golden Egg?

December 8, 2005 By

Though broadband normally gets cast as a tool of consumerism, some observers see broadband as a productivity elixir. Perhaps nowhere is this elixir more needed than in rural local governments' efforts to revitalize their economies, often devastated by layoffs as companies close up shop.

But even as officials investigate their options, they confront an unpleasant economic reality: Getting broadband services from incumbent telecommunications companies is proving difficult because those companies, after examining potential business for their services, don't see a sufficient return on their investment.

As a result, the answer is usually "no" when rural leaders call on incumbent telecommunications providers to build out broadband infrastructure to their cities and towns. Nowadays, rural governments ask a different set of companies, such as EarthLink, Tropos Networks, Azulstar Networks or even Google, to bring wireless broadband to their cities and towns.

These companies gladly say, "Yes."

To these local governments, broadband is the new foundation on which to build, and economic development efforts across the country have come to rely on communitywide broadband networks.

In some cases, such networks are wired. The Click! Network in Tacoma, Wash., runs on Tacoma Power's SONET-based carrier-grade network with a redundant, fiber architecture that extends throughout Tacoma, providing businesses with local point-to-point services.

The Utah Telecommunication Open Infrastructure Agency (UTOPIA) is a consortium of 14 Utah cities that deployed and now operate a fiber-optic network that serves approximately 140,000 businesses and households.

In other cases, cities such as Rio Rancho, N.M., and Cerritos, Calif., built wireless networks through partnerships with the private sector, partnerships made possible because of inexpensive and easy-to-deploy wireless infrastructure.

The problem many communities encounter when jump-starting economic development is how limited existing broadband infrastructure can be. When a community looks to lure telecommuters and teleworkers, they must make sure these 21st-century workers can rely on a network that supplies sufficient bandwidth -- upstream and downstream -- to support true telework applications.

In the United States, the FCC defines broadband as telecommunications services of 256 Kbps or higher. This isn't good enough, according to some sources, who argue that true telework requires at least 350 Kbps, upstream and downstream.

The Chicken or the Egg

Because of widespread layoffs in rural areas, people leave in droves to search for economic opportunities elsewhere.

"There are just no jobs where they are," said Chuck Wilsker, president and CEO of the Telework Coalition, a nonprofit entity that promotes telework and telecommuting, and addresses policy issues, such as broadband Internet access, that impact telework and telecommuting. "It's about bringing jobs to people, instead of bringing people to jobs."

AAA and Office Depot have outsourced call center duties to virtual call centers staffed by people across the nation, Wilsker said, and JetBlue Airways employs 800 to 900 ticket agents, all of whom work from home.

Wireless broadband networks can be lifelines for rural communities, he said, because companies will relocate facilities such as call centers to rural areas if those areas have broadband Internet access. In some ways, the situation mirrors the age-old argument: What came first, the chicken or the egg?

"They [incumbent telecommunications providers] say, 'If you can show us there will be enough business for us, then maybe we'll put broadband services in,'" Wilsker said of the dilemma facing local governments. "Then you have the businesses saying, 'If you had broadband, maybe we'll come.' So what's going to happen here?"

Alternatively, incumbents seem well aware of the problems facing rural communities that want to invigorate economic development and need broadband to do so.

"We've been trying to push out DSL as far we can, economically," said Link Hoewing, vice president of Internet and technology policy at Verizon. "Obviously it is distance-limited."

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