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DLC | Model Initiatives | May 4, 2007
Universal High-Speed Broadband Access


New Dem Play | Ensuring universal access to affordable high-speed broadband
Where It's Working | Virginia, Tennessee, Maine, New York, California, and others
Players | Governors and state legislators

More State Economic Development Plays

Today, the economy is increasingly coordinated and reliant on high quality broadband Internet access for everyday operation. But the uneven distribution of broadband access across the country has made it impossible for many individuals and businesses to take advantage of new opportunities and succeed in today's global economy.

The transition to broadband faces a difficult initial hurdle. Since broadband costs roughly twice what dial-up Internet costs, many customers are unwilling to make the transition unless there is enough broadband-only content and applications to make it worth the increased cost. Only approximately 24 percent of households that could have broadband access actually subscribe. Internet providers, on the other hand, are unlikely to invest the money in broadband specific content unless there are enough subscribers to make the investment worthwhile. Broadband deployment is a particular challenge in rural areas, where distances between homes are greater and costs are higher. Some Internet service providers simply do not see the profitability in installing broadband Internet access where infrastructure development is expensive, and only one quarter of users will pay extra for the service.

Whether citizens and businesses have access to affordable high-speed broadband is one factor in determining whether America will remain competitive in today's global economy. More and more applications that are now being used by small and large businesses require broadband access, including videoconferencing, video on demand, and VoIP, as will most new applications currently in development. During the 1990s the United States was a leader in broadband adoption, but since 2001, when we ranked 4th in broadband adoption rates, we have dropped significantly to 12th. And no matter what study you look at, the United States continues to fall in worldwide broadband rankings.

"If you're a kid growing up in South Korea, your Internet access is 10 times faster at half the price than a kid growing up in the South Bronx."
-- Gov. Eliot Spitzer, New York

In addition, the current broadband access in the United States tends to be slower and less capable than in many other industrialized nations. According to estimates by the Organisation for Economic Cooperation and Development (OECD), the U.S. price-per-megabit of connection speed is more than 10 times as high in the United States as in Japan.

During the 2004 campaign, President Bush set a goal of universal broadband access in America by 2007, but there has been little follow through at the federal level since the election. The United States is currently the only industrialized nation without a national policy for promoting broadband. In the face of federal inaction, however, state and local governments are stepping up to the plate to resolve this dilemma and allow their communities to succeed in the flat world economy. Once this hurdle has been cleared, businesses can more reliably provide telecommuting opportunities to employees, expand content they provide, and more effectively partner with companies around the country and around the world.

In 2003, under the leadership of then Gov. Mark Warner, the Commonwealth of Virginia formed the Mid-Atlantic Broadband Cooperative (MBC) - a not-for-profit cooperative, in partnership with the U.S. Department of Commerce Economic Development Administration, the Virginia Tobacco Commission, and others from the private sector, government, and the non-profit community - in an effort to revitalize the economy of Southside Virginia. Funded by grants from the U.S. Department of Commerce and the Virginia Tobacco Commission, the MBC's mission was to build more than 700 miles of new fiber optic infrastructure to connect five cities, 20 counties, and 56 industrial parks in the region. This fiber build out was completed in late 2006 and is estimated to provide high speed Internet access to nearly 700,000 Virginians and more than 19,000 businesses who do not already have such access. This initiative is also estimated to create 1,560 new jobs, $70.2 million in new wages, and $143 million in projected new investments. Furthermore, these new technology-based jobs are estimated to carry wages 54 percent higher than the average wage rate in Southside Virginia.

Gov. Tim Kaine has expanded on Warners work by setting a goal of having broadband access to all businesses by 2010. In order to achieve this goal, he worked with Delegate James Scott and the legislature to create the Office of Telework Promotion and Broadband Assistance, which will help facilitate construction of the so-called last milebroadband technologies throughout the state.

In Tennessee, a state that ranks 37th in broadband access, Gov. Phil Bredesen worked with the State Legislature in 2005 to create the Tennessee Broadband Task Force. Chaired by Sen. Roy Herron (D) and Rep. Mark Maddox (D), the task force released its final report in early 2007. Recognizing how critical broadband is to the states economic development, health care, and education, they called for a public-private partnership to develop a statewide plan to promote more access and usage of broadband services across the state, with particular attention to rural areas.

In 2006, Gov. John Baldacci and the Maine Legislature created the ConnectME Authority to expand broadband and wireless services throughout the state. Under the legislation, tax reimbursements will be available for infrastructure investments made in areas that are presently unserved; the Connect ME Authority will receive $500,000 from the Universal Service Fund to assist Maine people in expanding broadband services; the Authority will obtain USDA rural development money to advance broadband deployment in Maine; and it will track investments made in Maine and continually assess the availability of services in the state.

In New York, newly elected Gov. Eliot Spitzer has launched a Universal Broadband Initiative that will ensure cities and rural areas in upstate New York have access to affordable, high-speed Internet service. Spitzer plans to study the current state of access across the state, and then begin contracting with companies in the private sector to provide high-speed service at affordable rates. Finally, in California, Gov. Arnold Schwarzenegger has appointed 21 technology leaders to a Broadband Task Force to help remove barriers to high-speed cable and wireless, and will soon make $460 million available for this project, much of which comes from education bonds approved by the voters in 2006.

The benefits of universal affordable broadband access are tremendous. A 2001 report by the Brookings Institution estimated that widespread adoption of broadband could add $500 million to the national economy and create 1.2 million jobs per year. In addition, cities can benefit from telecommuting by reduced traffic congestion. Rural areas can benefit from both tele-medicine and tele-education, which can provide top-notch services to underserved areas. Tele-medicine, which can be administered from a local clinic, or eventually from home, can give patients access to a specialist who can review medical information provided from the local clinic with the information provided through a secure online connection. Tele-education can allow rural high schools to receive specialized training without the need to consolidate. Students can receive college credit from public and private institutions by participating in class lectures online. State and local government investment in broadband Internet access can also improve the way citizens interact with all levels of government by increasing the accessibility and efficiency of government services. The more access people have to affordable, high-speed Internet, the more governments can move their resources efficiently by providing convenient government services online, and allowing forms, parking tickets, and taxes to be filed electronically. Police and other safety officials can upload large reports and provide streaming video of safety notices or warnings online.

The question in the end is not whether this country will eventually have widespread access to broadband. That is virtually certain. The issue is how soon fuller broadband access will be available, and who will catalyze it. A wait-and-see approach means America will lag behind its global competitors. If state and local governments step up and take action, our economy, our government, and our citizens will be the winners.

Resources for Action

Connected Nation
http://www.connectednation.com/

Mid-Atlantic Broadband Cooperative
http://www.mbc-va.com/

Virginia Office of Telework Promotion and Broadband Assistance
http://http://www.otpba.vi.virginia.gov/index.shtml

Act Creating the Tennessee Broadband Task Force
http://tennessee.gov/sos/acts/104/pub/pc0413.pdf

Maine's ConnectME Authority
http://www.maine.gov/connectme/

Additional Reading

Crandall, Robert W. and Charles L. Jackson, The $500 Billion Opportunity: The Potential Economic Benefit of Widespread Diffusion of Broadband Internet Access, July 2001.
http://www.att.com/public_affairs/broadband_policy/
BrookingsStudy.pdf#search=%22brookings%20%22
The%20%24500%20Billion%20Opportunity%22%22

Boosting Demand for Broadband
DLC Model Initiatives
http://www.dlc.org/ndol_ci.cfm?kaid=139&subid;=272&contentid;=251952

Contacts

Jason D. Newman
State and Local Policy Director
Democratic Leadership Council
600 Pennsylvania Ave SE, Suite 400
Washington, DC 20003
(202) 546-0007
E-mail: jnewman@dlc.org



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