"Ubiquitous broadband deployment in America is needed to stimulate economic activity and to improve national productivity while advancing economic opportunity for more Americans."

Those words, spoken by Federal Communications Commission Chairman Michael Powell in October of last year, clearly articulate the relationship between broadband and economic prosperity. It served as a call to corporate America for the need for broadband services to literally move and improve the companies and the communities of this country.

Big deal, you might say. I’m a manufacturer, or a distributor, not a tech company, and I’ve got little need for broadband. Well, you might not now, but down the road you very well could. As the Internet increases its importance in more business operations, companies are going to need to be able to move data quickly.

What is this broadband thing?

Just what is broadband? In today’s lexicon it certainly implies high-speed capability and reliable Internet access. In fact, the FCC defines Advanced Telecommunications Capability as telecommunications infrastructure capable of delivering a speed of 200 Kilobits per second (kbps) in each direction. The Commission defines high speed as those services with over 200 Kbps capability in at least one direction.

In 1998, there were approximately 375,000 subscribers to advanced services, consisting of 350,000 subscribers to cable modem service as provided by the cable television providers and 25,000 to DSL (Digital Subscriber Line) service provided by the telephone companies.

By Dec. 31, 1999, there were 2.8 million subscribers to high-speed and advanced services, with 1 million subscribers to advanced services. Of the 1 million subscribers, approximately 875,000 used cable modems and 115,000 used DSL service with the balance using other media, such as wireless or satellite.

By the end of 2000, there were 7.1 million high-speed lines in service. Of those, 5.2 million were residential and business subscribers, as reported by the FCC. By Sept. 30, 2001, there were approximately 9.8 million subscribers to high-speed services, with 6.4 million using cable services and 3.4 million using DSL service.

Who is using these services? Residential and businesses make up 80 percent of customers, with government users making up the difference. According to the Yankee Group, 68 percent connect by cable, while only 31 percent connect via DSL.

Why the cable control of broadband?

The cable dominance is most clearly demonstrated by the unfortunate demise of Excite@Home in 2001.

This company alone had 2.7 million of the cable industry’s 6.4 million broadband customers. However, when the company filed for bankruptcy in last year, FCC Chairman Powell wrote to Judge Thomas Carlson of the U.S. Bankruptcy Court, Northern District of California.

Powell urged Carlson to "provide for an orderly transition rather than a precipitous shutdown in order to avoid disrupting broadband service to a significant percentage of U.S. customers."

Chairman Powell also stated in his Nov. 29 letter that "these customers, including numerous schools, libraries, public institutions and residential consumers, would be left without high-speed Internet access unless and until their cable operator completes alternative arrangements or they initiate service with another high speed provider if one is available. This would be highly disruptive and could harm broadband deployment, contrary to the goals of Congress and the FCC."

In other words, Powell predicted problems in other companies picking up the slack.

In fact, one cable provider, Cox, even paid $160 million to Excite@Home during the bankruptcy proceedings to keep the 500,000 broadband customers that Cox had through Excite online until Cox could turn on its own broadband network. Even though the cable side of the broadband equation had its challenges, the year 2001 also saw three high-speed telephone-based Internet providers bite the cyberdust as well.

What is the role of business in the broadband issue?

Consider the response of the United States Chamber of Commerce, representing more than 3 million businesses and organizations, as stated in a Dec. 19, 2001, letter to the NTIA.

"Internet connectivity has already improved productivity, generated new jobs, facilitated new channels of commerce and reduced prices. Broadband and advanced telecommunications services hold the promise or further such benefits as options like teleconferencing, telecommuting, distance learning, remote monitoring and distance medicine to name a few, come more on stream."

They further predict that "future broadband networks will probably be built with private invested capital."

Intel Chairman Andy Grove stated in the Dec 10, 2001 issue of Fortune Magazine that "broadband deployment is a strategic issue that has an impact on U.S.security and the growth of the U.S. economy."

So what should corporations and communities do to address these issues?

I would recommend that companies make their expansion needs and plans known to their telecommunications/cable providers in an organized fashion and format through their respective chambers of commerce, who in turn can provide specific data to the FCC, Telecommunications and Internet providers and other bodies instrumental in Broadband Policy and Deployment.

In fact I would challenge the United States Chamber of Commerce to collect and assemble this data in a fashion that would identify potential corporate investment in rural and inner city America if the broadband access were present.

Jim Beatty is president of NCS International, a consulting firm specializing in telecommunications. You can contact him at (402) 572-9292, or at

jbeattyncs@aol.com.

The Broadband Difference

The time to download vs. Type of Connection Time to Download

Dial-Up 23 minutes

ISDN 10.4 minutes

DSL 54 seconds

T-1 54 seconds

Cable Modem 4.2 seconds

Fixed Wireless 54 seconds

Mobile Wireless 10.4 minutes

Source: Comments from the Georgia Rural