NextGenWeb is continuing its spotlight on how broadband is powering state and local governments. We were able to catch up with Sue Murray, the mayor of Greencastle, Indiana, for a phone interview to get a better understanding of how she is utilizing broadband in her community to create jobs and deliver services more efficiently. Mayor Murray was kind enough to provide us with some slides outlining broadband in her community. Click below to view the slides and listen to the interview.
by Jessica Milano
Senior Fellow, Democratic Leadership Council
With the nation facing record deficits, policymakers need to focus on what can be done outside of tax cuts and spending hikes to jumpstart the nation’s economy. One thing government can do is create an economic climate for business to invest, innovate and hire. That is a key finding of a report I released for the Democratic Leadership Council earlier this year titled, “Where Jobs Come From: The Role of Innovation, Investment, and Infrastructure in Economic and Job Growth.”
The third key finding of the report, driven by economic research and analysis, is that job creation is directly tied to business investment. For the purpose of this posting, I would like to focus on one area where investment has had and will continue to have an impact on job creation– broadband.
The broadband industry has been a lighthouse during this economic storm. According to a report released by Broadband for America, while business investment (nonresidential private investment) declined by 18.1 percent during the recession, broadband investment declined by only 3.3 percent buoyed by over $100 billion investment by AT&T and Verizon in wireless and wireline networks. This is significant because, as I point out in my report, investment in information and communication technologies (ICT) like broadband contributed almost one percent (0.8%) to average annual real GDP growth in the United States from 1994 to 2000.
But what does all of this investment in innovation and broadband infrastructure mean for jobs? A great deal, in fact. There are two specific ways in which this investment creates jobs. Direct jobs in the industry itself through developing new technologies, building the infrastructure, and laying broadband lines. And indirectly through the increased opportunities that are available by having access to a 21st century communications network. Application developers for smart handsets are one example as are new companies like Zip Car which rely on customers’ access to mobile broadband.
Several studies have shown that fast, reliable broadband investment improves the operational efficiency of businesses, making it easier to reach new markets, grow business, and hire additional employees. One study in particular, released by the Brookings Institution, found that for every three million new lines deployed, nearly 300,000 economy-wide jobs are created. This is particularly important for small businesses and businesses in small communities.
While this post has highlighted the enormous amount of private investment from broadband service providers, it is worth noting that innovators, entrepreneurs, and small businesses create up to two-thirds of new jobs annually. It is these types of jobs, that rely on broadband, that will continue to lead us out of this current economic downturn and into a greater economic future for America.
The FCC released a working paper on December 6, based on results from a survey conducted in April that set out to understand customer’s feelings toward their broadband service. The new paper found that 93% of broadband users in the United State are “very satisfied” or “somewhat satisfied” with their broadband service. This may come as a surprise to those who have heard certain groups try to paint a picture of doom and gloom for the American broadband industry (which is one of the reasons we take issue with “rankings” like those put out by the OECD).
As we’ve said before, the broadband industry is a light in an otherwise dim economy. This paper shows that not only are America’s broadband providers creating jobs and powering the economic recovery, but their customers are rewarding them with high satisfaction levels seen in few other industries.
NextGenWeb recently sat down with George Gilder, Senior Fellow at the Discovery Institute, Editor in Chief of the Gilder Technology Report, and contributing editor to Forbes magazine (for a complete bio, click here). Gilder is a prominent American economist who has focused on the technology and telecommunications sectors for more than two decades. His book, “Life After Television,” was an incredibly accurate prophecy on the future of computers and telecommunications. Gilder has recently been writing and commenting on telecommunications policy, and how it effects economic growth and job creation.
Gilder’s overarching theme is investment, and how increased regulation, specifically the reclassification of broadband as a Title II “telecommunications service”, would harm private investment. In the interview below, Gilder discusses his vision for the future of the Internet, how new applications will require large amounts of bandwidth, and how private investment will be the primary driver to ensure that high-capacity broadband networks continue to be built out across the United States.
Click below to hear more of Gilder’s vision.
Broadband policy thought leaders from government, industry, and think tanks gathered to address key broadband policy challenges yesterday at the Phoenix Center Telecom Symposium. Examining the promotion of jobs and innovation, participants expressed their views on the best policies for a thriving Internet ecosystem from a global perspective.
Blair Levin, the leader of the FCC’s National Broadband Plan, now a Fellow with the Aspen Institute, delivered the keynote address. Levin urges that America’s future rests on what he calls a ‘high performance knowledge exchange platform.’ Noting that our broadband technology revolution is powering changing information exchanges and the economy, even in traditional job sectors like manufacturing and agriculture, Levin wants to focus on improvement and diversity. “Most things in internet ecosystem doing very well. We don’t need massive government intervention.”
Dr. Michael Mandel of the Progressive Policy Institute and Chief Economist Visible Economy LLC, drove home a vivid point about the direction that broadband policymakers should take when it comes to regulation, after reminding attendees that the communications sector is a main driver of economic growth. “It’s simple. Do you want to see investment increase or decrease by as much as 20%?”
Raising investment capital is a must in order to launch new enterprises, or facilitate growth in existing businesses, within the telecommunications and broadcasting field. This can pose a challenge especially for small, minority and/or female owned businesses. The FCC is seeking to address this tomorrow in an event hosted by the their Office of Communications Business Opportunities (“OCBO”). Two panels, including government representatives and private sector finance experts, will present capitalization strategies and provide productive feedback on participant’s individual business plans.
The event is free of charge and will also be livestreamed at http://reboot.fcc.gov/live
Friday, November 12
9:00 a.m. - 5:00 p.m.
FCC Headquarters, Commission Meeting Room
445 12th Street, SW
Washington, DC 20554
Although the American economy is suffering and facing a slow climb to recovery, broadband is one sector of the economy that challenges our modern state of affairs. Broadband actually comprises a significant and vital component of our current economy, holds the key to our economic recovery, and offers a solution to growing employment. Here’s how:
1. The broadband industry invests roughly $70 billion annually, which creates jobs not only in the building and maintenance of infrastructure, but also indirectly through Internet jobs like online advertising, entertainment, social networking, e-commerce, and more.
2. The converging broadband sectors of telecom, media and IT lead U.S. GDP growth, adding nearly $900 billion annually and expanding at a rate that is two to five times faster than the overall U.S. economy
3. Broadband investment results in robust employment effects. Conversely, according to ITIF, a reduction in investment of just 2 percent by the broadband services industry would eliminate between 24,000 and 31,000 jobs.
4. Massive broadband investments are necessary to meet demand and growth in IP voice, data, and video.
5. Broadband investments provide the infrastructure for additional investments in the creation and implementation of advances in the healthcare, education, and energy sectors.
6. Inspiring broadband adoption will continue this trend. A 2008 report by Connected Nation found that just a seven percentage point increase in broadband adoption could result in the creation of 2.4 million jobs.
7. A 2009 report by ITIF estimated that a $10 billion investment in broadband would produce as many as 498,000 new jobs.
8. Vice President Biden stated that Recovery Act funding of broadband technology “will create jobs across the country and expand opportunities for millions of Americans and American companies.”
9. Broadband even helps in rural economies by improving business processes and strengthening access to new markets.
10. Broadband also provides indirect support for those suffering during the economic downturn. According to a 2009 Pew Internet release, approximately 88 percent of Internet users “have gone online to get help with personal economic issues that have arisen in the recession and to gather information about the origins and solutions to national economic problems.”
Seize the opportunities enabled by broadband! That was the theme that rang through the diverse speeches and panels at Rainbow PUSH Coalition’s 2010 Media & Telecommunications Symposium. The symposium serves as both a celebration of rapidly evolving digital world, but also as a platform for government, academics, industry, and community to come together to discuss the important policy issues around these new technologies.
FCC Chairman Julius Genachowski kicked off the event with speech encouraging that we approach the challenges in our current economy with the opportunities provided by broadband. He referred to the Pew study that shows that one third of those with access to broadband do not adopt, before urging “we need all Americans online!” Genachowski cited several applications of broadband that are helping to bridge the digital divide – including jobs, entrepreneurship, and e-government, the last of which we will be focusing on all week here at NextGenWeb.
Consumers turned out to be the break-out theme of yesterday’s IPI Communications Summit. As Veronica Bloodworth, Vice President, Network Program Management for AT&T, said during her introductory keynote address “It’s the customer’s world, we’re just living in it!” Bloodworth went on to demonstrate how AT&T is working to aggressively advance products and services for today’s and tomorrow’s broadband world.
Following a panel of experts describing the latest in mobile health again driven by consumer use and demand, Bret Swanson took the stage to deliver a keynote titled “Dynamism vs. DC.” Describing entropy economics, Swanson went on to show relationships between innovation and entrepreneurship in our current “bandwidth boom.” The numbers are startling around consumer bandwidth consumption. YouTube alone streams 7 terabytes a minute, the equivalent of the entire Internet in 1992, and streaming video now accounts for 51% of all web traffic.
So what does this bandwidth boom mean? Swanson applauds investments in broadband and fiber and hopes that policymakers realize the importance of managing quality and bottlenecks to best serve the voice and video demands of consumers. As we begin to transport higher volumes of traffic at higher rates, delay and quality of service will be extremely important.
Watch the video below for more from Swanson or check out some of the resources that he cited in his presentation:
At a breakfast panel on the Hill yesterday, the Democratic Leadership Council hosted a conversation about “What Can Washington Do to Spur Business to Invest $1.8 Billion Currently Sitting Idle?”. Over coffee and pastries, Ed Gresser, DLC President, Hal Singer, Navigant Economics, and Rob Atkinson, of ITIF, discussed US business investment and the economy.
Ed Gresser addressed the numbers behind the current economic crisis and reasons for the slow climb to recovery. There are currently 15 million people out of work and the economy is growing at a sluggish pace. The reason, he said, is that people are not spending enough money to sustain the recovery. Gresser suggested we need creativity and energy in helping the economy move faster in the right direction. But what are the policies that will help us create more jobs? Broadband growth is a good start!
Last to speak, Rob Atkinson also jumped on the importance of broadband during the current state of the economy. Broadband is one key area where growth has occurred and it has the potential to stem even further. Investments into broadband are important for the reason that it is a platform technology. If better broadband is created, better applications will follow.
To hear more discussion about the economy and the effects broadband has on it, watch the video below.