High-speed fiber-optic cable ring impact will be far-reaching—part 2

This is the second of three articles on the need for a high-speed fiber optical network in northern Illinois.

In part one of this series, we talked about the City’s proposal to light the fiber-optic cable ring in Rockford and why this effort is important to the competitiveness of businesses in the region.

We likened high-speed communications today to a “highway” for the Internet. If a standard 56K connection is similar to a two-lane highway, a fiber-optic connection is roughly equivalent to one that’s nine miles wide. That’s a phenomenal difference and a huge potential advantage to communities and nations that figure out how to adopt it quickly. Imagine moving your business from a two-lane highway on one side of town to a new one on the other side that’s virtually jammed with traffic nine miles wide—and getting busier by the second. That’s the opportunity.

In the past, this country has been willing to commit its resources to the construction of canals, railroads, and superhighway systems. Will we be willing to do the same thing for broadband (approximately 1 million bits per second and higher) deployment? And will we decide to do it soon enough to make a competitive difference? When we were digging the Erie Canal and laying tracks for the first railroads in the 19 century, we were part of a domestic market that was then fairly insulated from foreign competition (except, perhaps, on the East Coast) because of the high costs of transportation and the difficulties of distribution. That’s no longer true. Today, money and services move from country to country, electronically, in less than a heartbeat.

Hindsight is always 20:20. Yet, according to business guru Peter Drucker, “Every few years throughout Western history, a sharp transformation has occurred … People born into … [one] world cannot even imagine the world in which their grandparents lived and into which their own parents were born. Our age is such a period of transition.” He’s referring, of course, to global communications and, in particular, to the power of the Internet.

Recent broadband studies

Other Americans have jumped on the same bandwagon. Former FCC Chairman Powell maintained that the “widespread deployment of broadband infrastructure has become the central communications policy objective today…” Anyone interested in his remarks should go to the recent FCC report to Congress, “Availability of Advanced Telecommunications Capability in the United States.” FCC Commissioners worry that broadband is not being deployed rapidly enough in the U.S. when compared to other parts of the world.

The report points out that countries such as South Korea, Japan, and Canada are already well ahead of us in the race to provide low-cost broadband connectivity. “Consumers in other countries…get so much more bang for their broadband buck,” FCC Commissioner Copp has observed; and another of his FCC colleagues reports that the “current definition of ‘first-generation’ broadband [in the U.S.] is woefully out of step with [that of] the global leaders …” (The FCC, by the way, defines broadband as lines that support 200 Kbps +. In Japan and South Korea, the typical deployment is 8-10 Mbps.)

The Department of Commerce recently released a study titled “The Nation Online: Entering the Broadband Age.” This examines “the use of computers, the Internet, and other information technology tools by the American people” according to U.S. Census data. It provides detailed statistics on the ways that broadband and information technologies are transforming our lives, and it makes the business case for high-speed access technologies.

If there’s good news in the report, it’s that broadband deployment in the U.S. more than doubled between 2001-03. The bad news is that this increase now makes us 11 in the world. (The leaders are South Korea and Canada.) We’re not doing so well in terms of broadband affordability either. With an average cost of $29.43 per Mbps, we’re sixth in the world in this category. (Japan’s prices average $1.57). And over the three years of the study, it seems, we’ve fallen farther and farther behind.

Future consequences?

Closer to home, the Illinois Rural Affairs Council has released a study that reinforces the position of the FCC. It’s called “Illinois Online: Recommendations for Universal Broadband Access,” and it argues that state businesses will be successful in the future only if they “manage supply chains and inventories with maximum flexibility and cost-effectiveness, target markets with precision, serve customers with a combination of efficiency and care, and continuously develop new products and services that adjust to rapidly changing tastes and shifts in demand.” State businesses, the report points out, are “growing dependent on applications already requiring bandwidth well exceeding what the Federal Communications Commission (FCC) presently defines as ‘advanced services” (i.e. broadband).

Countless reports have talked about the economic importance of high-speed networks. According to one study, they may be worth as much as $500B annually to the U.S. as a whole. (In a state such as Michigan—not unlike Illinois in its demographics and economic profile—broadband is estimated by officials to be worth $440B and 497,000 jobs over the next 10 years.)

To get broadband deployed at a world-class price will require a new fiber-based infrastructure. So how do we do it? How do we catch up? That will be the topic of the next article in this series.

From the April 6-12, 2005, issue

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