Seth G. Fearey, President, Connected Communities
February, 2002

The communications technology companies are riding the wrong horse in the broadband deployment race. They keep pushing the government to spend more money on faster and faster infrastructure when we don't have enough compelling applications to get people interested in what is already available. If our policy makers in Washington are serious about developing our broadband infrastructure they need to invest more in applications -- the real value in being connected.

When he chaired Smart Valley Inc., a non-profit dedicated to helping Silicon Valley get connected, John Young, former CEO of Hewlett-Packard, always emphasized that connecting Silicon Valley was about delivering value. Smart Valley also realized that it was local content and services that were the most valuable. Getting a book from Amazon is great, but exchanging messages with your children's teachers, your doctors, and city hall are a lot better.

Smart Valley promoted local e-commerce, tele-work, and tele-medicine. It invested in teacher training, created a location-smart guide to local government services in Silicon Valley, and developed a comprehensive information resource for voters. Today Silicon Valley is one of the best connected regions in the world. The people and businesses of Silicon Valley use connectivity to compete effectively in the global information age economy and to enhance the region's quality of life.

Connected Communities, my consulting practice, helps communities evaluate their communications infrastructure and their ability to put it to constructive use. Our largest client is the 3.3 million residents of California's agricultural center, the San Joaquin Valley. The state-funded San Joaquin Valley ACCESS program has helped nine counties conduct assessments. The picture that emerged is consistent with what the Federal Communications Commission and others are finding across the United States: the communications infrastructure is much better than people realize, and it is not being put to use.

The biggest holdouts are local governments and small businesses. The majority of the Valley's 58 local governments have websites, but just a handful accept credit card payments for permits or licenses. Very few small businesses have websites, and even when they do, they are not accepting credit cards or handling other forms of e-commerce transactions.

The $40-$50 per month cost of broadband is clearly a barrier. We can overcome that barrier by delivering $40-$50 a month in value. The local newspaper, stuffed with advertising, costs about $15/month. Cable television costs about $40/month. These services are delivering value; broadband can too.

Steve Peters of Tucson, Arizona's Community Information and Telecommunications Alliance has identified three categories of people who are not connected:

* The have nots.
* The can nots.
* The will nots.

To get connected, the have nots need computers and money for services, the can nots need access to communications services, and the will nots need a convincing reason to take the first step. The FCC and others find that 70%-80% of homes can get broadband access, but only 10% have signed up. We need to address the needs and concerns of the will nots to make progress.

What can Washington do to convince the will nots to give broadband a try? Here are some suggestions:

* Encourage tele-work programs. Parks Associates found that 80% of broadband households have at least one telecommuter.

* Help local governments put transactions like building permits on-line. High up-front costs are holding many smaller cities back.

* Help healthcare providers pilot tele-medicine. Encourage insurers to convert to digital records and reimburse doctors for remote consultations.

* Help school districts send teachers to professional development courses on effectively incorporating technology in education.

* Provide support for community portals - one site with links to everything you need to know about your community.

* Provide subsidies for small businesses to encourage them to take classes in e-commerce. Back up the program with a marketing campaign.

* Create an emergency alert service on the Internet that takes advantage of always-on connectivity.

* Support the deployment of web cams that provide information on traffic and emergency conditions.

Communications companies can not be expected to continue deploying faster networks in the face of weak demand. The communications technology companies want the government to reduce regulation and provide more subsidies and incentives. Such policies should be balanced by policies that help local content creators develop compelling applications that deliver real value.

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