Consultants Forum Advertise
Subscribe
Close

  • Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues

Subscribe Now
Renew

Area Development - Site Selection, Facility Planning and Workforce Development

Broadband: The Base for New Business

Communities must invest in broadband infrastructure now to prepare for a high-speed, digital future.

2011 Directory
The growth of cities and regions depends largely on access to technology, especially broadband infrastructure. Broadband connectivity plays an increasingly important role in shaping business development in a geographic area. Businesses and economic developers must make important decisions now regarding digital infrastructure for future gain.

Chattanooga, Tennessee, knows this well. EPB, Chattanooga's non-profit electricity provider, recently built a fiberoptic communication system with $111.5 million in stimulus funds that will anchor the city's smart grid. The grid will include one-gigabit Internet service, making it one of the fastest in the world.

The Recovery Act is bringing broadband to other locations that once lacked it. The U.S. Department of Agriculture (USDA) funded Internet access to rural areas through seven programs. Its Rural Utilities Service (RUS) invested $3.5 billion in funding for 297 broadband infrastructure projects, four satellite awards, and 19 technical assistance grants to extend broadband to rural, Native American, and Alaska Native communities across 45 states and one territory. The agency estimates that about 7 million people in remote regions will now have access to high-speed service.

Essential Part of Business
"Every aspect of business today has something to do with networks," says Hunter Newby, CEO of Allied Fiber. From mobile coverage to fiber-based Ethernet transport, businesses of all sizes require speedy digital service to execute many functions. "This is just for the common office building," Newby says. "Just think if there was no wireless coverage in a certain area." Broadband is an asset to locations and is important not only to technology industries, but to many other sectors that rely on it indirectly.

"While it is obvious for high-bandwidth-demand businesses like data centers and data storage facilities, which require connectivity directly to the core in order to generate revenue, it is true also for various other businesses, for example, companies that send online catalogs, educational institutions that use e-learning, and many others," says Irit Gillath, vice president of product line management for Telco Systems. "Online sales play a major part of the income for many businesses, and reliable broadband becomes an essential part of the business."

Gillath also notes that areas that have improved their broadband infra structure attract new businesses that grow the local economy.

That was the case for Kellogg's, the iconic food company with headquarters in Battle Creek, Michigan. The city and its economic development group, Battle Creek Unlimited, saw the need for improved connectivity and broadband and took action. In 2002, it built a robust underground conduit system to carry fiberoptic strands that connect downtown Battle Creek with the Fort Custer Industrial Park.

CTS Telecom, a local service provider, claimed 30 dedicated fiberoptic strands for its own use. It acquired six dedicated strands and a portion of the bandwidth for public education, nonprofit, and other governmental uses. The private sector uses the remaining bandwidth. As a result, existing businesses have expanded and the city has created an environment that attracts new business prospects.

Gillath has seen investments such as Battle Creek's pay off for communities. "Companies like Microsoft, Yahoo!, and Ask Jeeves selected Grant and Mason Counties in Washington State for their core business. Broadband offerings in these areas have also attracted other companies," he says. Among the relocations and expansions, Louisville Slugger and Sims moved to Mason County, Washington; Colgate Palmolive moved to Morristown, Tennessee; and Cooper Tire expanded in Auburn, Indiana. While none are telecom companies, broadband accessibility was a deciding factor in those location decisions.

Exclusive Research