Revving the Broadband Engine

Results of a Study Published by Industry Expert Craig Settles

September 25, 2019

In the latest Broadband Bunch podcast, we speak with Craig Settles from CJ Speaks. He has recently authored Revving the Community Broadband Economic Engine, a study on economic development and broadband in the United States.

Why research the economic impact of broadband?

Craig Settles:     I first started working with communities that were trying to build broadband networks in 2005 when the broadband effort was to build wireless networks one every corner of every city. At that time, there was a lot of hype about the various economic benefits of broadband but some of those were a bit exaggerated.  In 2006, I looked at what economic development professionals had to say about the economic impact of broadband. I formed a relationship with the International Economic Development Council to survey of those professionals annually.  The goal being to separate the hype, either the political machine or the financial machine, while maturing the conversation and making it a bit more robust  A decade ago, the emphasis was on “Should you have broadband? Why the city or county should take the lead?”  Now we must look at affordability, reliability, and availability, because to have broadband just by itself doesn't really have the impact on the economy or the local economy the way that you would expect it to.

Is broadband helpful for driving entrepreneurship among low income communities?

Craig Settles:  And almost always in that question there are a large part that say, how well you do with that objective or outcome is dependent upon whether you have other programs in place that take advantage. For example, look at a digital literacy and how that has an impact but also when you're looking at education. So, you can have broadband, but you need to have both the parents and the teachers have a certain level of digital literacy if that investment you put into the broadband networks that people are building. You're not going to have the outcome you're expecting if you don't have these.   Now the economic development people may or may not be the drivers of those additional programs and the people who are building the network may not see that as their direct primary concern. They just want to get the network built. But someone in the community has to take the lead. What I was looking at for this year was the kinds of factors that need to be addressed and it's up to the community to decide how that happens.

Who is your primary research target and who is the primary reader for the findings?

Craig Settles:     There are two audiences; economic development people, it's always good to have them understand what their peers are thinking as they try to drive the discussion of broadband in their community. And either those that have built the network or are building the network. For example, one finding is about the number of co-ops that have committed to building a network. And that wasn't really a deep discussion years ago but this year it is. There are people who are saying that the broadband activity in their community is being driven by the electric co-ops and that reflects from where we were five years ago where there might've been a dozen co-ops that were building a broadband to now to where you have over a hundred and then that number is growing.

As one person joked if they don't build broadband for their members, they won't have any members left. If they want to have a successful electrical business, you need to have your people still be there. If people are leaving your community then who are you going to sell to as a co-op? There's also a large impetus on the co-ops to provide services for their members. If you look at the quality of life from the member satisfaction, if I look at the need to have better broadband, to have better education, that's another need that's out there. Co-ops feel that anything that they can do to make life better, easier, more fulfilling for their members, then that's what they're going to do.

Pete Pizzutillo:  You quote California Public Utilities Commission in your report.  They say, "Corporate choices made by AT&T, Verizon, and Frontier Communications created the growing divide between relatively modern Telecom infrastructure in affluent urban and suburban communities and the decaying infrastructure in poor and rural ones. The result is deteriorating service quality, persistent disinvestment, and investment focus on higher income communities, and an increased focus on areas most heavily impacted by competition." You go on to say, "This is the American internet dream turned into a nightmare and that high-speed internet networks owned by municipalities, utilities, electrics, and co-ops, and public private partnerships is the main answer to responding to this large corporate digital divide." Can you comment on that further?

Craig Settles:     I think that many people whether we're talking about the co-op, the managers, the local politicians, the representatives, the staff of the city and so forth, all of these folks have come to the understanding that the lack of competition in many of these areas, whether we're talking rural or urban, the lack of competition is a serious hindrance. And when you're looking at why we want to build a network it is usually because there isn't enough competition and because there is a lack of competition despite the FCC's protestations to the contrary the reality is you don't have choice, you don't have good pricing, you often don't have quality networks, or you don't have quality customer service.

Broadband is or has become such an overwhelming need that needs to be in place in both again rural and urban areas that the lack of this competition, people are aware of this. And so, they are more and more taking their future into their own hands. There was a question about are these rules and regulations that ban community broadband networks or public networks. There's an overwhelming feeling is that these are contrary to the economic interests of communities. There are a number of folks who feel they are in an a monopoly or duopoly environment. We're talking about the majority of the respondents to the survey. So, people are aware. To think that they're not would be a big miscalculation on other people's parts. And then, the understanding that the community has the responsibility to find the solution. I think that would be across the board, a thing that is the case.

What would you like to see the FCC do moving forward?

Craig Settles:     One area that people find annoying is you have this reported speed that defines broadband, 25 down, three up. People aren't understanding that this is a core definition of broadband. It also doesn't take into account that there are many applications now where they need as much speed going up as they have going down. Establish speed and just have it be and not be symmetrical is a downfall. There is a feeling that so much of the money that the FCC gives to incumbents, the large folks like AT&T, and Verizon, and so forth. This is a lot of times is a waste of taxpayer money.

When we look at the wireless ISP's that was another question on the survey was, Are wireless ISP's making a difference in broadband in several areas particularly rural? And the feeling is that the FCC grant programs that they have they are weighted against organizations such as wireless ISP's. And I think the group jury's out about are the grants favorable to co-ops but they have a bias against them are in some places the only broadband people have. The same with the cities, the counties. So, there's a definite undercurrent of this disdain for the program. The way the FCC gives out money is to the detriment of the people who it's supposed to help.

RUS funding is more open especially to co-ops. Because they have always been aware of the fact that the co-ops have the potential and now the reality of delivering broadband. I would say that the FCC, I just tend to have a dimmer view of their priorities. I think that the idea of having the FCC have a bundle of cash to devote to broadband is noble, and helpful, and all that good stuff but I think that how the FCC prioritizes that money this is a big deal. And I think that as long as that continues, that inadequacy continues to go on until the administration changes.

Pete Pizzutillo:  You shared a PC Magazine statistic comparing municipal run broadband versus large incumbent in terms of overall performance. And six out of the 10 fastest networks are municipal run. So, the model works, and it's highly effective, and these are sustainable, reliable, secure systems over long periods of time. It seems that the data is starting to stack against that story for FCC and hopefully we make some progress there.

What will telehealth look in the next few years?

Craig Settles:     The core of tele-health uses broadband to drive various aspects of health care. Tele-health is basically just moving data, data about your health, at a individual level at a group level, what have you. And so, these various applications are in the business of taking data about the patient and providing it to a regular doctor, a primary care physician, or specialist, or the various types of health care professionals that impact what I call the continuum of care. All of the ways in which your health from you've stubbed your toe to where you've gone to major surgery there's data involved with all of those instances of health care and your ability to capture, to manage, to massage, and ultimately to use technology to improve your health.

Now the thing that defines tele-health that might be changing, and more people are becoming aware of it but in reality, there have been uses of broadband to help move that data since I would say in the last decade. So, if I take a look at the network at Danville, Virginia, it's a city owned network. They initially developed it to address unemployment. But several years into the use of the network the economic development folks and the health care professionals figured that they could use broadband to tie the main hospital and various clinics in the area together to provide better services, better medical services. And as they started to improve the quality of the healthcare then before you were even were talking about telehealth they were able to attract those individuals and businesses to come into that area because the quality of their healthcare. And as a result they have made broadband driven health care a big feature of why it is you want to come to Danville. And so, you can look at that happening in other communities as we put more attention to tele-health.

I predict that in five years the full weight of this changing demographic in terms of older people who are living longer who have various medical needs and so forth, the number of patients is going to really outstrip the ability of this country to be able to provide for them. And I think the other thing that people don't talk enough about is that telehealth is a factor or it's to improve the quality of health care in the urban areas as much as the rural areas. It's a different dynamic. In the rural areas you have distance and that's a big thing that telehealth tries to address but in the big city you can track the number of people who have access to broadband and track it according to economic status.

So lower income people, moderate income folks, they don't have broadband and we tend to not think about them but, you really need to think about those folks. You must recognize that lower income folks in the urban areas are working two and three jobs and they don't have time to take care of their health and telehealth can address that. You have transportation issues because if you look, and again if you track the quality of public transportation you will often find that the poorest public transportation are in the poorest areas. What might be a 20-minute drive to see your doctor in an urban setting is maybe two or three hours each way for the low-income folks. So both of those needs are going to pretty much swamp the ability to treat these folks and tele-health is going to be I think the big savior but it's going to require broadband period.

How can people access to this report?

Craig Settles:     They should go to my website which is CJSpeaks.com. Go to the reports section and the top report right now is this survey. And I want to make one last item too is 5G. I asked all of the economic development folks to comment on the quality, the usefulness from an economic standpoint of 5G and I think that there are some interesting observations in that sort of free form, tell us what you really think section of the survey. So, go to CJSpeaks.com. The information is there. It also links to my articles that I've written over the last couple of years especially on tele-health. All of it's there and it's freely downloadable.  I should probably tell you. Yes, I'm going to be speaking at the Broadband Communities regional conference in DC at the end of the October but I'm also releasing a new book that will look at telehealth and broadband. If you're in the DC area should check out the conference, the session, and also my book.

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