Kokomo Tribune; Kokomo, Indiana

September 17, 2011

Experts say small, struggling towns need broadband

By Daniel Human
Tribune business writer

Muncie — Broadband Internet has become a must to propel the American economy, but lighter government regulations and low-income assistance would be necessary elements, a panel of industry experts said last week.

During the “Empowering America: Broadband’s Role in Growing the Economy” panel discussion last week at Ball State University, speakers explained how high-speed Internet and WiFi help companies grow, students learn more and doctors keep their patients healthier.

However, obstacles remain, like monthly costs and changes to small communities that are often unwilling to change.

Panelist Kelley Dunne said he wants to see a nationwide effort that would wire struggling communities, largely those in rural and inner-city areas, and give them one year of service for free. The cities would serve as case studies to see where a national broadband plan should go, said Dunne, who is CEO of One Economy, a nonprofit that sets up Internet in rural and low-income communities.

Dunne referred to an existing One Economy program that hooks up and provides free WiFi for 12 to 18 months.

“Sixty to 70 percent, once they have broadband, realize they can’t not have it,” he said.

Panelists Bruce Mehlman, chairman of the Internet Innovation Alliance, and Michael Hicks, an economist at Ball State, said the economy had more to gain by the federal government relaxing restrictions on the companies that provide the Internet, allowing the industry to evolve on its own.

Larry Landis, commissioner of the Indiana Utility Regulatory Commission, said strict laws on the companies can lead to complications.

“Every time there’s been a modification in the system ... someone has found a way to exploit it,” Landis said. “Maybe have government involved less than more because the enterprise system is going to be just a little bit smarter.”

Stimulus money, both through the American Recovery and Reinvestment Act and the recently proposed American Jobs Act, has been positive government involvement in broadband, panelists said.

The Recovery Act provided more than $7 billion to bring the technology to rural areas. And the Jobs Act, if enacted, would set up a program dedicated to providing the technology to 98 percent of the U.S., with an emphasis on setting up WiFi for public safety agencies.

As technologies such as 3G and 4G become more popular, their costs should ultimately come down, Hicks said.

Panelists suggested food stamp-style subsidies or tax incentives to help people afford the services, which can total hundreds of dollars every month for families.

A shift in how households spend money and what they buy is likely to happen as more families invest in the technology, Hicks said after the panel discussion.

That won’t necessarily affect big-ticket purchases, such as cars, he said, but families will continue to adjust smaller expenses.

Schools are a sign of how the Internet-induced consumption shift has happened.

Rather than investing in bound textbooks, more institutions are using computers to teach and provide reading material, he said. That, in turn, is leading to new demands on the work force. Instead of needing factory line workers to assemble those books, companies need the more demanding and more valuable skills of software engineers to develop the computer programs, he said.

“People with good, solid educations who can do those things are being compensated astonishingly different than people who can’t,” he said.

• Daniel Human is the Kokomo Tribune business reporter. He can be reached at 765-454-8570 or at daniel.human@kokomotribune.com.