- Policy Resources
- News & Analysis
- Your State
Community-Based Broadband: Good for State Economies, Good for Small Businesses
Fabiola Carrion on June 10, 2011 - 2:23pm
In the 21st century, even mom-and-pop stores need the ability to market their products, to purchase inventory and supplies, and to enable quick and safe transactions that high-speed Internet provides. A recent report by the prestigious finance research firm McKinsey Global found that 75 percent of the value added by the Internet is created in traditional brick-and-mortar industries, not online startups.
No matter what a business does, it will always benefit from high-speed Internet access.
A recent story from rural Nebraska, where a meat processing plant started collecting orders online, illustrates the type of immediate impact that connecting to global markets can have on a business and on an entire community. Since getting online and creating a website, the company doubled its gross volume of business to $1.8 million a year and went from having one part-time employee to 21-full time and 8 part-time employees.
There is no one who better understands the needs and benefits of small businesses than their own communities and the elected officials that serve them. With the economic recovery still sputtering in many places, state and local legislators are increasingly and understandably interested in guaranteeing that small businesses are more productive, more sustainable, and better able to create jobs and thrive in a 21st-century economy. It is through these local efforts – in cities and municipalities, through co-ops and non-profits – that we will better enable small businesses to access broadband at affordable rates, and encourage the increased competition that will also result in better service. It is crucial that these local alternatives be allowed to provide broadband, since their priority is to fulfill the community’s best interests.
This is not a new strategy.
Over the past 100 years, local entities have played a critical role in expanding access to other pieces infrastructure, like electricity and telephone service, which were once considered a luxuries but are now considered essential. Legislation should therefore promote, not restrict, the local build-out, operation, and maintenance of broadband networks.
As many analysts have highlighted, these types of investments in infrastructure are desperately needed to help rebuild prosperity and create jobs in struggling local economies. Small businesses have much to gain from legislation allowing community-based broadband networks. Diversifying the ownership of networks allows for more competition, resulting in higher speeds, better quality of service, and more affordable rates. Particularly in places were broadband is not offered – an area encompassing a full third of the U.S. population according to the Federal Communications Commission – small businesses have much to gain from community based broadband networks.
When governments invest in strong Internet ecosystems, analysts agree, huge and sustainable economic benefits result.