One of the more interesting trends that I see coming out of the pandemic is the concept that the quality of regional broadband is becoming a key component of economic development. Existing or prospective employers no longer care only about the broadband in a city but in the area around a city.
This is a radical departure from traditional economic development. Countless cities have spent time and money making sure that business parks get fiber broadband. That’s still important and nobody is going to move a business or even keep a business in a location with poor broadband. A growing percentage of businesses are becoming reliant on broadband for day-to-day operations.
But broadband at the main headquarters of a business is no longer enough. A majority of businesses are going to want employees to be able to work from home, at least part-time. For some businesses, working from home is going to be a core component of the business, but it’s a rare business that doesn’t care about working from home.
I think most people would be surprised by the amount of automation that has been incorporated into businesses. I recently interviewed a brewer who is able to initiate a lot of the brewing steps remotely. The brewmaster is able to mix ingredients and add to the brewing at exactly the right time without having to travel to the brewery. He’s able to run numerous tests and diagnostics remotely to keep an eye on the fermentation process. I also talked to an ice factory owner who can initiate most of the processes of the factory from home. These are both businesses that ten years ago would have required somebody on site for all of these functions.
Because employers want employees to be able to work from home, they suddenly care about the quality of home broadband. The pandemic woke employers to the dreadful state of home broadband for many employees. Companies were sending people home who live outside of towns and found that they were unable to connect to the office servers. In most of the country, you don’t have to travel far outside of city limits to find poor broadband. In many cases, the only landline broadband option in the rural areas surrounding the city is slow rural DSL that has download speeds of only a few Mbps. In some places, there is also a fixed wireless provider, but in many cases this service isn’t much faster than DSL. The only other option today for rural broadband is satellite, which has speeds up to 50 Mbps but which has super-high latency that makes it hard to engage in real-time applications like connecting to a home or school server.
The pandemic was a real wake up call for employers and they have suddenly become the biggest advocates for good broadband for the region around their business. It is going to come as a shock to a lot of towns and cities that think they have good broadband because the town is served by a cable company. It turns out that many homes with a cable company ISP struggled with upload connections when more than one person tried to work from home at the same time. But businesses everywhere were slapped in the face with the incredibly poor condition of rural broadband.
I’ve talked to businesses since the onset of the pandemic where a significant percentage of the workforce is unable to work from home. You can bet that when the pandemic is over that many of these businesses are going to be thinking about relocating if there is a community nearby with fast rural broadband. Community leaders who think they’ve solved the broadband issue will be shocked when existing businesses leave for greener pastures.
There is really only one solution to this problem. Communities need to take a regional approach for fixing broadband. Cities and towns need to start caring about the broadband five or ten miles outside of town if that is where people live who work at the businesses in a community. Cities that are thinking about building fiber need to think bigger and care about the broadband in a circle around the city. Cities that solve broadband regionally are going to have an economic development advantage over the many cities that are surrounded by broadband dead zones.
This concept flies in the face of the way communities have done economic development for the past fifty years. Cities took steps to make sure that broadband in the cities, and particularly in business parks was ideal for businesses. But that approach doesn’t address the new reality that businesses want employees to be able to work from home. Cities need to accept this new reality and adjust accordingly.
Amen. It would be awesome if this crisis were to be the motivational force for getting cities and regions to band together, use common successful templates, and create municipal alternatives to the cable/telco monopolies.
Hint: mandating shared fiber within a given jurisdiction would go a long way towards opening up competition. It would require competent management, but that’s just an RFP away…
The idea that a small number of monopoly players who are attempting to be public, growth businesses (in an area where fundamental innovation is expensive and really, really hard) is magically going to turn into any kind of consumer success is…unrealistic. This is exactly where regulated public utilities need to play.