Fiber and the New Economy

Many communities look at having a fiber network as a catalyst for economic development. When fiber was relatively new this was clearly the case. We can look at some of the early adapters of fiber, like Bristol Virginia to see how communities leveraged a fiber network to bring large employers and jobs to their communities.

I’ve been talking to some economic development pros recently and I think that historic economic development model is rapidly changing due to the nature of our new economy. I don’t think there will ever come a time when communities won’t hope for a major employer to move to their area, and we know today that requires having great broadband. But I also think that smart communities will look beyond this model and will find new ways to best leverage fiber.

Probably the biggest recent change in our economy is the work-at-home phenomenon. People are able to work at home for major corporations, and that means they can live anywhere. But the real juice from the work-at-home economy is from people starting their own businesses from their homes.

I’ve worked out of my house for nearly twenty years. When I first started doing this it was rare and I didn’t know anybody else who worked full-time from home. But today its common – just on my one city block there are a half a dozen families supported by work-at-home jobs.

The other big economic trend is that we are becoming more of a service economy. There are numerous businesses making a go of it by supporting others in their community. A few big retail companies like Walmart and Amazon devastated a lot of the small retail community across the country. But I look around and see a thriving service community that is immune from the effects of big retail – restaurants, brew pubs, pet sitters, investment advisors, Lyft drivers, etc.

The new economy also fosters craftsmen and artists. Where I live it’s hard to find a carpenter or electrician since they are all so busy. As I travel around the country I see art and photography studios everywhere.

So what does all of this have to do with fiber and economic development? First, I think it’s becoming clear that communities without fiber are in danger of becoming irrelevant and of withering. The people working in the new economy need broadband to work at home or to sell their services or art work. And communities clearly need good broadband to support good education.

The new model I see for economic development recognizes the new economy and values it in the same way that they used to value drawing in the big employer. A person making $65,000 per year from their home is probably more valuable to a community than somebody making the same in a new factory that relocated for tax incentives. The factory worker might be commuting and carrying the salary elsewhere while the home worker is likely to shop and spend their money locally. And the factory is likely to be shipping profits out of town. We’ve known for decades that there is a huge multiplier effect from spending money locally, and creating jobs that spend locally can really fuels a local economy.

So I think the smart communities are those that will embrace this new economy and foster it. I would venture to say that very few communities even know how many local people work from their homes. And few have any strategy for attracting more people to work from home or for helping local people start new home-based businesses.

Since work-at-home employees can generally live anywhere, cities need a strategy if they want to foster this new economy. One possible strategy is to do everything possible to make a community into a place that people want to live. That means expending economic development resources to promote new restaurants, to foster the local art community, to create better parks and green spaces. It means cleaning up old downtowns and doing everything possible to get businesses to occupy empty spaces. It means eliminating tax or other disincentives for new small businesses. And it means making sure there is good enough broadband to support all of these efforts.

Broadband and Real Estate

Polk County SignBy now many of you have probably seen the articles about a guy, Seth, who bought a home in Kitsap County Washington only to find out that it didn’t have broadband. Seth works from home and needs broadband access. He did his homework first and was told by employees at both the Comcast and Xfinity phone numbers that the address had service previously and that he would be able to get broadband there. Here is Seth’s blog, and as someone who works at home I can certainly feel his pain.

If you work at home then having broadband is no small matter – it’s your lifeline. This is what I find so dreadful about the thousands of rural communities with little or no broadband. The people in those places do not have the same opportunities as the rest of us. It would be an inconvenience to not be able to watch streaming video, but it would be economically devastating if you couldn’t take a good-paying job because you don’t have broadband.

In this case I hope Seth knows a good lawyer, because Comcast directly caused him great financial harm. Multiple Comcast employees told him that the house had service in the past and that he could get broadband there, which turns out to be untrue. Instead, the home had never been served by Comcast and they were going to have to build cable to serve it. As anybody knows who has ever tried to get Comcast to build cable strand, it’s like trying to get water to run uphill.

I have my own similar Comcast story with a happier ending. When I moved to my house in Florida I knew Comcast was all over the neighborhood and my new house even had a Comcast pedestal in the driveway. But it took what felt like 40 calls to Comcast to get them to come out and give me a 40 foot drop wire. We started out with them not knowing if they serve my neighborhood until finally they decided to charge me $150 to verify that I could get service. Even with that it took me over a month from the first call until I had working broadband – and a lot of people are not willing to suffer through that ordeal. I know it soured me on Comcast and no matter what good they ever do for me I will always have in the back of my mind how I had to practically threaten them to get them to give me service.

Over a decade ago when I moved to the Virgin Islands, the first thing on my ‘must have’ list was broadband. Every real estate agent there lied to me and told me that the house I wanted could get DSL from the local telephone company. But luckily I understood that for a home that was 10 miles from the nearest town they were probably wrong. I found through knocking on my potential neighbors’ doors that the only broadband there was wireless, but that it was good enough for my needs (in those days about 2 Mbps download). If I had relied on what the real estate agents all told me, and if there had not been wireless, then I would have been in the same situation as Seth. It turns out that the copper lines at that house were so bad that they couldn’t even support a telephone call let alone broadband.

Seth’s troubles were further multiplied when he found out that he also couldn’t get DSL from CenturyLink. While they served his neighborhood, they had a ‘network exhaust’ situation, meaning that all of the wires in the telco cables are being used. I have lived in such neighborhoods and you have to get on a waiting list to buy a second line or add a burglar alarm. Sadly, there are numerous older neighborhoods where the copper network is totally full. Over the years some pairs of copper go bad and so the inventory of potential working lines slowly drops as the network ages.

The final insult to Seth is that the FCC would have told him he has options there. According to the National Broadband Map, that part of Kitsap County shows 10 options for broadband. That is a phenomenally large number of choices and even includes fiber from the local electric company. Yet none of these options were actually available to Seth.

What Comcast did was negligent by telling him there was broadband available when there wasn’t. But we are now at a time when a house’s value can be drastically affected by lack of access to broadband. I hope this guy sues Comcast and wins, but I also hope that people without broadband keep screaming and make themselves heard. Because for a lot of America, Seth’s story is just another day of normal life for rural America.