The Industry

Corporate Broadband at Home

One of the broadband products that quietly emerged during the pandemic is a suite of products that enable corporate broadband to safely be used at home. IT Directors of large companies were aghast when a large percentage of staff were sent home to work and instantly wanted full access to the same systems and functionality that they used in the office.

One of the key linchpins of corporate data security has always been to limit access to corporate networks from outside the physical confines of the office. Corporations have always had employees working remotely while out of the office sick or on travel. But remote employees were usually given limited access and often didn’t get full access to sensitive databases and systems. But suddenly, everybody from the CEO down to the lowest-level office workers needed access to the systems that they had been using in the office every day. Employees wanted access to everyday proprietary systems, collaboration software, unified messaging, and everything that let them operate as if they were in the office. This was a nightmare scenario for IT departments that were tasked with protecting proprietary corporate data while somehow opening the portals for large numbers of remote works.

Some of the largest ISPs eventually stepped in to put the IT departments at ease with a suite of products that added the needed access security so that remote users were fully verified to be a real employee and not a hacker. The first thing these products offered was a broadband connection controlled by the company, not by the employee. These new connections were intended to be separate from an employee’s existing home broadband to create a clear demarcation between corporate data and personal data.

I may not remember these in the right order, but the earliest such products I can recall after the onset of the pandemic were from AT&T and Comcast. The AT&T Home Office Connectivity product was only available in homes connected to any AT&T broadband product, but touted fiber connections as the best. This was a challenging sale to companies due to the hit-and-miss deployment of AT&T fiber that has been deployed in small neighborhood clusters rather than citywide. The original AT&T product offered speeds up to a gigabit, static IP addresses, and priority customer care for employees. These first products let a company have some control over the type of home connection being used to access corporate systems. Over time, AT&T rolled out the kinds of features that IT departments wanted – multilayer safe logins, compatibility with SD-WAN, encrypted transmissions, deep packet inspection, and a secondary connection on cellular if the primary link fails.

The Comcast Business at Home product was similar, but with the ability to offer relatively fast speeds in any Comcast market on the coaxial/fiber networks.

Over time, these products have gotten more sophisticated. Some of the products today offer redundant connections from home to multiple cloud data centers. The latest versions of corporate-at-home connections offer a suite of collaboration tools that are more sophisticated than what an employee might have been using at work.

As might be expected, corporate-quality connections are considerably more expensive than normal home broadband and are nearer in cost to broadband products sold to sophisticated small businesses like law firms.

It seems likely that these products are here to stay since a lot of workers are never going back to the office. The latest reports I’ve seen about downtown business occupancy show that most downtown business districts are barely back to 50% of the number of daily workers pre-pandemic. While we hear of the occasional large company that is forcing people back to the office, there are far more quiet examples where companies have decided that remote employees are going to be permanent. Companies are realizing the benefits that come from the ability to attract the best employees from anywhere and the expansion of the business from having employees in all time zones. Younger workers are demanding the ability to work at home at least part-time as a condition for taking jobs.

I would expect over time there will arise an industry selling suites of these products that are not associated with an ISP. Just as the VoIP industry grew outside of telephone companies, it’s not hard to imagine companies springing up that specialize in the software needed to create the safest and most seamless corporate broadband connection at home.

The Industry Uncategorized

Working From Home

Governments are starting to catch onto to the idea that one of the most dynamic parts of the new economy is people working from home. Governor Phil Scott of Vermont just signed legislation that provides an incentive for people who want to move to Vermont and work from their homes.

The program consists of grants of up to $5,000 per year, not to exceed $10,000 to help cover the cost of relocating to the state. To qualify for the grants a worker must already be employed by an out-of-state company, work primarily from home and move to the state after January 1, 2019.

The overall program isn’t large, set at $125,000 for 2019, $250,000 for 2020 and back to $125,000 in 2022. If awards are made at the $5,000 level this would cover moving 100 new workers to the state.

In economic development terms, landing 100 new full-time families using a $500,000 tax subsidy is a bargain. Governments regularly provide tax incentives of this size to attract factories or other large employers. The impact on the economy from 100 new high-income families is gigantic and over time time the taxes and other local benefits from these new workers will greatly exceed the cost of the program.

Vermont is like many states and finds itself with an aging population while also seeing an outflow of young people seeking work in New York, Boston and other nearly cities. These grants create an opportunity for young families to move back to the state.

One key aspect of the work-at-home economy is good broadband. Many companies are now insisting that employees have an adequate broadband connection at a home before agreeing to allow a worker to work remotely. I’ve talked to a few people who recently made the transition to home work and they had to certify the speed and latency of their broadband connection.

One reason that this program can work in Vermont is there are areas of the state with fiber broadband. The City of Burlington built a citywide fiber network and local telcos and other cities in the state have built fiber in more rural parts of the state. But like most of America, Vermont still has many rural areas where broadband is poor or non-existent.

What surprises me is that many communities with fiber networks don’t take advantage of this same opportunity. It’s easy for a community with good broadband to not recognize that much of America today has lousy broadband. Communities with fiber networks should consider following Vermont’s example.

I know of one community that is doing something similar to the Vermont initiative. The City of Independence, Oregon has benefitted from a municipal fiber network since 2007, operating under the name of MINET and built jointly with the neighboring city of Monmouth. The city has a new economic development initiative that is touting their fiber network. Nearby Portland is now a hotbed for technology companies including a lot of agricultural technology research.

Independence has one major benefit over Portland and the other cities in the state – gigabit broadband. The new economic development initiative involves getting the word out directly to workers in the agricultural research sector and letting them know that those that can work at home can find a simpler and less expensive lifestyle by moving to a small town. They hope that young families will find lower housing prices and gigabit fiber to be an attractive package that will lure work-at-home families. Independence is still close enough to Portland to allow for convenient visits to the main office while offering faster broadband than can be purchased in the bigger city.

The Industry

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.

Current News

Broadband and Real Estate

By 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.

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