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The Broadband Challenge

By Dan Bobinski

When a good idea comes around, it needs as much attention as it can get. A recent article by Ned Desmond, president of Business2.0 magazine, suggests that the U.S. Government underwrite the costs of getting the nation’s homes and businesses connected to the Internet through broadband access.
The idea originally made me uncomfortable because although the government provides vital services for our infrastructure, I usually prefer that the government stay out of my business as much as possible. I’d always thought of Internet access as a service we must buy for our own personal and business use. Yet, like the nation’s interstate system, the “information superhighway” is a large part of what makes business happen. It is integral to our country’s productivity.
The compelling factor for me is time.
In most businesses, time is money. Saving time saves money. And broadband saves time. Lots of it.
The loss of time using slow computers hit me a few months ago. I had put some software on my computer that slowed it way down. It was taking an unbelievable amount of time to open files, switch back and forth between programs, and open Internet sites. I estimated that 5-10% of my time was being wasted working on a slower computer.
Multiply your annual salary by ten percent. Even five percent. How much is that time worth?
My slower computer reminded me of my old dial up connection – dial up was just as slow as what I’d recently experienced. But by using broadband, the time it takes me to transfer files to and from clients is a fraction of what it used to be. Downloads that used to take five minutes now take ten seconds. The high-speed connection is worth every penny I pay. The question is this: “Why don’t more people use broadband?”
Only 16% of American homes currently use broadband, compared with at least 35% of homes in South Korea, Hong Kong, and Taiwan. The rate of growth for broadband use in France and India far exceeds the United States, and the gaps only look to get larger as time goes on. The U.S. is expected to have only 33% of its population using broadband by 2006. This could put us at a huge competitive disadvantage.
The problem is that broadband in this country is expensive. It runs around $40 - $50 per month. In South Korea it’s averaging only $25 per month. What did South Korea do different? Their government created a challenge among its phone companies, cable services, and power companies to increase broadband usage. As a result they have lower costs, and over 50% of South Korean Internet users now use broadband.
Somehow we’re not making the mental “connection” that high-speed connections save us oodles of time, which in turn saves us oodles of money. In addition to time savings, some are projecting that a huge entrepreneurial effort would sweep the nation if broadband was commonplace in homes. TeleNomic Research out of Virginia estimates that more than 1.2 million new jobs would be created if 55 million households had broadband service. The Brookings Institute says such a change would be worth $500 billion in economic growth.
Think about this: How many companies pinch and cut to save 5% here and 3% there? Yet people aren’t moving to broadband because they can save a few bucks using dial-up, and they don’t consider how much time they could save (read dollars) if they used broadband. Like anything else, if the costs were lower, more people would use it. It’s sort of like Amtrak, where if the government didn’t subsidize it, it would be too costly to use. The difference with broadband is that people want to use it and it brings a much higher return on investment. Another benefit? It isn’t going to derail anytime soon.
When we consider that the U.S. Government already subsidizes local telephone service $30 billion a year and our nation’s highway system $330 billion a year – both of which add tremendously to our ability to conduct business – $6 to $10 billion for broadband will reap great rewards in terms of increasing our nation’s gross domestic product.

© 2003 Dan Bobinski / Leadership Development. Dan Bobinski is President of Leadership Development. He can be reached at (208) 375-7606 or by Email at dan@leadershipanswers.com.
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