No longer an advanced technology only required for cutting-edge businesses, reliable high-capacity broadband is a must for many of today's business operations. Whether it is an auto plant in Detroit, a data center in Idaho, or a customer service call center in Virginia, few sites can do without it and it is now expected in many site selection decisions.
While much of rural America's information and communications technology (ICT) infrastructure still lags behind that of major metropolitan areas, some small communities are taking important steps to bring their infrastructure up to speed. By building community support, laying fiber optic lines through the countryside, and creating multiple levels of redundancy, administrators in these rural areas show their understanding that broadband infrastructure is now as critical as highways and an educated work force. Advanced ICT services are not just needed to thrive - they will soon be needed simply to survive.
With funding from the American Recovery and Reinvestment Act of 2009 planned for rural broadband development, those in the ICT industries say that less populated communities have a stronger chance than ever before to build out their ICT infrastructure. By combining a high-capacity broadband infrastructure with the low costs traditionally associated with business location in rural areas, these communities have opportunities to present a highly attractive option for corporate location decision-makers.
Critical to Success
Although the availability of advanced ICT services was ranked fairly low on Area Development's 2008 Corporate Survey of site selection factors, it is still critical to operations. A U.S. Census Bureau study says that U.S. businesses spent more than $250.7 billion on ICT equipment in 2006. In today's digital age, every aspect of a company's operations - from shipping and receiving to manufacturing and customer service - relies on a web-based infrastructure that can support the flow of information across a vast network of centers and business partners.
Ed McCallum, a senior principal at McCallum Sweeney Consulting, Inc., which provides site selection and negotiation services for manufacturing firms, says that in the past 15 years, a large amount of fiber has been put in the ground throughout much of the country. The availability of advanced ICT services isn't less important, it is just that it is expected. "Fiber is just about everywhere now and you have to be in a very remote area not to have it," he says. "What was considered `rural' in the past now may not be so rural anymore."
One area that has invested heavily in telecom infrastructure - including fiber optics and digital switching - is Platte County, Missouri. This has ensured high-quality, reliable service. Major information-intensive businesses located in Platte County include Aetna RX Services, as well as data centers for Bank of America, Liberty Mutual Insurance, MasterCard, and CitiCards, among others.
Gary Yates, director of site selection for Jones Lang LaSalle Americas, Inc., says that much of the country is already "wired" to some capacity, but many rural areas lack redundant and robust systems. Redundancy involves having multiple fail-safes in place so that if a network wire is damaged, there is still a path for information to flow. Redundant systems often have fiber optic wires run in a loop fashion throughout an area and even the entire community so that a fail point doesn't cut off service to those down the line. Yates says it is not uncommon to find rural sites with only one line. "In some of these [smaller] markets, you can get fiber optics, but it is a direct line from the central office versus a loop," he says. "If a backhoe is digging down the street and hits the wire, you are out."
Many companies are also moving to more paperless environments where documents are scanned and transported via e-mail and the Internet. The biggest data operations require broadband access with large bandwidth typically handled by the benchmark T3 lines and circuits. Also known as DS3, it's a super high-speed connection that is equal to 672 regular voice-grade telephone lines and can transmit data at rates of up to 45 megabytes per second. T3 lines can transmit real-time video and very large databases over a busy network shared by hundreds or thousands of users.
Whether it is serving the needs of a small manufacturing operation or having the major power and broadband redundancy needed for a large data center, rural communities are all developing their ICT infrastructure on different levels. Jan Rogers, executive director of the Southern Idaho Economic Development Organization, says that a regional assessment by Lockwood Greene found a lack of fiber optic communications to be a major barrier in her area. In September 2000, 12 rural telephone companies in the region came together and created Syringa Networks with the mission to build a $40 million broadband infrastructure network through even the most sparsely populated and rural areas of southern Idaho. Most of the communities in the network have fewer than 10,000 residents, but Syringa can still deliver T1 to T3 speeds through its Frame Relay Service. "Without [the infrastructure], a number of manufacturers that are in our area would not have been able to come here because we wouldn't have been able to provide the services," says Rogers. "Our opportunities have grown spectacularly from where they were 10 years ago."
In Missouri, the Joplin area has a fiber-optic network strong enough to support a regional labor market of 195,000 and a population within 150 miles higher than that of metropolitan areas such as Kansas City and Tulsa. The ICT?network supports businesses that include several software development companies and tech support centers. Local colleges and private technical schools offer training programs for all skill levels in ICT.
Degrees of Connectivity
The availability and dependability of ICT infrastructure can vary widely in rural areas. While there are some towns with only 10,000 people that have infrastructures on par with major metro areas, there are also cities with a population higher than 50,000 that barely have broadband suitable for modern business applications. Many of the areas with the appropriate infrastructure have gained their technology through cooperatives that are funded by local governments and businesses.
The Mid-Atlantic Broadband Cooperative (MBC) is one such example. Started in 2004 with funding from the U.S. Department of Commerce Economic Development Administration (EDA) and the Virginia Tobacco Commission, MBC laid a 700-mile fiber optic network that connected southern rural Virginia to the rest of the world. According to MBC general manager Tad Deriso, economic developers in the region found it had become increasingly difficult to attract new businesses without the appropriate ICT infrastructure.
MBC is unique because it offers businesses in southern Virginia direct access to a major peering point, a physical Internet exchange point where networks exchange traffic. There are only a few peering points in the United States, and with the nearest one just across the state in Ashburn, Virginia, MBC had the ability to pipe directly into the network. Deploying an advanced, carrier-class SONET/SDH network with Nortel's Optical Multiservice Edge 6500 platform with OC-192 and OC-48 rings, MBC ran fiber from Atlanta, Georgia, straight through Virginia to Washington, D.C. As a result, rural Virginia is now tied into one of the country's fastest and most redundant systems.
"We're one of the few rural areas in the country that has their own network with massive capacity into a major peering point," says Deriso. "It has really put us on a level playing field." He cites as an example one business that was paying approximately $15,000 per month for a DS3 (T3) high bandwidth circuit line. With the new infrastructure, that company now pays less than $4,000 per month, a cost cheaper than in major cities such as Richmond, Virginia, and Washington, D.C.
Mike Hickey, president of Hickey &
Associates, a Minneapolis-based site selection and public incentives
firm, says that many rural communities have invested heavily in the
past 10 years to play "catch-up" with the rest of the country and
attract their share of business. He says those rural communities that
can attain the appropriate infrastructure have a strong competitive
advantage, one that can even compete with major metro areas. "It has
allowed [those rural communities] to promote the fact that they not
only have the technology and infrastructure in place but a cost of
doing business that is much lower," he says. "It can usually be a tough
sell for some communities but some of them are doing it successfully."
city of Dublin, Ohio, is an example of a community that has identified
the infrastructure necessary to support a tech-based economy. Dublin is
expanding its communications network, which includes DubLink, an
underground fiber-optic highway providing competitive service,
connectivity, and redundancy for voice, data, and video communications
systems. This high-speed network provides instantaneous access to the
global marketplace. The looped system offers backup capabilities
through three central offices. Businesses have the opportunity to
choose their own service provider or to lease fiber capacity.
DubLink, the city also has installed a wireless fidelity, or Wi-Fi
network, throughout Dublin's business corridor providing mobile access
and enhancing speed, function, and reliability. In fact, Dublin's
broadband deployment program received international recognition in 2008
when the city was named a 2008 and 2009 Smart21 Community in the
Intelligent Community of the Year awards program. In addition, Fox
Business News recently named Dublin as the top city in its Best Places
to Start a Business survey, citing the area's infrastructure as part of
the selection process.
The Stimulus Boost
many rural areas, co-ops and partnerships with local business alliances
and communications providers have proven to be a successful model in
expanding broadband infrastructure. Expecting to receive more than
10,000 applications for funding, the U.S. Departments of Commerce and
Agriculture have been allocated a combined $7.2 billion from the $789
billion American Recovery and Reinvestment Act to use for broadband
deployment. At press time, specifics for the distribution had not been
outlined, but a large group of diverse organizations agree that the
criteria should be based on the potential for job creation.
Rural Vermont Broadband Project of the Vermont Council on Rural
Development is another example of how grassroots development and
government funding can help bring broadband infrastructure to rural
areas. Paul Costello, the organization's executive director, says it
has worked not only to bring broadband to rural areas but also to
coordinate policy conversation. In 2007, Governor Jim Douglas called
for the state to achieve universal broadband access by 2010.
to Akamai Technologies' "State of the Internet" report for the fourth
quarter of 2008, Vermont now ranks as the state with the
seventh-fastest broadband in the United States. "We are leading an
effort on part of the stimulus package money in Vermont," says
Costello. "We're doing this all very quickly and I think it will
[increase] the use of [broadband for business] throughout the state."
in the ICT industry also say that big broadband projects in rural areas
can't succeed without the support of the community. As an example, C.
Sam Walls, president of Connect Arkansas - a nonprofit organization
aimed at bringing broadband access to all of Arkansas by 2013 - points
to the results of the 2008 State New Economy Index survey, based on the
responses of 608 registered Arkansas voters: 29 percent have never used
the Internet; 7 percent were unsure of what broadband or high-speed
Internet access meant; 30 percent would not subscribe to broadband
service even if it was affordable and made available to every household
With that kind of public opinion, Walls says, it
is often hard to convince voters and taxpayers on the importance of
laying multimillion-dollar T3 lines to the community. "We believe a
large percentage of it is attributable to the fact that they have no
familiarity with it," he says. "That may be because they don't have the
access or exposure that would allow them to find the relevancy of that
Walls also says that the state and federal funding is
critical in deploying broadband infrastructure in rural areas because
ICT companies often have no financial incentive to expand into such
areas. Big business operations and high-capacity broadband customers
can set up in an area without the infrastructure, but the broadband
companies can't build the infrastructure in an area without big users.
In many rural areas, only government funding and stimulus money can
entice broadband companies to lay the first lines of development.
Walls' opinion, education is key to bringing communities of every size
on board: "We're in a hurry, and if we as a nation are going to be
competitive on a global scale.we have to get this done and we have to
get it done quickly."