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Inward Investment Guides

Broadband: The Base for New Business

Communities must invest in broadband infrastructure now to prepare for a high-speed, digital future.

Jim Romeo (2011 Directory)
(page 2 of 3)
"Broadband and telecommunications have become as important for businesses as the air that we breathe," says Johan Terve, vice president of marketing for Aptilo Networks. "A large portion of the municipalities we work with initiate wireless broadband projects specifically to encourage business development in their area. The Fortune 500 companies we work with to enable Guest Internet Access also understand that broadband and telecommunication accessibility is no longer a should-have but a must-have to remain competitive."

For location selection and development, infrastructure used to refer to roads, airports, and utilities. But Terve has seen broadband become a more prominent factor in company relocations. "The accessibility of broadband and telecommunications has become one of the top three priorities together with accessibility of competent people and customers when selecting a site," he says.

Return on Investment
While broadband is important, it is expensive. "The investment is significant to build and maintain a viable network to offer the level of reliable broadband connections consumer demand," says Judith Langholz of Iowa Network Services (INS), a consortium of 150 Iowa independent communications providers. "Traditionally in Iowa, it hasn't been the municipalities that invest in the required infrastructure. It has been the independent telephone companies deploying fiber-to-the-home and offering state of the art services to residential and business consumers."

Many businesses realize a return on investment from broadband. But implementing and managing broadband requires creativity.

"Fiber to the home can get very expensive," Newby says. "Middle-mile fiber can get expensive, but is manageable as long as there is a long-haul fiber network nearby to connect to that is open, neutral, and reasonably priced. Anyone that just wants broadband for the sake of having it and has no real plan or knowledge of what they are doing will undoubtedly run over budget, build nothing of true value, and fail."

One of Terve's customers avoided such expenses through careful planning. In Taipei, Taiwan, the city unveiled more than 5,000 Wi-Fi access points over a mesh network across most of the city. "While the investment in hardware in this case was of course inevitable, the city saved money by selecting a pre-integrated service management system, which reduced costs on the system integration," Terve says.

Another customer, the Canton of Fribourg in Switzerland, approached cost-cutting differently. Rather than build a large Wi-Fi mesh network, it deployed multiple Guest Internet Access zones at strategic locations throughout the Canton, each providing a tailored user experience for residents and municipal workers. A centralized service management platform tied the system together.

Networks may be deployed in different ways according to needs, according to Gillath. Different approaches require varying levels of municipal involvement. "In the first model, the municipality deploys a fiber network offering open access to various providers," Gillath says. This model is common in rural or low-population density areas where the incumbent exchange carrier offers insufficient services.

"While this requires the highest capital investment, municipalities have good chances to be awarded with a grant or loan from RUS or the National Telecommunications and Information Administration (NTIA) to help fund such an effort," Gillath says. "As seen by past successes, the attractiveness of the area for businesses enhances the local economy and increases tax income for the city due to the new businesses and new jobs created."

In another model, a commercial service provider works with the municipality to deploy broadband connectivity. While the risk and the capital expense to the municipality is reduced, competition and its control over the service is somewhat lessened. Looking forward, broadband accessibility will only become more critical to business.

"With the evolution of how consumers receive interactive content, on demand movies, games, and more, direct access to a fast, secure, high-capacity broadband connection is required," Langholz says.
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