Broadband: On the Fast Track?

WASHINGTON, D.C. -- Broadband's proponents talk fast about high-speed benefits. They estimate broadband access is worth billions to consumers, in flexible work schedules and fewer traffic jams. They want a national vision for the technology, and priority on legislation to make access widespread.

It's clear why tech companies want Congress to boost broadband: It benefits their struggling industry. Lobbyists, reports, conferences, and industry experts are pushing broadband near the top of the adminstration's agenda and are nurturing congressional support for legislation that promotes it. Their next challenge is finding the killer app that will coax consumers to log on at high speeds.

Industry Rallies

Broadband could yield $300 billion in consumer benefits each year, says a study by Robert Crandall, a senior scholar at the Brookings Institution, a policy research organization. For instance, more people could save time and money working from home with the help of high-speed lines.

Others say widespread broadband access is crucial to American competitiveness. The United States is the fourth biggest user of broadband, behind South Korea, Canada, and Sweden, according to a study by the Organization for Economic Cooperation and Development. But, the study warns, the country could drop from the top ten if it doesn't keep building infrastructure.

"The United States was able to stay ahead of the race in the first lap because of its high investment in the Internet, and we will lag behind unless we do the same with broadband," says Louis Gerstner, IBM's chair and chief executive.

The CEOs of eight leading U.S. hardware vendors have asked the government to make broadband a priority and to craft a national vision of its deployment over the next decade. The recent report comes from the Computer Systems Policy Project, and participants include Michael Dell of Dell Computer and Christopher Galvin of Motorola.

Promoting broadband is a recurring theme of other industry leaders, notably Microsoft CEO Bill Gates, who considers it crucial to Microsoft's .Net vision of Web-based services. Eric Benhamou, 3Com chair and Palm CEO, also touts broadband's promise.

The Means to Speed

The catch, as with any government initiative, is how to proceed. Subsidies, tax credits, and deregulation could all help regional telecom companies build infrastructure. A related mission is encouraging Americans to jump on the fast track too--perhaps by making the price right.

"If you create competition by deregulating telecom, then prices will go down and content will improve as the monopoly that cable companies enjoy will be broken," says Walter McCormick, president of the United States Telecom Association.

Others point out that nearly 80 percent of all American homes already have access to some form of broadband, and more than half have a choice of three types of broadband. But only around 11 percent of those people were expected to sign up for high-speed service through 2001, according to a Yankee Group study.

Consumers need a better incentive, industry watchers say.

"So far, the only benefit that has been conveyed to the public of broadband has been speed," says Chic Smith, vice president of UrbanThink Tank, a research center for youth. "Consumers have sent their message loud and clear. They say, 'If I am only going to get faster e-mail for $50 a month, then I don't want broadband.' Now it is up to industry to heed it," she says.

Broadband is considered a luxury in most families, and is used in homes mainly for gaming and entertainment, says Harris Miller, president of the Information Technology Association of America.

"[Users] are not taking to broadband because they don't see the value proposition," Miller says. "Why are people asking for the creation of more highways when existing highways are empty?"

Wanted: Killer App

But both Miller and Smith acknowledge broadband's benefits. "The technology community has not done enough to drive home the advantages," Smith says. She says government, industry, consumers, and even not-for-profit organizations should work together on a strategy for further development.

In fact, the Information Technology Association of America is meeting with various interests to consider what gets converted to broadband. Its reports urge more industry research and development for high-speed applications. Those involved are still looking for the killer application that requires fast access.

What is that killer app? Miller believes telecommuting is a big one. A second potentially big benefit is telemedicine, which helps hospitals and doctors get assistance from each other over long distances. Another possibility is e-learning designed to help users, especially the disenfranchised, get education at home.

As more people log on to the fast lane, its adoption will also pick up speed, McCormick suggests.

"If my whole family is on broadband I will want to be connected to them, but if I am the only one connected to broadband all the time, why would I want it and what would I do?" he asks.

Legislation Looms

Still, the broadband buzz continues in legislative chambers.

"I am surprised at how much of the debate on broadband is taking place in Washington," says UrbanThink Tank's Smith.

Much of the debate centers on the contentious Tauzin-Dingell bill, intended to promote competion by easing regulations. Local telecommunication carriers could offer high-speed Internet access across regional boundaries without having to first open their local markets to rivals. The measure, dubbed the Internet Freedom and Broadband Deployment Act of 2001, is expected to go to a House vote in March.

It is sponsored by Representatives Billy Tauzin (R-Louisiana) and John Dingell (D-Michigan). Debate has swung widely, but ten months after the bill was introduced there is still no consensus.

Skittish Supporers

Some, wary of a dot-com-like crash, warn against overcommitting resources to an emerging technology based on speculation.

"In any market, demand should drive supply, and not the other way around," says Adam Thierer, director of telecommunications studies at the Cato Institute, a policy research organization.

"There is no need to force the pace of the market," Thierer says. "Consumers will decide with their dollars whether or not [they want it] and how much broadband they want." Broadband is not seen as a "life essential," he says, and we need to wait and see if it does become one and respond accordingly.

Don't assume that every home should or will be wired, says Harold Furchtgott-Roth, visiting fellow at the American Enterprise Institute, a conservative Washington think tank.

Broadband's biggest advantage is in transferring large files, a function more common to big business than homes, Furchtgott-Roth says. "I think that marketing people misjudged demand when they forecast that demand would grow from zero to 70 percent in three years," he says.