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6/2/2011
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Global CIO: What North Carolina's Broadband Battlefield Means To You

Those of us who approve telecom budgets, whether in North Carolina or other states, know there really isn't a broadband marketplace.

Unless you're a telecom carrier, you should be interested in doing business in a region where the government is building out next-generation broadband infrastructure. Whether you work for a large business that requires fiber optic capabilities (or "lambdas," which are virtual fiber pipes), or whether you simply need IP service, the lower price/performance levels of such regions are highly attractive.

Regional governments should, of course, be cautious: Building a next-gen broadband system is a substantial investment, and without being clear about the applications, it's just like any other technology-without-a-plan investment. Witness the myriad government-sponsored metro Wi-Fi boondoggles that have come and gone in recent years, even when private entities such as Earthlink stepped in. As with any tech investment, start with the purpose, not with the technology.

But if economic development professionals get together with business and government leaders to craft a clear plan and policy, this can work. That was clearly the case in Chattanooga, with Volkswagen choosing that city for a new manufacturing plant based in part on its fiber optic network.

Contrast that experience to the one of Red Hat exec Michael Tiemann, who, while starting a side business in North Carolina, wrote an open letter to the state's governor stating that he had spent more than two years begging a broadband provider to "sell me a service that costs 50 times more than it should, and that's after I agreed to pay 100% of the installation costs for more than a mile of fiber."

The broadband battlefield in North Carolina and other states will ultimately take place outside the four walls of your business, but the implications for CIOs come down to several action items:

Site selection. Be aware of the telecom regulatory environment in any state your company is expanding into, especially as other states follow North Carolina's example. It may not be a make or break consideration, but it's one that you should bring up with your board when discussing site selection.

Broadband provider selection. Despite the difficulties of being a CLEC, there are still a few. It's in your organization's best interests to use your buyer power to support these businesses. If they dry up and blow away, pricing will only go up.

Executive education. There's a tremendous amount of spin from telecom carriers about why government shouldn't be enhancing the nation's broadband infrastructure. Business executives are frequently consulted by policymakers, and it can only help in the long term if you educate them on why broadband matters to your organization.

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Wireless investment. You can avoid the overly regulated, expensive, quasi-monopoly of land providers by using wireless in many cases, even when sites are miles apart. Next- generation infrastructure from providers such as Ubiquiti is far more reliable and capacious than previous generations. I've got experience with both, and the current offerings are reliable and economical. If building such infrastructure doesn't make sense for your organization, you can choose from plenty of experienced and reliable regional and national wireless ISPs, such as ERF Wireless. Again, it's in your organization's interests to support these providers.

If your executives are involved politically, make sure that they understand that the wireless providers can exist only because they operate outside of the CLEC regulations, using unlicensed or lightly licensed spectrum outside of the multimillion-dollar spectrum auctions. If all spectrum is available only to very large corporations, we'll end up with the same one- or two-provider situation in the wireless market that we have in the wired market.

Learning From North Carolina

North Carolina state representative Bill Faison says the state's new telecom law will "make it practically impossible" for cities to provide what he calls a "fundamental service." But if the telecom carriers are going to thrive, they're going to have to realize that lobbying for bad laws isn't a viable long-term growth strategy. Investing and creating new products is.

What's encouraging is that something like the Google fiber initiative, which offered to built a gigabit network and offer affordable services in one U.S. city, garnered so much interest--1,000-plus communities responding and thousands of citizens mobilizing. The gap, however, is that most folks don't understand that "Google Fiber" could happen in their own communities if business, government, and citizen leaders banded together to create and execute a plan, as they did in Chattanooga.

Supreme Court Justice Louis Brandeis once said, "It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country." Indeed. CIOs and other business executives must throw their support behind breaking the broadband status quo, and keep the ill-conceived anti-broadband experiment from spreading elsewhere.

Jonathan Feldman is a contributing editor for InformationWeek and director of IT services for a rapidly growing city in North Carolina. Write to him at jf@feldman.org or at @_jfeldman.

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