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					                               Broadband

John A. Dillman III
Executive Director, Upper Shore Regional Council
Board of Directors, Rural Maryland Council
Founding Chairman, Maryland Broadband Cooperative

Upper Shore Regional Council
122 N. Cross Street
Chestertown, Maryland 21620
410-810-1375
jdillman@kentgov.org
                Broadband?
•   What is it?
•   Do we have it?
•   Do we need it?
•   If we need it, why don’t we have it?
•   How can we get it?
•   What are we going to do with it?
                What is it?
• Broadband is an Internet connection that gives
  you high-speed access and downloads for a flat
  rate monthly charge.
• Everything works faster, from downloading
  emails and files (such as pictures & mp3's) or
  streaming movies and radio.
• Broadband services are 'always-on'. This means
  that broadband is a permanent connection to the
  Internet. A broadband connection lets you
  access the Internet from the minute you switch
  on your computer.
                       What is it?
• The Federal Communications Commission’s (FCC) prior definition of
  broadband speed was 200 kilobits per second (kb/s).
• Recently the FCC replaced this definition with seven broadband
  tiers starting at 768 kb/s, and extending to speeds greater than 100
  megabits per second (Mb/s).
• A 2008 study by the Organization for Economic Co-operation and
  Development showed that the United States ranked 19th with an
  advertised rate of 9.6 megabytes per second (mbps). The top
  three countries were Japan with 92.8 mbps, Korea with 80.8 mbps
  and France with 51 mbps.
• United States typical data rates run from about 0.5 Mb/s for the
  newer cellular telephone systems, progressing to 20 Mb/s for optical
  fiber to the home.
                    Do we have it?
• The U.S. ranks 24th among all nations for broadband
  penetration*
• In growth of penetration, the U.S. ranked 20th annually
  and 24th out of 30 countries semi-annually.
• We no longer have more people connected than other
  nations – China now has the most broadband users.
• Why?
             » Availability
             » Competition

•   *Organization for Economic Cooperation and Development (OECD).
               Do we have it?
• 45 million of the more than 117 million households (38%)
  in the United States have no Internet service.*
•
• 58 million households or 49% percent of the households
  in the United States do not have Broadband.*
                      *Insight Research Corp. –Dec. 2009

• USDA study found that, in 2007, while 55% of U.S.
  adults had broadband access, only 4% of adults in rural
  households could make the same claim.
                                                               OECD broadband penetration and population densities
          Broadband penetration, June 2009                                                                                                                          Population density, 2006
     40                                                                                                                                                                                   600
                                                                                                        Broadband penetration (subscribers per 100 inhabitants, June 2009)
     35
                                                                                                        Population density (inhab/km2, 2006)                                              500
     30
                                                                                                                          Simple correlation = 0.26                                       400
     25

     20                                                                                                                                                                                   300

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    Source : OECD          Broadband average m onthly subscription price, Oct. 2009, USD PPP



                                        Greece                   27.72
                                            Italy                 29.91
                                 United Kingdom                   30.80
                                         Ireland                   31.33
                                         Finland                   32.46
                                       Sw eden                      32.50
                                         France                     32.70
                                    Sw itzerland                    33.25
                                          Japan                      35.18
                                          Korea                           38.50
                                       Germany                            38.87
                                       Hungary                            39.39
                                        Belgium                           39.75
                                         Poland                           39.85
                                       Denmark                             40.20                                      Average Subs cription Price, USD, PPP
                                         Iceland                              40.63
                                                                                                                      Median
                                    Netherlands                               41.01
                                 Slovak Republic                                 46.85
                                          Spain                                   48.34
                                   United States                                   49.25
                                         Austria                                      50.11
                                 Czech Republic                                       51.64
                                        Canada                                          54.24
                                         Mexico                                          56.71
                                   New Zealand                                            57.06
                                       Australia                                              59.45
                                        Norw ay                                                 62.76
                                        Portugal                                                          79.53
                                    Luxembourg                                                                    91.29
                                         Turkey                                                                                           135.36

                                                    0     20             40              60              80         100        120        140         160
                  Do we need it?
• The secondary impacts of telecommunication investment on supply
  in the economy could eventually have the largest impact of any
  government spending on telecommunications.
• Telecommunication networks helped improve the efficiency of
  virtually every sector in the economy.
• One of the key benefits that broadband brings to newly-served areas
  is improved access to government services.

   – Organization for Economic Co-operation and Development; Working
     Party on Communication Infrastructures and Services Policy
       • May 19, 2009


   – For full paper see:
     http://www.olis.oecd.org/olis/2009doc.nsf/LinkTo/NT00002D36/$FILE/JT
     03264896.PDF
Do we need it?
• Fundamental for economic and social
  development.
• Increase the impact and efficiency of public and
  private investments.
• Needed as a complementary investment to other
  infrastructure for buildings, roads, transportation
  systems, health and electricity grids, allowing
  them to be “smart” and save energy, assist the
  aging, improve safety and adapt to new ideas.
                  Do we need it?
• Telemedicine and telehealth:
   – information, products, and services confer real economic
     benefits on rural communities.
   – reducing transportation time and expenses.
   – treating emergencies more effectively.
   – reducing time missed from work or school.
   – increasing local lab and pharmacy work.
   – generating savings for health facilities from outsourcing
     specialized medical procedures.
• E-government:
   –   Information dissemination.
   –   Citizen/customer services.
   –   Government business transactions.
   –   Governance.
If we need it, why don’t we have it?
• Cost of infrastructure versus number of
  paying customers:
  – Fiber optic network building cost on average
    $75,000 per mile.
     • Right of way, mountainous terrain, environmental
       concerns all raise this amount.
• Wireless technology and newly evolving
  systems may reduce cost.
  – Fiber needs to be the backbone.
     • Increasing demand for capacity is geometric.
            How can we get it?
• Government subsidy.
  – ARRA
       • NTIA & USDA
  –   State and local programs.
  –   Sharing federal demands.
  –   What do your ISP’s need to expand?
  –   What can you do to create competition (and bring
      prices down)?
• Public/private Partnerships.
• Private partnerships.
• The Electric Cooperative Model
Successful government investment: balancing
connectivity, competition, innovation or growth
and social benefit.
What are we going to do with it?
• National and local security.
• Smart Grid – requires broadband access
to homes and businesses.
• Telehealth/telemedicine.
• Video conferencing – you can work
anywhere…including the French style
outdoor café.
• Your kid’s video games become healthy
outdoor activities.
What are we going to do with it?
• Agriculture
• Biotechnology
• Connecting Community Colleges to major
  Universities.
• Tourism
• Libraries
• If it’s not connected to the internet, it may
  disappear!
Summary of Annual Consumer Benefits from Universal Broadband Deployment
($ Billions per Year)
Source                                                  Low Estimate          High Estimate
Direct Estimates:
Broadband Access Subscription                           $284 billion          $427 billion
Household Computer & Network Equipment                  13                    33
Total Benefits                                          $297 billion          $460 billion


Alternative Estimates – Benefits Deriving from:
Shopping                                                74                    257
Entertainment                                           77                    142
Commuting                                               30                    30
Telephone services                                      51                    51

Telemedicine                                            40                    40

Total Benefits                                          $272 billion          $520 billion
Souce: The $500 Billion Opportunity:The Potential Economic Benefit of Widespread Diffusion of
Broadband Internet Access, by Robert W. Crandall and Charles L. Jackson, July 2001 for the Brookings
Institute.
        Contacts

The National Telecommunications and
  Information Administration.
  http://www.ntia.doc.gov/
The Maryland broadband Cooperative
  http://www.mdbc.us/
The Mid Atlantic Broadband
  Cooperative
http://mbc-va.com/index.html

				
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posted:6/29/2012
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