Three cheers for the digital divide?

Earlier this week, Minnesota’s own Thomas Friedman wrote an editorial that caught the attention of a lot of folks working towards better broadband. Friedman suggests that to become a world leader, America should not focus on getting mediocre broadband to the masses, but instead strive to get “ultra-high speed” broadband to the top 5 percent…

Right now, though, notes Levin, America is focused too much on getting “average” bandwidth to the last 5 percent of the country in rural areas, rather than getting “ultra-high-speed” bandwidth to the top 5 percent, in university towns, who will invent the future. By the end of 2012, he adds, South Korea intends to connect every home in the country to the Internet at one gigabit per second. “That would be a tenfold increase from the already blazing national standard, and more than 200 times as fast as the average household setup in the United States,” The Times reported last February.

Therefore, the critical questions for America today have to be how we deploy more ultra-high-speed networks and applications in university towns to invent more high-value-added services and manufactured goods and how we educate more workers to do these jobs — the only way we can maintain a middle class.

I will remind readers (as Friedman does) that Blair Levin runs the Aspen Institute’s Gig.U project, a consortium of 37 university communities working to promote private investment in next-generation ecosystems. I will also remind readers that the National Broadband Plan also sanctions a digital divide that strives for 100 Mbps for 100 million households and 4 Mbps for the rest – much of “the rest” will be rural communities with lower population density and more challenging terrain for installing infrastructure.

It’s time for “the rest” to push back on these suggestions that somehow rural areas are not worth the investment.

Issue One: Friedman is taking a 20th century view on a 21st century technology by assuming that…

The best of these ecosystems will be cities and towns that combine a university, an educated populace, a dynamic business community and the fastest broadband connections on earth.

With the fastest broadband connections, geography is no longer a barrier to education or diverse conversations. More and more universities are offered classes online (MIT is offering coursework for free; in 2008, (former) Governor Pawlenty said he wanted 25 percent of all MNSCU credit be made available via online by 2015.), which means if you have a fast connection outside Blackduck, Minnesota you should still be able to experience higher education.

There are debates on the quality of online education, but as Friedman asserts that one goal is to be able to work collaboratively with colleagues around the word in real time that we have to accept that education obtained through the same means would be acceptable…

When eight doctors from around the world can look at the same M.R.I. in real time, said Levin, it enables the acceleration of small breakthroughs, which is where big breakthroughs eventually come from.

Issue Two: Friedman poses a question to candidates…

How do you think smart cities can become the job engines of the future, and what is your plan to ensure that America has a strategic bandwidth advantage?”

The fallacy is to believe that America will have a strategic bandwidth advantage while sanctioning a digital divide. In his article, Friedman points out that South Korea is striving for world-class and ubiquitous broadband coverage.

By the end of 2012, he adds, South Korea intends to connect every home in the country to the Internet at one gigabit per second. “That would be a tenfold increase from the already blazing national standard, and more than 200 times as fast as the average household setup in the United States,” The Times reported last February.

How does focusing on our top 5 percent help us compete with that? Friedman seems to have forgotten Metcalfe’s Law: the value of a telecommunications network is proportional to the square of the number of connected users of the system. Only when we get everyone online will we be able to realize full potential. One thing American still retains is a diversity of voices – and helping those voices join the conversation is another way to spur innovation.

Issue Three: Friedman seems to imply that an investment on behalf of the middle class (and I will add rural) will have a higher Return on Investment than an investment in the Middle America…

Therefore, the critical questions for America today have to be how we deploy more ultra-high-speed networks and applications in university towns to invent more high-value-added services and manufactured goods and how we educate more workers to do these jobs — the only way we can maintain a middle class.

This sentiment in this claim has spurred several of the 300 plus comments on the article. Last year Minnesota Rural Partners sponsored research that demonstrated that investment in rural areas benefitted not only the rural areas but trickled up to metropolitan areas as well – especially in terms of jobs, which seems to Friedman’s focus as well. Here are a couple of indicators from the report…

  • If rural Minnesota’s manufacturing cluster experiences a 6 percent growth in output ($1 billion), the urban area picks up 16 percent of all the jobs gained and 38 percent of all additional output.
  • The reverse is also true: a $1 billion decrease in manufacturing output in rural Minnesota results in 1,043 jobs lost and a loss of $207, 822,848 in revenue among Twin Cities area businesses.

I am pleased that Friedman has helped lift of up the issue of broadband in the US and offered it up as a solution for unemployment and job scarcity. I take umbrage as his approach to focus investment in the top 5 percent at the expense of the rest. As I’ve said there are at least three issues with his approach:

  1. He is using last century’s definitions of communities to promote a modern tool that discredits that definition.
  2. He turns a blind eye to both the investment being made in other countries to support ubiquitous broadband and to Metcalfe’s Law, which indicates that the larger the network, the great the value
  3. He seems to assert than an investment made on behalf of rural communities is more valuable than an investment in those communities.

Finally I think he undersells America. There was a day where we strove to be biggest and best – maybe we need to consider ubiquitous and ultra-fast broadband.

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    Ann Treacy's picture
    Ann Treacy

    Ann Treacy lives in the Twin Cities. For work, she writes about broadband in Minnesota. After hours she write about travels and adventures around town.

    Comments

    quick vs slow ROI means different investment

    Good point Bill! Makes me realize maybe I should have become a Division 1 football coach.

    I think you're right, failure to find investment in these areas is a different issue – and the funding is completely different. At the Broadband Task Force meeting today one of the rural providers mentioned that he was talking to a provider from Minneapolis who talked about how hard it could be to serve the lower population densities in some neighborhoods – he was talking about 50 homes per sq mile – the rural provider said his most densely populated areas didn’t come close to that number.

    The business case is just entirely different. The university towns may need investors – but for the reasons you mention – then can recoup costs quickly. We’re talking VC or angel investing. Rural areas need grants, subsidies and other incentives because the ROI will be so much slower.  

    Digital Investment

    Great column Ann!

    If there is anyplace where gigabit broadband can be deployed successfully through any number of investment strategies - local government, private sector, university endowments - it should be in the places where Blair Levin is targeting.  No subsidies should be required.  For the most part, these communities are the "NFL Cities" that already have huge broadband connections.  These communities have density, huge bandwidth consumers for customers, IT technologists in plenty.  If Ann Arbor, Palo Alto, Boston, or any of these University towns need broadband stimulus to get these services, it clearly indicates a failure of local leadership and local incumbent providers to figure it out.

    The money invested in the annual salary of a mediocre Division 1 football coach could finance a pretty good network!