States Must Become More Conscious of Connectivity

CHICAGO – You must have a solid infrastructure on which to build a 21st century economy. Having a good infrastructure has always been important to the economic growth of a municipality and a state.

The infrastructure has traditionally been viewed as transportation (i.e. rail, waterways, air, highways and water). To compete globally today, the definition of infrastructure must also include network infrastructure and the ability to have broadband connectivity.

Just as you would not locate your company on a back road that is far away from an expressway, airport or train, you would not want to be connected to the information super highway through a dial-up line or even DSL.

You need something greater. Strategic decisions for locating businesses are influenced by the availability and quality of network infrastructure. Those who don’t understand this are living in the era of horses and buggies.

States Poised For Economic Growth

On the topic of overall broadband policies and practices in the U.S., here are current answers to questions posed in a 2004 survey by the California Public Utilities Commission.

Have states moved forward from their positions in 2004 or have they actually slid backward? Since then, some have limited or even restricted municipal deployment of broadband services. That has been a step backward in trying to create a positive environment for economic growth.

The California commission survey asked some excellent questions.

It provided a quick and concise overview of which states are leaders and laggards in understanding the need to include a state-of-the-art network infrastructure as part of a platform for future economic growth. This survey is something all states should answer on an annual basis.

The environment is changing rapidly as more states become aware of the need for broadband deployment for economic development. From a corporate standpoint, reviewing the answers from this type of survey would sway companies planning new facilities to locate in one state or another.

Some of the questions that seem to be devoid of state oversight were:

  1. Does the state set rates for broadband services?
  2. Does the state set broadband service quality?
  3. Does the state have expedited rights-of-way policies?
  4. Does the state have a definition for “advanced services”?

In the past, states would rely heavily on input from the incumbent carriers for their regulatory framework regarding telecommunications. Outside objective expertise was not sought out because of the cozy environments that regulators had with incumbents.

Today, we have to break away from that influence because it doesn’t have the state’s best interest in mind. This is not an easy task. In some cases, more lobbyists and research firms have been used to promote incumbent views and restrictions on municipal broadband endeavors. More restrictions have resulted and competition has been nullified.

Eroding Tax Base

Downsizing, outsourcing and offshoring in various corporations have contributed to substantial shifts in the tax base of some states. This is why some states are in the red by billions of dollars. Some legislators are unaware of the problem or just don’t want to recognize and tackle it.

Legislators have not adjusted their spending programs or created safeguards to redevelop or replace industries that are in decline or have left the state. Relying on a horse-and-buggy taxing approach will not solve the issues created today.

With large companies like banks and manufacturers looking at mergers, buyouts, changing locations and consolidation as well as closing offices, data centers and other corporate facilities, this reality can shift what was once a stable tax base.

No state or municipality can take for granted that they will always have an industry or key company that provided jobs, tax revenues and a stable economy.

They must create and foster an environment that provides a solid infrastructure. In today’s economy, this includes a network infrastructure. If they do this, they will always attract and maintain a diversity of viable companies.

Carlinism: The states that create and foster a positive platform for network infrastructure are going to capture businesses from the states that don’t.