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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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May 30, 2008 10:48 AM

VidChat: Discussing Broadband as Driver of Economic Development with Michael Curri

In this edition of App-Rising.com's VidChat, I speak with Michael Curri, founder of Strategic Networks Group, a global consulting firm that helps quantify the economic impact of broadband and guide communities and businesses in making the most of what connectivity has to offer.

This is must-watch video for anyone interested in how broadband drives economic development, especially local community leaders.

There were a number of good points made by Michael during our conversation. Here are some of the highlights:

- Many of the benefits of broadband are off the balance sheet for the carriers. When a network operator is considering deployment, they're only looking at the financial aspects of how can they make money. But there are many more benefits for communities to having higher capacity networks deployed and used. Balancing these two realities is one of the bigger challenges and opportunities of the broadband revolution.

- Michael reasserted the growing belief that broadband is not a field of dreams. You can't just build it and they will come, you need to be thinking about how to use the networks as much as how to get them built.

- I like how Michael sums up the benefits of broadband to businesses: increase revenues, decrease costs, and improve customer service.

- He asks a very good question of communities: what kind of economy do you want to be? Where do you want to be in five years? It's vitally important to know where you want to be in order to know where to go and what to do. And this gets to the heart of what Strategic Networks Group does, helping communities figure out where they are and where they want to go in the use of broadband to drive economic development.

- Some of the reports Michael mentions being available on their site can be found here.

- This was an eye-opening number for me: according to Michael's research, on average every dollar spent on broadband infrastructure results in a tenfold multiplier impact on GDP. So if we were to put $100 billion into building out fiber across the US, we can expect to realize a trillion dollars of economic growth. Talk about a no brainer!

- When talking about the value of deploying broadband, the ability to attract new companies to the area is often cited. But according to Michael, 70-80% of the growth broadband helps realize comes from local companies finding greater success. I think this is great news as while there's nothing wrong with attracting new companies, there's also nothing better than being able to make existing businesses more profitable as they tend to have deeper roots in their communities.

- As an add-on to this, I found it interesting that it takes 2-3 years for businesses to realize the full value of broadband from when they start committing to using it heavily.

- One big point Michael emphasized towards the end of our conversation is how important increasing takerates is to improving the viability of networks. Basically he's pointing out the simple truth that if you can get 60% to subscribe instead of 30% that that enhances the economics dramatically for anyone trying to decide if they should deploy greater capacity. He even went so far as to say that if you can get 90%, that you don't even have to pay for service. Now I'm not quite sure how that works but I'm going to follow up with him to find out.

- I asked him about the impact of fiber vs. other broadband technologies economic development. He admitted that while some businesses can really use that capacity, in general having higher speeds doesn't make a huge difference today. That said, he did cite the fact that in talking with businesses in fiber communities in the US he's learned that the most significant enabler isn't speed, it's been reliability. They claimed that copper technologies would go out on a regular basis, whereas they can't remember when that's happened with fiber. Michael then makes the very salient point that as businesses come to rely more heavily on broadband, the importance of having reliable networks only increases.

I consider it a great fortune to have someone like Michael contributing to the mindshare on App-Rising.com. He and I are making plans to dive into many specific areas around the general topic of how broadband can drive economic development over the coming months. If there are any issues in particular you'd like us to address, be sure to add them in a comment below.

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Comments (1)

I'm an industry analyst who's followed muni broadband since 2005. Michael and I have similar views on the economic development impact of these networks. Last year I surveyed over 300 economic development professionals to assess their take on muni broadband. You can read the results of that survey in this free report (no registration required) - www.successful.com/msp/snapshot-7-07.pdf. Data here reinforces some of Michael's points.

Posted by Craig Settles on June 2, 2008 6:42 PM

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