SMALL COMPANIES SEEN AS UNTAPPED MARKET FOR BROADBAND

Among other reasons small companies should embrace broadband is that it will facilitate what could be killer application, “human-to-human communications” such as telecommuting, said William Mularie of the Telework Consortium. Telework could solve 2 critical problems, he said: (1) Highway congestion caused by commuters. (2) Personal security concerns. After Sept. 11, Mularie said, people are taking closer look at how employees and company assets are often centralized at single location, such as Cantor Fitzgerald’s office in World Trade Center. However, he said businesses now couldn’t operate in distributed fashion because of current technology.

For smaller businesses, broadband is essential to connecting them with their customers and trading partners wherever they may be, said Mike Weir of Cisco Systems. Accenture’s Paul Nunes said that to get ahead, small and medium-size enterprises (SMEs) needed greater interactivity with customers without having to add new employees. NFIB’s Bruce Phillips said it was all about getting more bang for buck. In NFIB survey last spring, 48% of respondents said there was no competitive disadvantage to not having broadband, he said. Many small companies still faxed documents because their software wasn’t compatible with that of larger businesses, Phillips said, and SMEs involved in business-to-business (B2B) activities were on very elementary level. Until SMEs understand benefits of B2B, he said, they won’t be convinced of need for broadband.

Bruce Josten of the U.S. Chamber of Commerce said that for small companies, computer technology was useful but one that wasn’t central to their businesses. Citing U.S. and Canadian studies, he said benefits of Internet weren’t apparent to many SMEs, which used it mainly for e-mail. Studies suggest that local businesses with local employees and customers don’t see need for Internet connectivity and technology, Josten said, and E-business must be “proven as essential to them.”

Toby Redshaw of Motorola said the small business sector would become “massively important” as broadband was deployed. SMEs are more agile, he said, and can adapt their technology more easily than big companies. Redshaw said they also would be able to “aggregate and confederate” very quickly to amass negotiating power with larger corporations. IBM’s Chris Caine said one way to link SMEs could be through “grid computing” -- virtual set of distributed information technology (IT) services that would let SMEs link up without having to buy IT products themselves, but that won’t happen without broadband.

Govt. should lead by example, several speakers said. For instance, Caine said, govt. doesn’t even know how many of its non-hq facilities are connected by broadband. Harris Miller of Information Technology Assn. of America said that if govt. wasn’t using telework, SMEs wouldn’t either. Stagg Newman of McKinsey & Co. said that at federal, state and local level, govts. must understand barriers to broadband and decide whether or not to eliminate them. Need for govt. standards is less critical than spectrum issues, tax incentives and best practices guidelines, he said. But Dylan Brooks of Jupiter Media Metrix countered that industry shouldn’t wait for govt. to show way. Govt. has spurred demand for broadband by getting it to schools and libraries, he said, but it’s still not available to consumers and SMEs. Miller proposed private sector-govt. partnership to develop case studies for use in educating SMEs about benefits of broadband.