Rural Broadband Will Falter Without USF, OPASTCO Warns

Gailey said his company’s customers have demanded broadband with their phone service and Totah serves many small businesses, city halls and other customers in its service area. “Today we're a success story,” he said. “But as the USF program increasingly comes under attack form all areas it could easily turn into a story of disaster. We could create a rural America where small businesses aren’t able to get the services they need.” Gailey said his company couldn’t provide affordable broadband service without USF support.

Other panelists described the digital divide between communities with and without broadband and the problems faced by small businesses without reliable Internet connections.

Broadband deployment is crucial to the growth of small business, said Cheryl Johns, assistant chief counsel in the Small Business Administration’s Office of Advocacy. “Some areas that favor low commercial rent are more favorable to development,” she said. “Broadband can help with telecommuting, home-based businesses. And actually 52 percent of all small businesses are home-based. Broadband can help produce areas that enable a high-tech corridor. Broadband also can help with advanced education, and areas with higher education tend to be better areas for small businesses to develop.”

Timothy McNeil, the National Conference of Black Mayors’ director of development, said the city halls of many member officials lack broadband. “The only way we communicate with some of our mayors is by phone and by fax,” McNeil said. “Our communities continue to be left behind. It’s almost becoming two worlds or the next civil rights area. We're being left in the dust.”

McNeil cited the example of a small town in Louisiana that would be eligible for EPA money for clean-up. But the city doesn’t have broadband and can’t apply online. The mayor said, “'Can you fly down and get the information and go back to D.C. and upload it?'” McNeil recounted. “It would be easier for me to fly all the way down to Louisiana than it would be for them to get online.”

David Ferreira, the vice president of government affairs of the U.S. Hispanic Chamber of Commerce, said Spanish- speakers wait two years for English classes on average. Hispanic communities need better access to centers where broadband is available, to give people access to online education, he said. “Local communities report that a key to their future is broadband,” Ferreira said. “In order to attract businesses and residents they must be able to provide the necessities, and this increasingly includes broadband.”

Todd Flemming, the CEO of Infrasafe, a small electronic- security business in Orlando, Fla., said starting a business today is significantly different than when he launched his first company in 1989. VoIP and e-mail have made communications with offices around the world much cheaper, allowing him to easily expand outside of Orlando, Flemming said. The company uses software to manage its sales force that used to be available only to very large companies. Infrasafe also uses the Internet to compete for contracts and customers all over the world.

“The Internet and broadband access has really made quite a bit of difference as far as how you go about and do business and the amount of money it requires to start and devise a business and the types of products and services,” Flemming said. “These are probably some of the times that provide some of the greatest opportunities to level the competitive playing field.”

Warren Brown, the CEO of Cakelove, a bakery with outlets in the Washington area, said his company has been able to grow quickly because of ready access to fast Internet connections. “When I first began I was doing payroll and various things on dial up and it would literally take like four hours to get stuff done,” he said. “The best thing that broadband has done is just speed things up everywhere, and it has made it possible for me to really leverage my time.” Brown said Cakelove recently added online sales. “It’s what people expect in this day and age.” The company put instructional videos on its Web site, and that helped the company build its image. “We've had, for example, 27,000 views of how to make Italian meringue butter cream,” he said.

“As small business I think we're all at very different levels in sophistication and usage of our technologies,” said Hung Nguyen, proposal manager at HCI/Integrated Solutions. “Some are online 24/7, some have BlackBerrys, others are just barely accessing the Internet just to check e-mails.”

“If I'm going to start a business somewhere, it had better have access to the Internet,” said Anthony Washington, the CEO of Destiny Broadband. “It’s based on my connectivity to this world that’s getting smaller and smaller.”