Keynote address by Acting Deputy Assistant Secretary Angela Simpson at Broadband Communities Summit

April 17, 2013

 

 

Keynote address by Acting Deputy Assistant Secretary for Communications and Information Angela Simpson
Broadband Communities Summit
Dallas, Texas
April 16, 2013

As Prepared for Delivery

Thank you Jim and thank you all for having me here today. This is my second trip to the Broadband Communities Summit, and like last time, I am very impressed by your level of dedication and the work that you all are doing to expand broadband in the United States. 

You have your work cut out for you in large part because you’re chasing a moving target. While capacity is proliferating, there is an ever-increasing need for speed.  The prescient – those who future proof – are in a great position to give communities the bandwidths they increasingly demand. And the demand is intense.  I was surfing the Broadband Communities website recently and saw a story on a survey of people in London and it showed that they felt they would be more stressed out by not having Internet than if their heating was turned off, their TVs didn’t work, or they didn’t have water. Based on that, I’d say the future looks bright for those in the business of broadband.

I feel like I’m preaching to the choir a bit today, talking about the role of broadband in economic development, but it is an important issue that bears repeating at every possible opportunity. And it’s fun to talk about, so I am going to go right ahead. First, I’d like to share my views about the importance of broadband to economic development. Next, I’d like to share some information about the Broadband Technology Opportunities Program (BTOP), which is the broadband grant program my agency, the National Telecommunications and Information Administration (NTIA) in the Department of Commerce, is currently administering and how BTOP projects are advancing the goals of economic development and job creation. 

I also want to emphasize that while infrastructure is important, digital literacy also has a key role to play. Lastly I’d like to share some lessons learned from BTOP and some ideas for next steps.

Broadband and Economic Development

I’m convinced that broadband’s role in this country’s economic development and future economic success is vital. I view broadband as truly a least common denominator for so much that we, as a nation, are striving to accomplish. Be it improved manufacturing, innovation, education, healthcare, applications, e-commerce, security you name it. Broadband is a great enabler of our international positioning and economic future.

A large majority of people need broadband to do their jobs. They need broadband skills to get those jobs.  Schools and hospitals are leveraging broadband to more easily and effectively reach their core customers, while saving money at the same time. And it’s not just about big infrastructure that is enticing major businesses to locate in a certain community, or increasing on-shoring’s attractiveness, although that’s great. It’s small-scale e-commerce, including both entrepreneurs and folks starting their own websites for their small businesses. They are tapping into the global Internet to get better prices for inputs to businesses, find new customers, make new partnerships, even teleworking.

BTOP by the Numbers

I got a front row seat to see just how much broadband impacts economic development through BTOP.  BTOP was a $4.7billion 2009 American Recovery and Reinvestment Act program that directed NTIA to fund projects to expand broadband infrastructure, bolster public computer centers, and increase sustainable broadband adoption. The overall goal was to benefit communities across the country based on the underlying belief that broadband would create jobs, stimulate economic development, spur private-sector investment, and open up new opportunities in employment, education, and healthcare.

By September 2010, we awarded grants to around 230 projects from all over the country, ranging from $100 million projects to develop statewide education networks to much smaller projects of less than $1 million to provide public computer centers in remote towns in rural America. Almost three years later, the projects have validated the underlying goals of the Recovery Act.

In terms of infrastructure, BTOP projects have built or upgraded infrastructure that would lap the equator four times so far. That’s more than 86,000 miles.  BTOP awardees have entered into more than 600 agreements with third-party providers to leverage or interconnect with their networks. The projects have connected almost 12,000 community anchor institutions, including approximately 10 percent of the nation’s K-12 schools. Awardees have installed more than 40,000 workstations in public computer centers benefitting approximately 20  percent of the country’s libraries. They’ve provided more than 9.9 million hours of technology training to approximately 2.8 million users. And they’ve generated more than 520,000 new broadband Internet subscribers. BTOP recipients have funded approximately 4,000 jobs each quarter for the past five quarters. This doesn’t even include all of the jobs people have been able to secure by having access to job training, job development and job search portals they have found thanks to public computer centers and digital literacy training.

BTOP by the Personal Stories

Let me bring this to a personal level by talking about a couple of specific BTOP projects. The first is Utah, where we funded $16 million toward the Utah Telecommunications Open Infrastructure Agency’s – or UTOPIA’s – community partnership project. The project is a collaboration between 16 municipalities in the Great Salt Lake region. In Centerville, 100 percent of city facilities now have access to the network thanks to the BTOP investment in middle mile infrastructure. UTOPIA is now also connecting last mile service. Ron Russell, Centerville’s mayor, recalled the city finance director telling a reporter in August 2011 that not one resident could subscribe to UTOPIA’s network. Fifteen months later, 22 percent of single-family homes took advantage of UTOPIA’s speeds and savings, and they expect that number to increase to more than 40 percent.

The UTOPIA project also aided in the re-purposing of a previous EPA Superfund site in the Bingham Junction development. Fiber in the area attracted numerous well-paying businesses, including FLSmidth, a Danish firm that supplies equipment and services to the minerals and cement industries, where the average salary is $90,000. BTOP funds enabled UTOPIA to provide critical infrastructure to additional city facilities and created network redundancy capabilities in this same development. Due to the influx of new businesses, Midvale City reports an upswing in average household income, as employees are choosing to live in new housing in the Bingham Junction area.

A second example is Georgia, where the $33.5 million North Georgia Network BTOP project recently wrapped up but is still having a positive impact throughout the area. The North Georgia Network project was the very first BTOP project announced by Vice President Biden in December 2009. The project covers the foothills of the Appalachian Mountains. Despite its 60-mile proximity to Atlanta, North Georgia is the kind of place that’s in danger of being left behind in today’s knowledge-based economy. As textile mills, auto parts factories, and construction trades contracted or disappeared, so have local jobs.

The North Georgia Network - a coalition of county economic development authorities, a state university, and two electric co-ops - aimed to construct the kind of advanced communications infrastructure needed to recruit information-age employers to the region. Today, the North Georgia Network is an 1,100-mile fiber network spanning across 12 counties and includes a core 260-mile fiber ring from Atlanta.  It is delivering high-speed connections to more than 300 businesses, 42 schools, five college campuses, six libraries, and dozens of other community anchor institutions. And it is driving economic growth and private-sector investment.

Impulse Manufacturing in Dawsonville was where Vice President Biden announced the BTOP grant. Impulse produces customized metal machine components for Fortune 500 companies. Before the North George Network was built, Impulse was forced to exchange massive data files with customers located across the globe by making do with slow, spotty DSL service that sometimes could not even hold a connection.  Impulse President Ron Baysden said the lack of reliable high-speed Internet access became an impediment to doing business. His employees were spending too much time just dealing with network problems. Customers even resorted to delivering data files on thumb drives. Today, Baysden says: “It’s the press of a button and it’s here.” Impulse Manufacturing recently landed a major contract to supply parts for a 1.4-million-square-foot manufacturing facility that Caterpillar is building in Athens, Georgia. With this new business, Impulse expects to double its employee base of 200 over the next three to five years. The new fiber-optic connection is one key reason Impulse will be able to handle the contract.

StreamVu TV is a small company in Cleveland, Georgia that provides technology that enables churches, schools, even the Grand Ole Opry, to distribute live and on-demand video programming over the Internet. When it launched five years ago, they had only a DSL connection and used a satellite antenna farm to send and receive online content. And it had to hire contractors located in places with more bandwidth to handle functions such as uploading content and providing call center support. Thanks to the North Georgia Network BTOP project, StreamVu upgraded to a 100-megabit fiber-optic connection through the local electric coop and is no longer outsourcing work to other places. The company just hired one engineer and plans to hire another, as well as a customer service representative and possibly more sales people. StreamVu also plans to relocate its headquarters to a new high-tech business park being built on the NGN route.

Just last week, I saw a news piece about NGN enabling a regional education network that will help students in North Georgia make massive strides in their careers and the economic status of their communities.

Digital Literacy and Economic Development

I mentioned earlier that it’s not just about big infrastructure. Indeed, broadband-fueled economic development doesn’t have to be about infrastructure at all.  We see digital literacy as key to economic development as well. This includes training to compete in the digital economy, whether it is getting online for the first time or taking advanced coding classes. This also includes distance education, which gives people tools they might not otherwise have access to and enables  them to stay in their communities while taking advantage of world-class education. And it includes empowering entrepreneurs to leverage the tools of Internet commerce to expand markets, obtain lower prices for inputs, use technology for bookkeeping and reporting, and the like.  These all are investments in economic development. Investing in the digital literacy of people within communities helps attract businesses and economic development by having a source of capable manpower.

Having the people in communities ready to leverage broadband infrastructure is an important piece of the puzzle. I was visiting with BTOP awardees from New York City last week whose projects focus largely on digital literacy training across many demographics. I asked them what classes were most in demand, and without hesitation they said multimedia classes that people need for workplace uses. I was a bit surprised by that but also impressed that such advanced digital literacy training was helping take people to the next level at their jobs. In New York, 96 percent of libraries are redefining their service model and are providing workforce development programs focusing on digital literacy. You’ll be hearing from New York regarding this tomorrow. This is a national trend and demonstrates one way community anchors can flex to advance the economic development of their communities and residents.

Another example of translating digital literacy into economic development is the California Emerging Technology Fund (CETF).  CETF is using a $7 million Recovery Act investment to provide computer, digital literacy, and workforce training for low-income communities and other vulnerable populations. CETF works through 19 partners statewide, including non-profits that offer job training and career development services for the unemployed and homeless. Two of those organizations, Chrysalis in Southern California and The Stride Center in Northern California, are using Recovery Act funding to train clients in information technology skills and place graduates in IT positions. CETF also works with partners such as the Chicana Latina Foundation and Youth Radio, to raise awareness of the importance of broadband and ensure its programs serve California's diverse population - from Hispanic farm workers in the Central Valley to seniors in San Francisco's Chinatown. Classes are offered in Spanish, Chinese and other languages. 

To date, over 2,600 people, including former addicts, parolees, and the chronically unemployed are working in information and communications technology jobs because of the Recovery Act investment. These jobs pay starting salaries of $40,000 to $60,000 a year, bringing economic self-sufficiency and offering promising futures.

Another good example is Minnesota, where the Blandin Foundation and 19 project partners received a $4.7 million grant award on behalf of 11 rural Minnesota communities. Through this grant, the Minnesota Intelligent Rural Communities (MIRC) coalition brought a network of resources and support to rural Minnesota individuals and communities - especially those unemployed and seeking employment, small businesses, coalitions of government entities, and local leaders.  MIRC's "Intelligent Community" framework galvanized the attention of community leaders around knowledge economy-related challenges by focusing on five dimensions of an intelligent community: broadband infrastructure, workforce, innovation, digital inclusion, and marketing and advocacy. Over an 18-month period between 2010 and 2012, the communities improved across all of these components.

MIRC training and technical assistance partners found that hosting opportunities for local businesses to learn from one another ("business-to-business") were successful. For example, the Minnesota Renewable Energy Marketplace partnered with a number of demonstration communities to develop and sponsor a series of "social media breakfasts" at local restaurants. Local businesses were invited to present and hear from one another about how they were using social media to advance their businesses.

One resident from Winona commented, "MIRC has changed the way we think about ourselves and act as a community." In Akeley, MIRC trainees catalyzed a community campaign to reinvigorate the dying Chamber of Commerce, which saw its membership grow from just 4 to 44.  Thanks to the success of the BTOP project, Blandin is launching the “next generation” of the MIRC program with nine new communities across rural Minnesota.

BTOP and Jobs

Before I wrap up, let me touch for a moment on the topic of jobs and what we’ve learned from the BTOP projects.  It’s always been difficult to answer the seemingly simple question “How many jobs has BTOP created?” The calculation the BTOP awardees must use in their direct jobs reporting ends up being full time equivalents per quarter. It’s not the most easily decipherable and useful metric. 

Once it hit its stride, BTOP has been in the top 10 or so of Recovery Act programs in terms of job creation. Like I mentioned earlier, this translates into approximately 4,000 jobs per quarter for the last five quarters. Based on our analysis of jobs correlated to expenditures, the bad news is that we’ve hit the top of the bell-curve. This is natural since some projects are already finished and other projects are in the final year of their period of performance, and overall production has peaked or is slowing down. The good news, though, is that we’re seeing that although the overall job number is declining, BTOP is showing more created/retained jobs than expected. The other bit of good news is that with so much BTOP construction in the rear-view mirror, the time is ripe for folks like you here today to consider reaching deals with the awardees to leverage their primarily middle-mile infrastructure to extend the benefits into new communities and into last-mile opportunities. Several of them and their partners are here at the summit, like MCNC, One Community, G4S, Massachusetts Broadband Institute and UC2B. I strongly urge you to take BTOP awardees up on their available services.

Conclusion

So what’s next? The BTOP projects are in the home stretch and it doesn’t seem likely that there will be another Recovery Act broadband initiative in the near future. At NTIA, we intend to do all we can to share lessons learned and best practices from the BTOP projects. We also intend to share the results of the BTOP qualitative and quantitative analyses being done by ASR Analytics, which is conducting a thorough assessment of the impact that the BTOP grant awards are having on broadband availability and adoption and in achieving economic and social benefits in areas serviced by the grantees. You are probably aware that this type of analysis is very difficult to do, and we hope that you will be able to leverage the results into economic development opportunities.

There are other sources of federal funds that can be leveraged including NTIA’s sister agency the Economic Development Agency, the Rural Utilities Service, the Federal Communications Commission and the upcoming RESTORE Act initiatives for the Gulf States.  But as Blair Levin spoke to you earlier, I’d like to also emphasize that we all must take ownership of the issue. States, cities, towns and communities of all sizes should do all they can to encourage their own broadband-fueled economic development. Utilize the Fiber to the Home Council’s toolkit and leverage the partnerships like Connect to Compete, US Ignite and Gig U. Utilize DigitalLiteracy.gov and the broadband adoption toolkit NTIA will be releasing in a couple of weeks. Together, we can achieve the best economic development broadband can provide.

Thank you very much.