Is There a Broadband Stimulus Job For You?

The government is deploying another $795 million of the broadband stimulus funding, and just in time. The United States has been lagging other countries, including Japan and Korea, when it comes to the amount of bandwidth available to businesses and consumers at any reasonable price. At the same time, we are in what has been dubbed “The Great Recession,” with unemployment stuck at unreasonably high levels. Could there be a win-win here?

It looks like there may well be benefits for both today’s jobseekers and the long term prosperity of the United States. One report estimates
that the new high speed internet build-outs will create as many as 5,000 jobs right away. That may sound like a pittance, considering the millions looking for work, but it’s a move in the right direction. It’s also likely that the benefit from these jobs will multiply as new broadband resources come online. Once the bandwidth is available, there will be the urge to put it to good use. That means more computers, more wireless networks, more demand for video, more cloud services, and so on. It’s the nature of investment. There’s a multiplier effect as we gain new capability.

I deal mostly with business bandwidth. Since getting involved in this field nearly 7 years ago, I’ve seen a steady increase in demand for higher and higher speeds at lower prices. I originally launched T1Rex.com to sell competitively priced T1 lines. These have been the staple of small and even some medium size businesses. But a T1 line tops out at 1.5 Mbps. Seven years ago that was still considered a goodly amount of bandwidth. Now many, many businesses are moving up to 10 Mbps Ethernet. The pricing is similar to what T1 lines used to cost and the bandwidth is high enough to support rapid file transfers, fast Internet browsing and real-time video. What’s just as attractive as the speed and the price is the fact that 10 Mbps Ethernet can be delivered on existing copper wiring.

We’ve got a copper-based infrastructure that needs to move to a fiber infrastructure. All that copper is thanks to an earlier government initiative to ensure that every business and home had access to reasonably priced telephone service. All that’s happened is that those analog phone lines have been re-purposed for digital transmission. It’s the same copper. Some of it has been in the ground for a century.

But copper has its limits. Ethernet over Copper is good for up to 50 Mbps if you are within a mile or so of the central office. If you are out in the boonies or have the need for more bandwidth, you really need fiber. That’s no problem downtown. It’s a big problem as you move away from the densely packed city cores. Why no fiber where there’s lots of copper? It’s because the lower the population density, the more expensive per drop it becomes to bring in fiber optic services. It quickly becomes too expensive for businesses and ridiculously expensive for consumers.

This is what the broadband stimulus is intended to help fix. The idea is to build out what is called the “middle mile.” That’s the span from the provider’s main points of presence to smaller towns, neighborhoods and industrial parks. From there, it’s not so costly to hook up the “last mile” to actual users. That last mile or fraction thereof might be fiber, wireless, or even high speed copper.

We really need to think of our broadband infrastructure as a standard utility. No one thinks twice about expecting electricity and telephone service to be available. In most areas, water, sewer, and natural gas hookups are a given. Fiber optic lines need the same status. Bring in a bundle with both copper and fiber strands and you’ll have the best of both worlds. What’s more, our nation will have the 21st century resource to continue being a leader in science, business, education, and health care. It’s what we’ll need if we expect to maintain our lifestyle in a world where other nations are deploying broadband Internet as a strategic resource.

Got a Bandwidth Jones

How much bandwidth is enough? Silly question. How much money is enough? How much good health? How much chocolate? When it comes to bandwidth the more that's available, the more that we find use for. What's more, the most desirable bandwidth of all is wireless and fiber optic. Wireless is for freedom of movement. Fiber optic is for massive throughput. Property owners and managers that offer their business clients both may well find themselves more in demand than even health, wealth and fine quality chocolate.

A new report on business and consumer bandwidth usage says that IP traffic will grow by three times more in the next four years than what it has reached after the first 30 years. Even more interesting, the majority of that traffic will be located on private networks.

Popular media has convinced us that YouTube video is sucking up all available bandwidth and bringing the Internet to its knees. Indeed, some service providers and particularly Cable broadband companies are struggling to cope with the surge in Internet activity. But a lot of that is because they oversubscribed their networks based on assumptions of limited infrequent traffic from Web surfers, not lengthy high bandwdith downloads of video clips, movies and television shows. Less well known is the dramatic growth in business traffic both on the Internet and off.

What's behind all this organizational activity? It's a combination of new types of information based businesses and productivity improvement initiatives by old-line businesses.

The new businesses offer digitally based services, such as video production and distribution, computer generated imaging, software outsourcing, and digital modeling and simulation.

How about traditional businesses? Office buildings full of clerks processing paper-based forms have been replaced by online systems for order entry, processing and shipment, inventory tracking, and e-commerce Web sites. More sophisticated tools help fewer people handle a larger volume of work without becoming swamped. Electronic communications have reduced cycle times of virtually every business process. Even mom and pop franchise operations have point of sale systems tied back to the franchisor for sales tracking and automatic inventory management. Plus every business, no matter how large or small, has its own Web site.

This transformation in business practice means that owners and managers of business properties have to consider electronic communications as a necessary utility, the same as electricity, heat and water. Today, it's very reasonable to make sure your building is "lit" for fiber optic service and even including high bandwidth connectivity as part of the lease. No longer are fiber optic bandwidth prices unreasonable. New Metro Ethernet services offer 100 Mbps and even Gigabit Ethernet at reasonable prices when shared among multiple tenants. Include some wireless access points to cover the floor space and you have an up to date facility that will appeal to even the most high-tech tenants.

What Real Estate Developers Need to Know About Ethernet

Broadband Internet access is becoming a utility, just like power, water, and telephone service. Access to the public Internet and corporate networks is now absolutely essential to doing business, and pretty much expected by home office users. Smart developers of office buildings, industrial parks and new subdivisions will include broadband Internet in their planning rather than let buyers and renters fend for themselves. It's not just another bullet point on the feature list. Broadband can be a big money maker and Ethernet is the technology to pursue.

Why Ethernet? It's for more than infrastructure wiring these days. Metro and Carrier Ethernet connections now offer the best value for the money in terms of dollars per Mbps bandwidth. In many cases these savings come from dealing directly with a competitive network service provider who provides the fiber optic connection.

How far you want to go with this depends on how heavily you want to be involved with the voice and data infrastructure and services. When building or rehabing an office building in a metropolitan area, a good option is a Fast Ethernet or Gigabit Ethernet service and the structured wiring, switches and outlets to distribute the service to individual offices. This also makes sense when developing a new office or industrial park. If fiber optic cables are pulled to each location, along with power and telephone lines, the cost is fairly incremental.

What service level should be provided? That's determined by how many clients you have and their bandwidth requirements. Most every business will want at least T1 level Internet service (1.5 Mbps). More sophisticated clients who need to transmit medical images, engineering drawings, or video can really benefit by Fast Ethernet at 100 Mbps. Some might actually be persuaded to choose your facilities over others if they can have easy and affordable access to Gigabit Ethernet service at 1,000 Mbps.

Another decision is whether to contract with the carrier yourself and become the service provider to your clients, or simply provide the physical infrastructure so that carriers can easily hook-up clients directly. To get a carrier interested, you might at least have to get commitments for a certain level of bandwidth from your tenants. If you buy bandwidth from an Ethernet carrier and then route it to interested clients, you can determine the monthly service pricing and perhaps turn a handsome profit as well as having satisfied customers.

Of course, all of this can be done with traditional T1 lines and DS3 service. But bringing in an Ethernet Wide Area Network connection can slash your costs by half or more if you can use 10, 100, or 1,000 Mbps of bandwidth for your facility. If you are planning or currently providing such services, then find out what carriers are nearby and what the service levels cost in your area.