Small Business Has a Big Stake in Broadband Internet Access; America Has a Big Stake in Small Business

Posted May 26, 2009 at 9:12am

Last week was National Small Business Week in America, but you’re excused if you didn’t know.The annual celebration doesn’t garner much attention, and that’s truer than ever this year.Public attention seems to be focused on big businesses, “too big to fail— businesses that the federal government is spending trillions to bail out or prop up. If history is any guide, though, small business will be the sector that will lead the U.S. out of its economic doldrums. It’s imperative that public policy focus on ways to channel capital and resources into the hands of entrepreneurs. Likewise, investment needs to continue to flow in industries that tool innovation, job creation and efficiency in this sector. No service has become more important than affordable, high-speed Internet. Access to high-speed Internet at progressively faster speeds and lower costs has helped make America’s job engine more competitive and productive. Entrepreneurs have greatly benefited from the billions of dollars in investments that broadband providers — chiefly cable TV and phone companies — have made in the speed, efficiency and sophistication of their networks. This investment has continued despite the dismal state of the economy. It is a bright spot that policymakers need to continue to foster as the payback for our economy, and our key small-business players, is immediate and extraordinary.In this regard, the government needs to preserve what is working — the free and competitive market for broadband services. The current environment is serving small businesses well.It wasn’t that long ago when a “T-1 line— was the ultimate in broadband connection for a small-business owner. A T-1 carried data at the rate of 1.5 megabits per second. To get one you had to lease a private line from the phone company, which could cost several thousand dollars per month.Today, of course, 1.5 megabits isn’t even considered a particularly fast broadband Internet speed. Any small business or residence can get five times that much capacity for well under $100 a month. And across the country small businesses have a lineup of broadband providers competing to make them the best offer.President Barack Obama’s $787 billion stimulus package includes $7.2 billion for direct investment in broadband capacity for underserved areas. The funds represent an extraordinary opportunity to extend and expand broadband service to underserved and unserved Americans — many of which are small-business owners or individuals wishing to pursue economic opportunity through entrepreneurship.Access to broadband not only gives business owners innovative tools that help lower costs and improve efficiency, it provides access to new markets and consumers. Such access to money-saving tools and markets helps lower the barrier to entrepreneurship while improving chances for success. Individuals can also start and run businesses regardless of their location. For many individuals that have been hit hard by the rough economy in their state or area (and who can’t simply pick up and move at the drop of a hat), broadband access provides an opportunity to pursue business ownership as an option.The stimulus program, however, cannot get sidetracked or undermined by unnecessary red tape or regulatory restrictions. The currently “light— federal regulatory framework has enabled continued investment in broadband and broadband technologies, and this same approach needs to occur in executing stimulus funding projects. Placing “strings— or eligibility requirements on providers would only hurt those that the program is designed to help. The government also needs to avoid interfering with the flow of private broadband investment. Particularly given the current state of the economy, I can’t think of anything more discouraging to investment than government interference with the freedom of broadband network operators to manage their own networks. The freedom, flexibility and skills of network operators have helped provide small businesses with sophisticated online services that were once the exclusive province of giant corporations.All broadband Internet traffic on a network is not the same. Different types of traffic require different speeds and different levels of technical support from the network provider. Very few businesses, large or small, will keep investing in its own equipment if the use of that equipment is tightly controlled by a government regulator.Investment in broadband Internet technology by the communications industry is central to the growth and survival of the small business and entrepreneurial sector. Let’s keep that investment flowing.Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council, a nonprofit research and advocacy group dedicated to protecting small business and promoting entrepreneurship.