Exploring the impact of broadband and technology on our lives, our businesses, and our communities.

Broadband use soars in the United States

There are still plenty of community leaders and elected officials who are not taking broadband seriously. Bluntly put, it's a critical economic development issue. Ignore it at your peril.

This article that summarizes recent growth in broadband use in the U.S. is a must read for economic developers. If your community is behind in broadband use compared to the general population, you have a serious problem that demands immediate and continuous attention.

  • On the national level, the news is excellent--nearly 75% of the country is now using the Internet. How does your community compare?
  • Half of those Internet users now have broadband access, or about 35% of the entire U.S. population. Again, how does your community compare?
  • Even more significant is the month to month growth in broadband--this data is from February 2004, and growth is estimated at 2% a month, meaning that as we read this, broadband use in homes may already be as high as 50% of the population.
  • In the business sector, nearly 77% of U.S. workers have broadband in the workplace. Can you say that for the small businesses in your community? Do you still have leaders who don't think its an economic development issue? How will your local businesses (without affordable broadband) compete with businesses that do?
  • Finally, more women are online than men in key demographic sectors. Guess who does most consumer buying in the U.S.? Again, how does your community compare?

Wondering how to get your community leaders more interested? How about taking one out to lunch next week and reviewing this data with them?

Web tales

I'm always amazed at how badly some Web sites perform. Here are two examples I found yesterday.

I visited the site of a national architecture/design firm that is well known. I could overlook the annoying Flash animation on the home page that made it virtually impossible to read anything (a product of the MTV generation, undoubtly, who believe that any image that remains on a screen for than ten seconds is "old fashioned"). But within two clicks, I found myself on a page that informed me that I was using an "antique" browser and that I needed to immediately upgrade to Explorer 6.0. Yes, the one that CERT, the national Internet security folks have said is a serious hazard that should not be used. It is supremely arrogant for a company to ridicule potential customers by telling them they have "antique" browsers (I was using the latest version of FireFox, which was released about three weeks ago--hardly "antique"). It costs almost nothing to design a Web site that works well on a variety of browsers. It is intellectually lazy not to do so, and from a business perspective, just plain foolish.

But wait--it gets better. This national firm also has a Web design division. When I clicked on that link, I was taken to the home page of one of these firms that buys up domain names and sits on them. Huh? You want me to hire you to do Web design but your own Web site link doesn't work? I'll pass on that.

We're moving a few blocks away next month, and I decided to see if I could DSL from Verizon. Verizon has finally adopted the strategy of most of the other phone companies, which is to price DSL at $30 to compete with the cable companies' Internet service, which tends to run $10-$15 more. I quickly got to a page that told me to enter my area code and phone number, and in a "few moments" it would tell me if I could get DSL service. I waited a "few moments," staring at a little blinking animation that was supposed to tell me something was happening. I gave up and went on to other work, but left the browser window open. About an hour later, I checked back....still blinking, still no indication of whether or not I could get DSL at the new house. Hmmm...think I'll stick with cable modem service a while longer.

How do your community, local government, and economic development Web sites rate? Do they work properly? Do they expect visitors to have a specific browser? Was the design last updated in 1998? Would you still be using paper brochures and documents that were last updated five or six years ago? If no, why are you doing so on your Web site? Who is delegated to check your Web site regularly to make sure that it still works? While doing some work for a client recently, I found that a little piece of software that had been installed to animate some pictures no longer worked on most browsers, and left an image on every subsequent page of the site, right in the middle of text and other images. No one at the company had ever checked recent browser versions against the site. It turned out the code was six years old, and was badly out of date.

On the Web, you get what you pay for. If you don't spend any time or money keeping your site fresh and up to date, you are not going to get the visitors or results you expect.

Technology News:

The iPod goes to school

In a widely reported story, Apple's iPod will be given to all Duke University freshman this fall.

The handheld computers will be loaded with course materials, lecture notes, and other university-related materials. While at Virginia Tech, I was involved with freshman orientation (providing information on university computers and networks), and I can tell you the incoming students get an enormous stack of paper, most of which is probably never read.

Someone probably did the math on the cost of duplicating what is certainly hundreds of thousands of pages of materials and the related cost of shipping, storing, organizing, collating, and distributing it. My guess is it came within a few bucks of buying iPods in bulk and putting all that stuff on them (it would take about 15 seconds over Firewire to load them).

One of the neat uses for an iPod in a university environment would be to provide audio tours for new students--how to use the library, how to find the dining hall, how to add and drop classes.....all sorts of stuff that students could quickly dial up and listen to.

My guess also is that they are shifting the cost of printing course materials to the students as well. Instead of printing class notes and lecture materials, they are preloading the files on the iPod, and students choose to print them, or not. It could be that Duke discovered they were actually saving money by giving out the handheld computers.

Of course, they also store and play music, which virtually guarantees that students will use them. It's a brilliant and innovative concept.

Broadband everywhere?

We just rented a beach house for a week, and the contract had a list of amenities. To my surprise, broadband Internet access, a computer, and WiFi comes with what is a very moderately priced beach rental.

It's one more signal that your region, to be competitive in the global economy, needs to be working with your local hospitality, recreation, and travel businesses to make sure they understand this is what travelers want and expect.

If your local businesspeople are saying they don't understand it or don't think it's worth it, then you have an education and training challenge to help them identify what they need and why they need it (they need to keep customers coming). And your region needs hotels, motels, restaurants, and recreation spots to have these services. It's no longer some esoteric marketing strategy....it's become part of the base services package, like electricity, water, and sewer.

Customer service in the Knowledge Economy

We hear continually about the "problems" of the airlines. I had a few problems with an airline myself yesterday as thunderstorms buffeted the East Coast and snarled up traffic.

I was trying to leave Manchester, Vermont and get back to Roanoke, Virginia. Under normal conditions, the two leg journey (through Dulles in D.C.) takes just four hours. Yesterday, it took ten hours, mostly for no good reason.

Knowing the weather was causing problems, I showed up at the Manchester airport about four hours before my scheduled flight. At the ticket counter, United refused to book me on an earlier flight unless I paid $100 extra. I persisted, and I was told I could try standby for no extra fee, so I opted for that. I went through security and went up to the gate where the earlier flight was leaving, and discovered that the noon flight to Dulles was just getting loaded (four hours late...a bad sign).

I tried getting on, but the gate attendants refused to talk to several of us on later flights that wanted to get out. Talking among ourselves, we decided it was a lost cause, and a couple businesspeople left to go get some dinner. I lingered at the counter for another minute, and a different gate attendant walked up and asked if anyone else needed to go to D.C. I stepped up, and she said, "Oh, you need to go on this flight, because your flight is canceled." Huh? I'd been at this gate for nearly an hour, and no announcement had been made. When did they plan to tell me? She changed my ticket and put me on the plane, which had at least a dozen empty seats. They held the plane a bit longer, and filled all the seats. So far, so good, I figured...I'd get home tonight.

When I got to Dulles, I tried to repeat that. I went to the gate where an earlier Roanoke flight (late) was leaving. They had just started boarding, and I counted only about fifteen people getting on a fifty seat regional jet. Several of us tried to get rebooked on the flight, but the gate attendants ignored us. Finally the flight left, and I was able to get one of them to direct me to the gate where my flight was leaving.

I had to walk a very long way and take not one but two shuttle buses to get there--about twenty minutes. When I arrived at the commuter terminal, I tried to check in, and was told that my flight was canceled. The attendant said I could take two USAir flights (through Pittsburgh) to get home, but she could not make the changes. I would have to go to customer service in the main terminal. I rushed back to the main terminal, only to find that at least 150 people were in line for the customer service desk, and it did not appear to be moving at all--only three people were working there.

In desperation, I went to a nearby gate and asked a gate attendant to help, who informed me it was too late to get switched to the USAir flights, and she gave me a reduced rate hotel pass for the night. You have to call a number to book a room, and the service rep there laughed hysterically when I said I was in D.C. They had given out all their reduced rate rooms hours ago. I called around to some local hotels, but everything within twenty miles was booked; it was going to be a $60 cab ride each way to get to a hotel that had a room.

I then checked with a cop in the terminal, who told me it would likely take at least two and a half hours to get through security in the morning; I'd have to get up about 4:30 AM to make my 8:30 flight. I rented a car and drove the four hours back to the Roanoke Airport to get my own car, and got home about 1 AM.

The customer service at United was apallingly bad, and for no good reason. There was an utter failure, with their fully automated scheduling system, to provide passengers with timely information. I believe it is deliberate, so that passengers don't try to make alternate arrangements; I've seen it happen too many times to believe it is just accidental or unintentional.

United and the other major airlines have preposterous rules about changing flights. If you ask them why it costs $100 to change a flight, you get a lot of mumbo jumbo about how it messes up their system. Um, we're talking about a few bits, literally, of data. If the system is designed right, it should take about fifteen seconds to move a customer from one flight to another. Southwest Airlines, one of the few profitable airlines, has a very simple policy--once you have a ticket, you can go on any flight to your destination, and it takes just a few seconds to make the change.

So it can be done, and done without great cost. Finally, my experience at Dulles was absurd. They had a plane going to Roanoke half empty, and customers who they were going to have haul there the next day if they did not get out that evening. Why on earth, with the flight already very late, did they not load as many people as possible on that flight and get them out of their hair?

In my opinion, the airlines have, in part, a serious IT problem. They've been saddled with ridiculously complex management systems that satisfy corporate beancounters but make life terribly difficult for their own employees, and worse, alienate their customers. The airlines are proof-positive that information technology does not automatically fix your problems; in fact, it can make them much, much worse.

I've said it before--too many IT folks like complex systems because it increases IT budgets, justifies large staff expenditures, and gives them de facto control of the organization. It's just plain wrong, and wastes a lot of time and money (and some businesses go bankrupt).

Technology News:

New Hampshire wants to tax email and chat

State officials in New Hampshire have announced that they have "discovered" that chat, email, and other Internet services are "two way communication" and have decided that those services fall under the umbrella of a statute written in the early nineties (before the rise of the Internet) that taxes telelphone services.

New Hampshire, like many states, is facing budget shortfalls, so it is understandable they are looking for ways to increase revenues. But given the reliance of the Knowledge Economy on the Internet, it would be hard to find a tax that would do more to discourage the formation of businesses or the the growth of existing businesses. The size of the tax (7%) is especially daunting. Judging from the news coverage of the issue, it's a tempest in a teapot. It would appear that state legislators are not likely to let the bureacrats move forward with this.

A side issue, but an important one, is the fact that outside of perhaps AOL, I don't know of any service providers that are set up to monitor those "communications" uses. Technically, it is easy enough to do, but it would require additional equipment and billing software, and the cost of billing individually for email and chat (so that you could determine how much tax to pay) would be a nightmare. Most providers would probably opt for simply charging a flat monthly fee for email and chat, which is still more than they are doing now.

So the cost of accessing the Internet in New Hampshire would increase directly because of higher provider costs, and you would have the 7% tax on top of that. Not a recipe to compete in the global Knowledge Economy.

Technology News:

Dialup vs. broadband

I would venture to guess that the majority of my readers have broadband access, either at the office, or at home, or both. If you are someone that has to use both, you know what the differences are--for those that have broadband at the office and at home, it is easy to forget how slow dialup really is.

When I travel, I often have to use dialup from a hotel, which usually means slow dialup--28k is not unusual. It is sobering to remind ourselves that a majority of U.S. Internet users are still on dialup (about 70%), as opposed to places like Singapore and South Korea, where virtually every home and business has broadband, often over fiber.

The advantage these other countries have is much higher population densities; broadband service providers can more easily make a business case for universal broadband service. Here in the U.S., the wide open spaces and the great quality of life it affords many of us also puts rural communities at a disadvantage when it comes to services.

This is an old story, dating back to the early part of the 20th century, when electricity, then telephone service became an issue exactly the way Internet access is now. Community-based solutions like coops were the answer then, and commmunity-based solutions are, I think, still better than waiting for a commercial company to be able to make a business case. And yes, one community-based solution is to help make the business case for commercial providers by supporting community network projects. A focus on rich local content and services (not dependent on broadband, but easily supplied over dialup lines) helps create a marketplace of buyers for Internet services.

Those buyers will attract private sector sellers of services, and we get the broadband we need to compete in the global Knowledge Economy.

Technology News:

Roanoke Airport ahead of Atlanta, Charlotte

The Roanoke airport deserves kudos for providing free WiFi access while bigger airports like Atlanta and Charlotte still don't offer this service. Like it or not, WiFi in public places is fast becoming just another amenity, like rest rooms, water fountains, and sidewalks.

Why don't airports like Atlanta and Charlotte have it yet? Probably because they are trying to figure out how to make a buck from it, and have doubtless been reviewing dozens of proposals offering to install the equipment for free in return for an exclusive (and extortionate) franchise. I've written before about the absurd day rates for WiFi, which average $10/day. Frequent travelers, who might be on the road ten days a month or more, are apparently expected to pay hundreds of dollars a month just to get fifteen or twenty minutes access per day.

The companies providing this access market it as "24 hours" of service, knowing full well no one is ever able to do that. I'll be in the Philadelphia airport today for about an hour--why would I pay for 24 hours of access.

Fee-based WiFi is not likely to grow rapidly until the WiFi companies agree to allow roaming. At that point, hundreds of thousands of existing WiFi users will happily pay $30-40/month for nationwide roaming service. In the meantime, most of us will skip the silly rates and look for futures-oriented places like the Roanoke Airport.

Technology News:

Budget Suites is opening a space hotel

The owner of Budget Suites of America, Bob Bigleow, has had a secret operation at work for the past several years in Nevada, building a space hotel. Not surprisingly, one of his closest associates is Burt Rutan, owner and designer of SpaceShipOne, which flew into space just a couple of weeks ago.

Bigelow and Rutan together are creating synergy. Rutan's spaceships will attract a lot more paying customers if he has somewhere to take them, and Bigelow's space hotel needs an inexpensive (i.e. non-government controlled) spaceship to get folks to and from orbit.

Sound crazy? No, it's the global Knowledge Economy at work. The article is long, but well worth reading to the end, where Bigelow describes how he has cut costs ($200 million versus the $50 billion Nasa has spent) by shopping globally. Bigelow cited one example of a subsystem he needed; an American aerospace company wanted $100 million to design and build it. Instead, he bought it in Europe for $1.3 million.

Like it or not, we're at the dawn of a new age. No, it's not the Information Age; that was over 2 years ago. In the Knowledge Economy, as Bigelow is demonstrating, who you know is more important than what you know. Bigelow has been able to reach out globally, forge business relationships with firms in other countries, and design and build better and faster than NASA. NASA is stuck trying to make "old" relationships work; the government agency has had numerous failures and despite all the money it has spent, has not been able to advance its program.

What about your region? Are you still stuck trying to make "old," Manufacturing Economy relationships work? Are you helping your existing businesses learn to shop globally for the parts, products, and services they need to be competitive in a world market? Are you throwing away the rulebook and starting with a fresh sheet of paper to create your economic development strategy?

A rural advantage for high tech businesses

An article in today's Wall Street Journal (B1) details the success of Hutchinson Technology, a company with four plants in southern Minnesota. Hutchinson manufactures most of the world's supply of the support arms used to hold the read/write head in hard drives. Most of its output is exported to Asia, where most hard drives are manufactured now.

Hutchinson relishes its remote location in rural Minnesota, and uses it as a competitive advantage. Hutchinson's products are highly sophisticated, and the company's leaders have considered moving some parts of the business closer to customers, but recognized it would also mean exporting their manufacturing processes and techniques. Their view is that they do not want to train workers in other countries on how they manufacture their products, as those workers could then quit and take that knowledge to other companies. Locating the business in rural Minnesota makes it much more difficult for brain drain and technology leaks to occur.

Technology News:


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