Madison – If you’re a business owner living in South Korea, Iceland, the
Netherlands, Japan or other developed nations, connecting to the Internet is fast
and efficient. While there may be other impediments to doing business in those
countries, e-commerce isn’t one of them.
That’s not the case if
you live or work in rural Wisconsin, where high-speed access to the Internet via
broadband connections is far from universal. Perhaps the passage of Senate Bill
483 last week by the Wisconsin Legislature will help to close the gap between
the state’s high-tech haves and have-nots.
The bill passed Tuesday
by the Senate and Assembly would create a pool of tax credits for Internet equipment
used to provide broadband service “in areas of the state that are not served”
by a broadband provider or served by only one provider.
About $7.5 million
in tax credits are available to Internet service providers, who must make about
$150 million in equipment investments in order to collect the full amount of the
franchise and corporate income-tax credits.
What is broadband? Generally
speaking, it refers to telecommunication in which a wide band of frequencies is
available to transmit information. If a wide band of frequencies is available,
information can be sent on many different frequencies or channels within the band
concurrently, allowing more information to be transmitted in a shorter amount
of time. A rough analogy is a highway: More lanes allow more cars to travel on
it at the same time.
Dial-up Internet access is still the norm in much of
rural Wisconsin, and it’s the equivalent of a two-lane road rather than an
information superhighway. Because so much of business today is conducted over
the Internet, companies that try to prosper in areas where broadband access isn’t
available find themselves at a competitive disadvantage.
The United States
ranks only 16th in the world in the broadband penetration, and Wisconsin is a
mediocre 25th among the 50 states. That’s not a strong showing for a state
that wants to become a leader in the “knowledge economy” of the 21st
Improving the state’s competitiveness
is why state Sen. Ted Kanavas, a Brookfield Republican who has owned two software
companies, has long pushed for enhanced broadband access in Wisconsin’s hard-to-reach
“Without broadband, we will never be able to fully exploit
the intellectual capital and talent of our citizens,” he said. “There
cannot be significant innovation with broadband. This bill will put us on the
path to more innovation.”
Kanavas is not alone. Federal Communications
Commission member Michael J. Copps, a Milwaukee native, was blunt in his assessment
for the need for broadband.
“The way I see it, those who get access
to high-speed broadband are going to win, and those (who) don’t are going
to lose,” Copps said during a recent telecom conference at Marquette University.
A recent study by the Organization for Economic Cooperation and Development
concluded that broadband penetration in the United States was less than 17 percent
of businesses and households in 2005. That equated to roughly 49.4 million subscribers.
In Wisconsin, the penetration is estimated at closer to 15 percent.
While cities such
as Madison and Milwaukee are making headway in implementing wireless broadband
systems, rural communities are much more likely to rely on telephone, cable or
satellite systems. Fiber optic systems are in place in many communities, but it’s
the “last mile” of access that is often the most expensive to connect.
The cost of laying fiber optic cable ranges from $35,500 to $56,500 per mile,
according to recent estimates. Then again, that’s cheap compared to the cost
of constructing a mile of roadway — about $887,000.
Wisconsin is undergoing
an economic revolution that has been spotty, depending in part on geography. The
state’s larger cities have generally plugged into the global economy, which
uses the Internet as a platform, and smaller communities generally have not. As
manufacturing and agriculture continue to evolve, and foreign trade becomes a
larger factor in Wisconsin’s economic success, rural Wisconsin will need
faster and more efficient Internet access.
The broadband bill passed by
the Legislature isn’t a panacea, but it’s an important step forward
in our increasingly wired world.
Tom Still is president of the Wisconsin