Small businesses need broadband to succeed in today’s economy, according to the National Telecommunications and Information Administration (NTIA).
Lawrence E. Strickling, Assistant Secretary for Communications and Information at the U.S. Department of Commerce and head of the NTIA, testified before the U.S. House of Representative’s Committee on Small Business in July highlighting that broadband access and adoption has the potential to increase small business creation and expansion in the United States.
“A key element of building the innovation economy of the future – one that supports new and better jobs, and enhances America’s global competitiveness – is expanding the availability and adoption of broadband access in America,” said Strickling during the summer hearing. “In the near-term, investments in broadband infrastructure help create jobs and business growth by supporting the installation and upgrade of fiber-optic networks, wireless towers, and other high-tech components.”
A November 2010 report by the U.S. Small Business Administration found that the Internet plays an integral role in helping small businesses achieve their strategic goals, improve competitiveness and efficiency, and interact with customers and vendors. Respondents to this survey generally agreed that high-speed Internet access is “as essential to my business as other services such as water, sewer, or electricity.”
A more recent report from Connected Nation also shows that broadband connectivity is an increasingly essential component for business growth, citing that more than four million U.S. firms have websites and that broadband-connected businesses report annual median sales revenues approximately $300,000 higher than revenues for businesses without broadband.
“This data reveals that broadband has become vital for small businesses in the U.S. to grow and compete in the 21st century,” added Strickling.
Since 2009, through the Broadband Technology Opportunities Program (BTOP), the NTIA has invested almost $4 billion in projects to expand broadband access and adoption in the United States. A key component to these investments is what is deemed the middle-mile, the fundamental link between the national Internet backbone and the local broadband connections to homes, businesses, schools, hospitals, and other areas deemed as community anchor institutions.
Many believe that these investments in the middle-mile is “priming the pump” for additional economic activity.
Strickling explained that investments in the middle-mile have the potential to catalyze millions of dollars in additional private-sector investment as local broadband providers utilize the new infrastructure to expand or enhance their own Internet service for households and businesses. In particular, he added, the open access and interconnection requirements included in BTOP are encouraging last-mile and incumbent broadband providers to tap into grant-supported middle-mile networks to expand broadband services and speeds for American consumers.
According to the NTIA’s most recent data available, all 230 BTOP recipients nationwide have spent approximately $2 billion in federal funds, nearly $700 million in non-federal matching funds, and have entered into nearly 400 interconnection agreements with third-party providers to leverage or interconnect with their networks.
The number of those agreements is expected to increase in 2013.