Increasing Broadband Access to Improve Competitiveness

Mr. Chairman, I want to thank you for calling this hearing and for the opportunity to present written testimony for the record.

Over the past several months I have held regional broadband summits in Southern Illinois in Carbondale and Central Illinois in Springfield.  My hope in organizing those events was to raise awareness of the importance of high speed internet access for health, education, and economic development outcomes.  If there was one message I heard loud and clear at these summits it’s that broadband access is not a luxury item but a necessity to compete in the 21st Century.  Quite simply, businesses, hospitals, schools, and even communities, regions, and states are better able to compete if they have access to or can offer broadband service.

The statistics in this area are compelling.  A 2006 report by the U.S. Department of Commerce shows that broadband access enhances the economic growth and performance of communities.  Over the three year study, broadband communities significantly outgrew non-broadband communities in terms of employment, the number of businesses overall, businesses in IT-intensive sectors, and property values.

In addition to aggregate data, various case studies comparing similar communities with and without broadband access confirm these results.  Recent studies comparing the communities of Cedar Falls and Waterloo, Iowa; and ten other similar counties in Florida, including Lake County, FL, attribute divergent economic development outcomes to differences in broadband access.  This makes sense.  The economic viability of communities is often directly related to public infrastructure. Good schools, adequate roads and transportation, access to affordable health care, and quality of life factors play a role in whether communities will attract new businesses and residents.  Like traditional utility services such as water, sewer, gas, and electricity, broadband is a key part of this infrastructure.

However, I am concerned that we are recognizing the strategic importance of this infrastructure too late and that the United States is falling behind in this key area.  In an increasingly competitive global economy, one of our key advantages is strong infrastructure.  In a recent report, the United Nations referred to broadband as a key factor in the competitiveness of businesses and a critical element in the growing divide between rich and poor nations.

I am concerned that the United States has fallen behind our peers in terms of our per capita access to high speed internet access.  According to the OECD, the United States fell from 4th in the world in broadband access per capita in 2001 to 12th in the world in 2006.  As of 2006, the International Telecommunications Union listed the U.S. 16th worldwide in terms of its broadband penetration rate, behind South Korea, Belgium, Israel, and Switzerland, among others.

In today’s highly competitive international markets, our children, businesses, and communities are competing with their peers around the world for jobs, market share, and business attraction.  It concerns me that with the size and dynamism of our economy we are falling behind in an area in which we should have a natural advantage.  Lagging behind in broadband means our children are less able to access the full set of tools and resources available online and communities are less able to attract businesses or high quality employees considering relocating.  Businesses located in areas without broadband are unable to take advantage of the online market and residents with narrow band connection speeds are less accessible as customers.    

In addition, I remain concerned that many of our residents living in rural areas do not have access to high speed internet service.  The digital divide remains a reality.  We all want to jump onto the Information Superhighway, yet there is no on-ramp in many parts of the country.  I hear about this frequently when I travel outside metropolitan areas in Illinois.

When you look at the statistics, rural broadband deployment continues to lag behind urban deployment, and the differential continues to grow, even as broadband usage has grown significantly in our nation.

According to a 2004 report issued by the U.S. Department of Commerce, only about 25% of rural households that use the Internet have broadband access, compared to over 40% of the same households in urban areas.  The USDA’s 2005 report found that farm households have home access to broadband at almost half the level of all U.S. households nationwide.  The Pew Internet and American Life Project found similar results in its 2006 report, that only 18% of rural adults reported a home broadband connection in the year 2005, compared to 31% of urban adults.

All these studies point to a consistent conclusion:  Americans living in urban areas are almost twice as likely to have home broadband access as do their rural counterparts.  And one of the main obstacles for rural broadband adoption is the availability and price of broadband service in these regions.

Clearly, we need to make broadband access a national priority and I’m afraid we haven’t done so yet.  In early 2004, President Bush called for universal and affordable access to broadband by the year 2007, because he saw it as a way to enhance our nation’s economic competitiveness and help improve education and health care for all Americans.  Unfortunately, that goal is not even close to being met.

The rhetoric hasn’t matched the Administration’s actions in this area.

At the FCC, there is no bureau dedicated to facilitating the build out of broadband networks and the Commission has done little in the order of studying the problem or issuing recommendations to expand access.  The President’s FY2008 Budget even proposes cutting a mandatory broadband assistance loan program by $203 million.  In comparison, the Australian Government recently announced a $1.1 billion investment in a broadband blueprint designed to build out Australia’s broadband infrastructure.

Many of our community and state leaders have decided to take matters into their own hands rather than waiting for Washington DC to act.  In Southern Illinois, a consortium of schools, universities, hospitals, economic development units, elected leaders, internet service providers, others have come together in recognition of the important fact that bringing broadband to Southern Illinois is important for economic development and quality of life.  They have collaborated to form an entity, Connect SI, tasked with mapping out resources, building demand, and working with providers to build out infrastructure.  This is the type of public-private partnership that can break through the significant proprietary concerns that providers have about sharing their network resources in order to build detailed maps important to build out.

Similarly, on a statewide basis in Kentucky, these types of partnerships have come together to form a public-private partnership called Connect Kentucky.  Since its formation in 2001, Connect Kentucky has brought state government, providers, technology companies, and economic development units together to build one of the most innovative organizations in the country.  Connect Kentucky has built incredibly detailed maps and spread throughout the state building demand through their eCommunity Leadership Teams.  Just last year, broadband access increased 28 percent in the state.  On a budget of only a couple million dollars per year, this organization has become a driving force of economic development and telehealth and education in the State of Kentucky.
These two models show me what’s possible for the future of broadband in this country.  Facilitating these entities with federal support is an essential step that will move us in the direction of more access to broadband, and better service for lower prices.  For these reasons, I am today announcing that I am introducing the Connect the Nation Act of 2007.   The legislation creates a matching grant program that will provide matching funds to statewide nonprofit entities to benchmark access, create detailed GIS maps, and facilitate demand through grassroots teams.  It builds on the successful lessons of Connect Kentucky and creates the incentives necessary for states around the country to develop strategic technology and connectivity plans that will make them more competitive.

I again thank the Chairman for holding this important hearing and for the opportunity to submit this testimony.