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 this week by the Wisconsin Legislature will help to close the gap between the state’s high-tech “haves” and its “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 century.
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 communities.
“Without broadband, we will never be able to fully exploit the intellectual capital and talent of our citizens. There cannot be significant innovation with broadband. This bill will put us on the path to more innovation,” Kanavas said.
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 Co-operation 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.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the WisconsinState Journal in Madison.