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‘Giganomics’ Looks to Tech Entrepreneurship in Kansas City as New Model for Economic Development

TINLEY PARK, ILLINOIS, November 8, 2013 – There is a new holy grail in economic development, and it isn’t land use, tax policy, or cheap energy costs. In a word, it’s Giganomics.

The term was coined by David Sandel, President of the Gigabit Communities and Smart Cities consultancy, at the Broadband Communities Economic Development Summit here on Thursday. Giganomics refers to the process of using Gigabit Networks, or super-fast fiber-optic broadband connections, as the prime tool for entrepreneur-led economic development.

David Sandel, President of Gigabit Communities and Smart Cities, Sandel and Associates, leads a discussion at the Broadband Communities Economic Development Summit. To the right is Steve Fennel, Director of telecom outreach at the University of Kansas Medical Center, and Rick Usher, Assistant City Manager for Kansas City, Missouri.

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TINLEY PARK, ILLINOIS, November 8, 2013 – There is a new holy grail in economic development, and it isn’t land use, tax policy, or cheap energy costs. In a word, it’s Giganomics.

The term was coined by David Sandel, President of the Gigabit Communities and Smart Cities consultancy, at the Broadband Communities Economic Development Summit here on Thursday. Giganomics refers to the process of using Gigabit Networks, or super-fast fiber-optic broadband connections, as the prime tool for entrepreneur-led economic development.

David Sandel, President of Gigabit Communities and Smart Cities, Sandel and Associates, leads a discussion at the Broadband Communities Economic Development Summit. To the right is Steve Fennel, Director of telecom outreach at the University of Kansas Medical Center, and Rick Usher, Assistant City Manager for Kansas City, Missouri.

The chief exhibit for Giganomics is Kansas City, selected by internet search giant Google for its first Gigabit Network. Judging by the enthusiasm and energy voiced on a panel of Kansas City experts assembled here by Sandel, Giganomics is working.

In addition to the rapid pace in the direct construction of Google’s fiber network, tens of thousands of new jobs in Kansas City can be attributed to the new Gigabit Network, panelists said.

Equally important are hundreds of techies relocating to Kansas City, bringing a vitality and energy to the city that hasn’t been seen in decades. They’re starting business and getting funded to do so.

“Over the last 30 years, Kansas City has been a [jobs] exporter to the coasts, to Chicago, and to Denver,” said Mike Burke, co-chair of the Mayor’s Bi-state Innovation Team, which got Kansas City, Missouri, and Kansas City, Kansas to cooperate on economic development. “We are seeing those young people coming back.

“It is good for the future of Kansas City,” he said. “We are in a worldwide competition for cities to grow, nurture, keep and steal talent in the next decade.”

By the end of the year, Google Fiber’s Gigabit Network in the two Kansas Cities is poised to pass 160,000 homes, said Rick Usher, Assistant City Manager for Kansas City, Missouri. Usher showed slides demonstrating the rapid pace of Google’s structure. All told, 1,000 employees, three contractors, and 50 subcontractors from 17 states are working on the fiber build, he said.

In addition to its announced plans to build a Gigabit Network in Austin, Texas; and its purchase of the iProvo fiber network in Provo, Utah; Google has committed to building its fiber network in 19 cities in the Kansas City metropolitan area. That’s about half of the 2 million homes in the region, said Sandel.

One of the most innovative aspects of Google’s Gigabit Network is the creation of the concept of a “fiberhood” — a distinct geographical area poised to receive the super-fast connectivity. Dividing the 19 cities in the Kansas City region up into “fiberhoods” has enabled a healthy competition among neighborhoods for pre-commitments to purchase Google’s service.

Now, in the neighborhoods to get a Gigabit, there are also “fiberhouses,” or homes for hackers. The vibrant tech community has breathed civic life into the city and has become “a talent attractor and retainer,” said Usher. “Young people that don’t have ties to their communities are jumping on a plane to Kansas City and living in a fiberhouse.”

Burke, an attorney whose career has been focused on real estate development, said that dizzying pace of the last 18 months prompted a light bulb in him to go off. He said that in an era of Giganomics, the old economic development tools don’t work.

“Tax breaks, tax abatements, tax-increment financing: they don’t work for startups,” he said. “We had to invent the tools for startups,” which he said were:

  • Finding free and reduced cost office space
  • Access to venture capital funding
  • Health care, and
  • Data storage.

Finding access to creative venture capital and other means of funding startup activities is a crucial new tool, agreed Aaron Deacon, Managing Director of KC Digital Drive, a community-driven effort to leverage the Gigabit Network for economic developments.

Deacon said that the group’s four top priorities were:

  • Expanding economic opportunities
  • Digital inclusion and digital literacy
  • Next-generation application development
  • Interacting with the leadership of other Gigabit cities.

Deacon cited the cities’ “Digital Sandbox,” a proof of concept incubator which had played a role in birthing 27 companies — with 15 more on top for the next six months. The sandbox received $1 million in funding from the U.S. Department of Commerce, he said.

 

Aaron Deacon of KC Digital Drive, and Mike Burke, of the Kansas City Mayors’ Bi-State Innovation Team, at the Broadband Communities Economic Development Summit

He also said that an effort in providing low-cost office space, a separate group called KC Startup Village had provided office space for about 30 startup businesses.

In attempt to quantify what this kind of entrepreneurial activity has on economic development, Deacon speculated, “You have a couple hundred people working in these, some of which have moved to Kansas City [to start their businesses.]

“Some of them will be successful, some will not,” he said. Among those that fail, he said, “some will stay, and go to work for other companies. It is hard to measure the impact of those 200 people” — but Deacon believes that it is substantial.

Additionally, Deacon cited recent investments in new startups: $6 million in mobile search application Leap 2, and $500,000 in Hoopla.io, an event marketing and syndication platform.

Also on the economic development front, Burke cited health care software company’s Cerner Enterprises’ decision to purchase 237 acres to build a new campus that would employ up to 15,000 people in Kansas City.

In fitting with the “Giganomics” theme of the panel, this more conventional jobs announcement was, in this discussion, almost greeted as an afterthought.

Drew Clark, Publisher of BroadbandBreakfast.com, tracks the development of Gigabit Networks, broadband usage, the universal service fund, and wireless spectrum policy, at http://twitter.com/broadbandcensus. Nationally recognized for his knowledge on telecommunications law and policy, Clark brings experts and practitioners together to advance the benefits provided by broadband: job creation, telemedicine, online learning, public safety, the smart grid, eGovernment, and family connectedness. Clark is also available on Google+ and Twitter.

Digital Inclusion

Doug Lodder: How to Prevent the Economic Climate from Worsening the Digital Divide

There are government programs created to shrink the digital divide, but not many Americans know what’s out there.

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The author of this Expert Opinion is Doug Lodder, president of TruConnect

From gas to groceries to rent, prices are rocketing faster than they have in decades. This leaves many American families without the means to pay for essentials, including cellphone and internet services. In fact, the Center on Poverty and Social Policy reports that poverty rates have been steadily climbing since March. We’re talking about millions of people at risk of being left behind in the gulf between those who have access to connectivity and those who don’t.

We must not allow this digital divide to grow in the wake of the current economic climate. There is so much more at stake here than simply access to the internet or owning a smartphone.

What’s at stake if the digital divide worsens

Our reliance on connectivity has been growing steadily for years, and the pandemic only accelerated our dependence. Having a cell phone or internet access are no longer luxuries, they are vital necessities.

When a low-income American doesn’t have access to connectivity, they are put at an even greater disadvantage. They are limited in their ability to seek and apply for a job, they don’t have the option of convenient and cost-effective telehealth, opportunities for education shrink, and accessing social programs becomes more difficult. I haven’t even mentioned the social benefits that connectivity gives us humans—it’s natural to want to call our friends and families, and for many, necessary to share news or updates. The loss or absence of connectivity can easily create a snowball effect, compounding challenges for low-income Americans.

The stakes are certainly high. Thankfully, there are government programs created to shrink the digital divide. The challenge is that not many Americans know what’s out there.

What can be done to improve it

In the 1980s, the Reagan administration created the federal Lifeline program to subsidize phones and bring them into every household. The program has since evolved to include mobile and broadband services.

More than 34 million low-income Americans are eligible for subsidized cell phones and internet access through the Lifeline program. Unfortunately, only 1 in 5 eligible people are taking advantage of the program because most qualified Americans don’t even know the program exists.

The situation is similar with the FCC’s Affordable Connectivity Program, another federal government program aimed at bringing connectivity to low-income Americans. Through ACP, qualifying households can get connected by answering a few simple questions and submitting eligibility documents.

Experts estimate that 48 million households—or nearly 40% of households in the country—qualify for the ACP. But, just like Lifeline, too few Americans are taking advantage of the program.

So, what can be done to increase the use of these programs and close the digital divide?

Our vision of true digital equity is where every American is connected through a diverse network of solutions. This means we can’t rely solely on fixed terrestrial. According to research from Pew, 27% of people earning less than $30,000 a year did not have home broadband and relied on smartphones for connectivity. Another benefit of mobile connectivity—more Americans have access to it. FCC data shows that 99.9% of Americans live in an LTE coverage area, whereas only 94% of the country has access to fixed terrestrial broadband where they live.

Additionally, we need more local communities to get behind these programs and proactively market them. We should see ads plastered across billboards and buses in the most impacted areas. Companies like ours, which provide services subsidized through Lifeline and ACP, market and promote the programs, but we’re limited in our reach. It’s imperative that local communities and their governments invest more resources to promote Lifeline, ACP and other connectivity programs.

While there’s no panacea for the problem at hand, it is imperative that we all do our part, especially as the economic climate threatens to grow the digital divide. The fate of millions of Americans is at stake.

Doug Lodder in President of TruConnect, a mobile provider that offers eligible consumers unlimited talk, text, and data, a free Android smartphone, free shipping, and access to over 10 million Wi-Fi hotspots; free international calling to Mexico, Canada, South Korea, China and Vietnam; plus an option to purchase tablets at $10.01. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband's Impact

Senate Bill Subsidizing U.S. Semiconductor Production Clears House, Going to White House

Bill aims to strengthen American self-reliance in semiconductor chip production and international competition.

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Photo of Sen. John Hickenlooper, D-Colorado, during Tuesday's press conference

WASHINGTON, July 29, 2022 – A $54 billion bill to subsidize U.S-made semiconductor chips passed the House Thursday on a 243-187, and moves to President Biden for his expected signature.

Dubbed the CHIPS Act for Creating Helpful Incentives to Produce Semiconductors Act for America Fund, the measure is expected to incentivize domestic semiconductor manufacturing and also provide grants for the design and deploying of wireless 5G networks. It also includes a $24 billion fund to create a 25 percent tax credit for new semiconductor manufacturing facilities.

Advocates of the measure say that it will also improve U.S. supply chain, grow U.S. domestic workforce, and enable the U.S. to compete internationally to combat national security emergencies.

The measure passed the Senate Wednesday on a 64-33 vote.

Congressional supporters tout benefits

House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., voiced his support on the House floor, calling it “a win for our global competitiveness.”

The CHIPS Act of 2022 provides a five-year investment in public research and development, and establishes new technology hubs across the country.

Of the funds, $14 billion goes to upgrade national labs, and $9 billion goes to the National Institute of Standards and Technology research, of which $2 billion goes to support manufacturing partnerships, and with $200 million going to train the domestic workforce.

In a virtual press conference on Tuesday, Colorado Democratic Sen. Michael Bennett said that America’s semiconductor industry has lost ground to foreign competitors. “Today, only 12% of chips are manufactured in the United States, down from 37% in the 1990s.”

He said relying on cheaper products produced in China and overseas for so long, it has caught up with the United States.

Bennet suggested to move manufacturing labs to Colorado, where it can support it due to the plenty of jobs in aerospace and facility and infrastructure space.

“We don’t want the Chinese setting the standard for telecommunications. America needs to lead that. This bill puts us in the position to be a world leader,” said Bennet. “We are at a huge national security disadvantage if we don’t do this.”

Sen. John Hickenlooper, D-Colorado, joined his Rocky Mountain state colleague in support: “There is a real sense of urgency here to compete not only to re-establish the U.S. to make their own chips, but to compete internationally.”

He said that semiconductor chips are vital to almost every business and product, including phones, watches, refrigerators, cars, and laptops. “I’m not sure if I can think of a business that isn’t dependent on chips at this point.”\

“This is a space race,” he said. “We cannot afford to fall behind.”

Industry supporters say measure is necessary

The U.S. has lost ground to foreign competitors in scientific R&D and in supply chain industry during a recent semiconductor crisis, said France Córdova, president of the Science Philanthropy Alliance, at a U.S. Chamber of Commerce Foundation event on July 19. The U.S. only ranks sixth best among other prominent countries in the world for research and development, she said.

“The CHIPS Act of 2022 and FABS Act are critical investments to even the global playing field for U.S. companies, and strategically important for our economic and national national security,” said Ganesh Moorthy, president and CEO of Microchip Technology Inc.

Bide expected to sign measure

With the Biden’s Administration’s focus to tackle the semiconductor shortage and supply chain crisis through the Executive Order made in February, the Biden administration has been bullish on the passage of the CHIPS Act, in a Wednesday statement:

“It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers.  It also will create jobs – good-paying jobs right here in the United States.  It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” said Biden.

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Health

Providers Call for More FCC Telehealth Funding as Demand Grows

‘I think obtaining funding from the Universal Service Fund would go a long way.’

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Photo of FCC Chairwoman Jessica Rosenworcel

WASHINGTON, July 26, 2022 – Health care providers in parts of America say they are struggling to deliver telehealth due to a lack of broadband connectivity in underserved communities, and recommended there be more funding from the Federal Communications Commission.

While the FCC has a $200-million COVID-19 Telehealth program, which emerged from the Coronavirus Aid, Relief and Economic Security (CARES) Act, some providers say more money is needed as demand for telehealth services increases.

“The need for broadband connectivity in underserved communities exceeds current availability,” said Jennifer Stoll from the Oregon Community Health Information Network.

The OCHIN was one of the largest recipients of the FCC’s Rural Health Care Pilot program in 2009. Stoll advocated for the need for more funding with the non-profit SHLB Coalition during the event last week. Panelists didn’t specify how much more funding is needed.

Stoll noted that moving forward, states need sustainable funding in this sector. “I am hoping Congress will be mindful of telehealth,” said Stoll.

“The need for telehealth and other virtual modalities will continue to grow in rural and underserved communities,” she added.

Brian Scarpelli, senior global policy counsel at ACT, the App Association, echoed the call for FCC funding from the Universal Service Fund, which subsidizes basic telecommunications services to rural areas and low-income Americans. “I think obtaining funding from the Universal Service Fund would go a long way.”

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