FCC: Broadband Critical For Often Undervalued Small Business Market

WASHINGTON, January 4, 2010 – At a field hearing at the University of Chicago on December 21, 2009, the Federal Communications Commission voiced its commitment to provide broadband opportunities to small businesses – in spite of the feeling that small businesses are sometimes forgotten.

“When discussing the digital divide, small businesses are often overlooked,” said Norma Reyes, commissioner of the department of business affairs and consumer protection for the city of Chicago.

“ Small businesses are really the engine of job creation in the U.S., and they have been for a long time,” FCC Chairman Julius Genachowski explained at the hearing.

“The statistics are really amazing. Small businesses inject about a trillion into the American economy. Small businesses have created on a net basis, over 93% of new jobs over the past 15 years.”

Genachowski outlined the reasons why broadband is a key to the success of small businesses in America. He explained that broadband is essential as a platform for:

1. Economic Growth
2. Tackling national goals like education and public health
3. Civic engagement and improved government services in the 21st century.

“Broadband enables small businesses to reach new customers, new audiences,” said Genachowski, adding that increased broadband access offers businesses a way to reduce startup costs and increase revenue.

Small businesses made their voices heard on the topic, speaking on two panels.

They explained ways broadband would help them function better. Legal services, for instance, could much more quickly meet the needs of local clients if they can work and advertise effectively on the internet. This same principle could help the entertainment industry expand. By providing services remotely, companies in cities like Chicago could compete against companies in Hollywood or New York.

The factors that are currently limiting small businesses from obtaining broadband access are many, but they boil down to one thing: money. Small businesses simple can’t produce the money needed to pipe broadband into inconvenient locations, increase bandwidth speeds, or pay for internet much faster than their normal needs.

The solutions to these hurdles are not clear, but competitive pricing by service providers could be the first step.

“There’s a simple fix that’s almost without cost,” said James Geiger, CEO of Cbeyond, addressing chairman Genachowski. “Under your leadership, Mr. Chairman, we should require the Bell companies to sell at retail prices the bandwidth necessary for competitors … to provide next generation broadband applications to small business and thereby begin a new cycle of innovation benefiting small business.”