Small businesses lose out on broadband

If you work in a large business, you probably already have a high-speed Internet connection. But if you're part of a smaller company--ostensibly the ones with the most to gain from a speedy connection--odds are you're out in the broadband cold.

Broadband adoption rates, and the economics of providing such services, were two of the topics discussed during a debate here Tuesday. Sponsored by the Cato Institute, a libertarian think tank, the debate brought together telecommunications analysts from around the world.

Blake Bath, managing director and senior equity analyst at Lehman Brothers Holdings Inc., noted that while broadband deployment hasn't always gone as smoothly as some hoped, it is nevertheless "alive and well."

The industry's most noticeable gains have been in the business sector, Bath says. There, more than 55 percent of companies offer high-speed access to their employees, up from only 2 percent in 1990, he says.

The reason broadband investment in the business sector has been so prevalent, he argues, is that broadband companies can recover their investment more quickly in that market.

Small business lag

However, not all businesses should be considered the same. There's a big difference between large businesses and small ones, says Scott Cleland, chief executive of the Precursor Group investment research firm.

Cleland says that broadband deployment for large businesses is "almost 100 percent." The real problem lies in getting access to small businesses, where there is a "broadband paradox."

Small businesses make up one-third of the country's economy, but only 10 to 20 percent of them have broadband access, he says.

The problem is that many of these businesses, which would stand to benefit tremendously from high-speed access, are too far away from the necessary infrastructure, he says. Broadband providers simply haven't yet seen a way to make infrastructure expansion to these areas profitable.

The same physical distance that hurts small businesses is also the reason that high-speed access for home users isn't more widespread. Most of the day's panelists say broadband access currently reaches 7 to 9 percent of homes.

Another serious deployment problem: reaching rural areas. Erik Olbeter, senior Internet analyst at Schwab Capital Markets, says a comparatively lower rate of return on rural infrastructure investments and the difference between rural and urban economies make rural deployment a tricky proposition.

Doug Ashton, managing director at Bear Stearns, says Germany, with its dense population, is an example of an area where broadband deployment has worked. Users live closer together, allowing for easier sharing of network infrastructure.

Ashton says that deployment strategies in the Unites States are not working and that answers will have to be found in policy.

"Without policy change, it's pretty hard to see how you can get any real access modernization, at least over the next three to five years."

(Chris Porter writes for the Medill News Service, a PC World affiliate.)

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Porter

PC World
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?