Net Needs Speed to Grow

Millions of Americans miss the benefits of the emerging digital economy because federal regulations are delaying enhancements to the Internet's infrastructure, says a coalition of telecommunications, technology, and public interest groups favoring high-speed access.

Internet backbone builders can't add high-speed access points fast enough, says the report, released Tuesday by iAdvance. The group's founding members include Bell Atlantic, Gateway, and SBC Communications.

Not enough backbone hubs are being built to provide access to consumers and businesses outside major population and financial centers, the report concludes. Sixty percent of metropolitan areas do not have access to these hubs, and in rural areas the hubs are "virtually nonexistent," according to iAdvance researchers.

"The vast majority of Americans in inner cities and rural areas simply do not have access to the high-speed Internet and are unable to reap the full benefits of the digital economy," says Erik Olbeter, a coauthor of the report.

Federal restrictions on the transmission of data across local boundaries discourage the installation of hubs and the investment in broadband technology, conclude Olbeter and Matt Robinson, the other coauthor. Broad band can perform up to 20 time faster than dial-up phone-based access to the Internet.

FCC: Hands off Broad Band

The Federal Communications Commission takes a deregulation approach to the broadband market, a stance that FCC Director William Kennard recently reaffirmed. But this does not mean a step back on data restrictions for local phone companies that were imposed under the Telecommunication Act of 1996, Kennard says.

The Bell companies "want the ability to move data outside of their local areas. In effect they want to enter the long-distance market...and make an end-run around the Telecom Act," Kennard said in a speech last week. "Small business, entrepreneurs, and consumers of all kind will be best served when there is true competition in all our communication services from local phone competition to broad band. They will not be served by a gutting of the Telecom Act."

The iAdvance study identified 12 states, called the "Disconnected Dozen," that are "at the highest risk of being left behind" in providing a high-speed Internet infrastructure to their citizens. Arkansas, for example, has two hubs. The report predicted that it would have 28 if not for data restrictions.

"American consumers and businesses are clamoring for high-speed Internet access that allows them to easily buy and sell over the Net, reduce inventory expenses, and take educational courses anywhere in the world from their own communities," says Representative Bob Goodlatte (R-Virginia). He is sponsoring legislation that lifts the restrictions on data transmission. "Unless we change the regulations that impede investment in Internet facilities, only those who live in large cities will enjoy those benefits."

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