Sofia Bunger works on her laptop at Greyfriar's Coffee & Tea Co. on Friday, Nov. 27, 2015, in Chattanooga, Tenn. When Randy Boyd was named to head economic recruitment for Tennessee in January 2015, he traveled across the state doing listening sessions and quickly learned the biggest business concerns were not necessarily about taxes, regulations or incentives.
"Probably 50 to 75 percent of the input I got concerned the need for better rural broadband," Boyd recalled.
A new survey that attracted more than 23,000 respondents from across the state underscores the concerns among residents and businesses about the need for faster internet links in rural parts of the Volunteer State. While a growing share of businesses and workers say they need high-speed internet service to do their jobs or conduct business, 34 percent of rural counties still lack high-speed broadband service.
"From an economic standpoint, having strong broadband service is essential to what we can offer a business," Boyd said. "The good news is that you can now do business anywhere in the world if you are connected on the internet. But you have to have adequate broadband to compete today. In the future, no business is going to set up shop in a community if you don't have broadband."
Boyd said high-speed internet service is increasingly vital for e-commerce and online training of workers.
The need for speed
- 34 - Percent of businesses that said broadband is essential to selecting their location - 55.7 - Percent of businesses that said broadband was essential to remain in their location - 15.5 - Percent of economic development agencies reported businesses frequently chose not to locate in an area due to insufficient broadband. Source: Survey of more than 23,000 homes and businesses by Strategic Networks Group (SNG) and NEO Connect for the Tennessee Department of Economic and Community Development.
A new study prepared for Boyd's department of Economic and Community Development by the Strategic Networks Group and NEO Connect said the minimum broadband speed should now be at least 25 Mbps for downloads and at least 3 Mbps per second to upload data. While 98 percent of urban residents in Tennessee have access to such service, only 66 percent of those in rural areas do.
"We have a tremendous digital divide," Boyd said.
How to best bridge that divide - and what role government will play in subsidies or relaxing regulatory restrictions - is likely to be decided in the next Tennessee General Assembly that convenes in January. Earlier this year, lawmakers put off decisions about broadband service, including a proposal to remove territorial limits on municipal broadband services, until the ECD study was released and another report being prepared by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) is finished.
State Sen. Mark Norris, R-Collierville, who pushed for the TACIR study, said he expects legislation to be introduced and passed next year. But he stressed he is cautious about state government handing out money or encouraging government competitors with private businesses.
Minnesota this year offered $25 million to rural telecom providers to extend broadband service into underserved areas. New York authorized $500 million for a similar program, Boyd said.
"There is no way we would have that kind of money, but it is something at least we could consider because the facts are that the economics to deliver broadband to some of our most rural areas just aren't there," Boyd said. "So there could be a role for the state to come in and help and mitigate some of those costs to make it more affordable."
Boyd, who is attending the Republican National Convention in Cleveland, Ohio, this week, said there is a lot of talk in the GOP about deregulation and another approach might be to consider allowing electric cooperatives to offer broadband service.
"They are in every community and reach every part of the state," Boyd said. "If there is one thing that would probably get to the most people the fastest it would be having the electric coops being able to participate in broadband, if they chose to do so."
Electric cooperatives serve 71 percent of Tennessee's landmass, including a majority of the rural and economically disadvantaged regions identified in the study as areas of greatest need.
"Limited access to broadband has serious consequences for rural Tennessee, and co-ops are uniquely positioned to provide real solutions," David Callis, CEO of the Tennessee Electric Cooperative Association, said in a statement this week. "Co-ops have a legacy of expanding critical services beyond the city limits. A generation ago, the issue was power; today, it is broadband."
Boyd said he hopes governments can at least agree to working better with one another to encourage placement of conduit or fiber optic cable when a trench is dug since 60 to 80 percent of the cost of laying new fiber involves opening up a trench or burying conduit.
"The great news is that there is so much attention and focus on this issue now, that I feel very confident that there will be some significant solutions presented and passed next year," Boyd said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.