State Grants Fuel Counties’ Broadband Studies

May 6, 2002
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Ottawa County and Muskegon County will each use $100,000 state grants to examine how well the area is wired for high-speed Internet service, an amenity that has become increasingly important in the economic development field.

The counties will match the grants from the Michigan Economic Development Corp. with local funds — $33,334 for Ottawa County, $40,000 for Muskegon County — to study the existing telecommunications infrastructure, conduct needs assessments and formulate a plan for further deploying broadband Internet service locally.

The initiative is welcomed by economic development administrators who in just a half-decade have seen the availability of a strong telecommunications network become an increasingly important tool in their work to retain existing employers and help them grow, as well as recruit firms to the region.

“It’ll be more so in the future and it’s something we need to address,” said Ken Rizzio, executive director of the Ottawa County Economic Development Office.

Rizzio cites a checklist published in the December 2001 issue of Inc. magazine that ranks telecommunications infrastructure fifth out of nine criteria — behind workforce, availability of capital, economic development incentives and transportation — that corporations use in deciding where to locate a facility.

A rapidly growing use of high-speed Internet service to conduct business transactions is driving the need for a strong telecommunications infrastructure, said Todd Battle, executive director of Muskegon Area First, an economic development agency in Muskegon County. Battle specifically points to the automotive and aerospace supplier sectors that are required by their customers to conduct a large portion of their business online.

“It’s critical we have the infrastructure to support that and that our suppliers and our companies have access to those telecommunications networks so they can compete,” Battle said.

While most areas in both counties already have high-speed Internet access available through cable modem or digitial-subcriber line (DSL) service, gaps do exist in coverage. Cable modem and DSL also have their limitations.

DSL’s speed and availability is limited by a user’s proximity to a telephone switching station.

Cable modem is limited by its deployment largely in residential areas, leaving pockets of industrial areas unserved, said Joy Gaasch, president of The Chamber of Commerce of Grand Haven, Spring Lake and Ferrysburg.

Both types of high-speed services don’t always lend themselves well to the kind of intense level of use that industries today require, Gaasch said.

“We have some good systems, but there are areas that are underserved,” Gaasch said.

A study conducted late last year on behalf of The Chamber found the Grand Haven-Spring Lake area relatively well-served by its existing telecommunications network, although some deficiencies do exist.

The larger issue identified in that study was the underutilization of technology by small businesses, either because they weren’t aware of what’s available or didn’t believe it was useful to their business.

That finding points to the problem many smaller communities have in luring telecommunications investment: demonstrating a market demand. Telecommunications providers, just like any business, are reluctant to invest in deploying technology in a community or upgrading a network unless they see a clear market demand.

The challenge for communities seeking a better telecom infrastructure, as identified in The Chamber’s study in Grand Haven last year, is educating small businesses on the benefits of the technology and how to use it to their advantage. That, in turn, increases market demand and draws investment from telecommunications companies.

“They’re going to have to get a return on their investment if they’re going to put fiber in the ground,” Gaasch said. “They’re going to have to have a level of customers that merit the investment.”

The $100,000 planning grant that Ottawa and Muskegon counties received last week became available through Gov. John Engler’s LinkMichigan initiative, approved by legislators just weeks ago, that seeks to dramatically boost the state’s telecommunications infrastructure.

The grants were among 13 grants totaling a collective $1.8 million the MEDC awarded on behalf of 45 counties statewide.

The grants will help the counties develop their own “last-mile solutions” that will enable them to leverage and link with the broader LinkMichigan strategy, MEDC Chief Executive Officer Doug Rothwell said.           

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