Broadband Availability Growing
GRAND RAPIDS — Businesses expect to sell more wares and gain more visibility through the “fat pipe,” high-speed Internet connections delivered by broadband.
Michigan isn’t on the fastest track for delivery of broadband services, but it’s definitely connected and getting more so every day, according to representatives of six leading broadband access providers gathered at Grand Valley State University’s DeVos Center recently for a GLIMA West presentation.
Most people agree broadband will be delivered in one way or another, said Jennifer Jurgens, panel discussion moderator and vice president of business development and marketing for Adtegrity.com. The question is which technology — DSL, cable or wireless —is going to be the technology of choice and what application will best serve customers.
“We find the problem with the DSL and cable modem services is the service level agreements,” said Todd Van Belkum, president of Van Belkum Voice & Data. “The $40-per-month connection really doesn’t provide the level of quality or service that the customer is looking for.”
All of the technologies have good potential and promise, said Matt Farner, president of AnyWhereUR.net. It’s just a matter of being able to offer a customer a product that will work for them. Mike Depoian, area sales director for AT&T Broadband, pointed out that providers have to look at the type of business they’re working with, the specific needs of that business and what kind of information they’re transferring, not just what they can afford.
There’s no doubt among providers that broadband access will enhance the end user’s Internet experience. But as Kirk Stewart, vice president of Global DSL Communications, pointed out, some customers may not comprehend broadband’s advantage and its business applications. So getting the state connected will require some customer education.
Broadband provides small to medium-sized businesses with “big-company” applications such as video mail, conferencing and training, Van Belkum observed, and the applications are both endless and cost effective for businesses as well as individuals.
So if broadband is so great, why is it taking so long to get it?
Farner, who has sold telecommunications services for a dozen years for companies from Ameritech to Qwest, said telecom companies tend to cling to the perverse belief that any product they offer — no matter how poorly they package it or how slowly they employ it — will be embraced by the public.
“The bottom line is we better break out of that mentality or we’re going to have some new people come on and just take over this industry,” Farner said. “The level of service generally offered by telecommunications companies is very poor. We all need to live that down to some extent. If I can’t do better than the phone company, then shame on me. It’s an ongoing problem and consumers, especially, have just had their bellyful.”
Telecom is one of the only industries where the product delivered is not ready made, said Catherine Sionkowski, field marketing manager for Qwest Communications.
“Yes, we have the infrastructure, the networks and all the capabilities, but when an order is created, we create a custom set of events that occur,” she remarked. “We create a connected infrastructure from our backbone directly to your doorstep. It takes a little time to assure that all those connections work all the way down to the doorstep. The people who are behind it and who honestly believe in it are working to help their customers get what they need.”
Installation time could be reduced by eliminating some of the middlemen, according to Todd Gardner, director of product development for Iserv Company Inc. Middlemen are what’s causing delivery delays on the customers’ end. Some companies can deliver wireless in three days and others may require 21 days to provision a circuit. The longer customers have to wait, the less tolerant they become, he said.
In both small and large cities, it’s business that’s driving the push for connectivity. The residential market for broadband lags behind because many home users are still in the late adapter stage, Sionkowski said. However, residential demand for broadband will likely grow as households become multiple computer users.
Some 11 percent of home Internet users have broadband, and although 11 percent seems like a small number, Jurgens said, broadband users are 77 percent more online than dial up Internet users. Broadband households, in fact, spend the same amount of time online as they do watching television, which she said could become the next Internet evolution.
Infrastructure, too, remains a problem in some smaller cities where central offices may have poor quality copper wires, Gardner said. Furthermore, the residential market for broadband isn’t as profitable as the business market. He said he’d have to sell 4,000 residential accounts to make what he makes off 15 business accounts.
Panelists agreed that broadband access will probably become an inexpensive commodity at some point. Twelve years ago, long distance prices were five times what they are today, Farner stressed.
“The real issue is if you can consistently deliver service on a high quality basis you’re going to be in a position to capitalize on that,” Farner said. “I don’t know what business will be six or eight years from now, but I know if we stay focused on that arena and on our customers, we’ll find a way to make a living and make customers happy.”
Stewart believes broadband will get less expensive over time but that it will continue to create a revenue stream. It’s not so much that the bandwidth is going to be free, he said, but that there will be a bundling of value-added services across bandwidth.
That brought panelists to the final question — to bundle or not to bundle. And if products are bundled, what’s the right mix?
Customers who’ve had bad experiences with providers may be especially choosy about services, Gardner said. He thinks companies will continue to offer packages, but they’re going to have to offer an a la carte menu as well. Customer needs, as always, will continue to drive how packages are bundled, Stewart added.
AT&T’s Depoian believes telecom companies should offer a breadth of services to suit each customer’s unique needs. Older companies that use older technologies can run certain applications on a VPN solution where DSL works fine and run other applications on a connection such as a T1 line, he said.
Opportunities for connectivity outside of larger cities are increasing. Global DSL’s target market, for instance, is not the tier ones, but the tier two and three markets, such as Kalamazoo, Lansing and Holland. Once those are wired, connectivity will become a reality in smaller markets, Stewart said.
In places where broadband isn’t currently available, wireless, satellite or microwave could provide connectivity, Sionkowski added. As the technology advances and the costs go down for telecom companies, they’ll be able to extend broadband’s reach farther and farther away.
Gardner said in the smaller cities it’s companies like AnywhereUR.net that are stepping up to the plate with services, and they might be the only ones providing broadband in smaller cities for a long time. The larger, global companies seem reluctant to branch into smaller markets, and he thinks that trend will continue for a while.
“That’s all the more reason why people need to make sure that the Michigan Public Service Commission forces issues like these,” Gardner emphasized. Another tactic? Bully your provider, he said.
There’s not a place in Michigan’s Lower Peninsula that customers can’t get a full-fledged connection — if they’re willing to pay for it, Farner pointed out. You get what you pay for in the dot com world just like anywhere else.
“Ameritech and the other providers up there have got the pipes. Trust me,” Farner said.