In seven neighborhoods in New York City, businesses still can’t get high-speed Internet access (known as broadband) at prices they can afford according to a new reportby the Center for an Urban Future. These neighborhoods include Long Island City, Williamsburg, Hunts Point, Red Hook, Sunset Park, DUMBO, the Brooklyn Navy Yard and several other commercial areas.
“It is unacceptable that in huge areas of the city, in some of the fastest growing business sectors, small businesses have to choose between dial-up access and broadband that costs $1000 a month or more,” said City Councilmember Gale Brewer, the head of the Technology in Government Committee, who is leading the council’s investigation of this issue. “There has been a market failure in providing affordable broadband access -- a failure that is hobbling the economic growth of businesses outside of Manhattan.”
The “broadband gap” is a problem because the high-speed, “always-on” Internet is critical for New York’s economic competitiveness since the neighborhoods affected are the areas with the greatest potential for growth in industries such as health services, the arts, film and music production, air transportation and food production, which typically locate their offices outside of Manhattan’s central business districts.
Broadband refers to the high-speed Internet delivered in a variety of ways -- over copper wires by the telecommunications company (called a “digital subscriber line” or DSL), cables by the TV company, a T-1 line, fiber optics or wireless. The benefits of broadband include the ability to use much cheaper (sometimes even free) telecommunications services provided by companies such as Vonage, Lingo and Skype, which only work with a high-speed Internet connection. These companies allow you to make phone calls over your Internet connection for a fraction of the cost charged by Verizon. Tech-savvy businesses and non-profit organizations have already started using these alternative services for all of their telecommunications needs in order to save money.
There are several reasons for the broadband gap, says Phaedra Thomas of the Southwest Brooklyn Industrial Development Corporation, an organization which provides business services to 2,400 businesses that represent over 40,000 jobs in two of these districts.
First, in terms of DSL service, the copper wire infrastructure is too old, which makes for slow transmission speeds and frequent service interruptions. Second, these neighborhoods are too far from the main telecommunications office to get service. Third, cable modem service is not available since these businesses are primarily commercial areas without demand for cable TV. Finally, at around $600 a month, higher-quality solutions (such as T-1 lines) are not affordable for these businesses.
Other obstacles to broadband access in these areas include the lack of competition between multiple providers, the low demand for broadband, the difficulty of accessing and installing wires in some buildings, and the lack of knowledge about broadband options expressed by small businesses.
Currently, the city is considering playing a more active role in closing the broadband gap by conducting more research about broadband connectivity, educating businesses about broadband, promoting sharing of a broadband connection by businesses and founding a citywide broadband commission.
Another policy being considered is to start a municipal wireless broadband initiative. "Wireless may be the only solution going forward," said Agostino Cangemi of the city's Information Technology and Telecommunications Department.
Philadelphia has already received widespread attention for its wireless initiative, which does not use public or school technology funds and instead relies on a public-private partnership. Philadelphia plans to create the infrastructure for high-speed affordable Internet access by summer 2006 for an initial investment of $10.5 million to construct and $1.5 million annually to support. However, Verizon has already successfully lobbied at the state level to make such municipal telecom projects illegal in many states. The Philadelphia project was granted an exception since it will be nearly complete before the law goes into effect.
Broadband for Affordable Housing
While solving the broadband gap for New York businesses is critical to the city’s economic future, there is another obvious gap in high-speed Internet access that might be just as important to the city’s future: affordable housing. Currently, there is a pressing need for more affordable housing units and plans are going forward to build them. It is imperative that these new units are pre-wired for broadband because it can be done for only a few hundred dollars per unit or .1 percent of the unit’s cost. However, it is much more expensive to install broadband after the building has been constructed.
Low-income people need access to the Internet in their homes because sometimes that is the only place where they may have the time or the privacy necessary to conduct research on personal health and financial issues, apply for a job online or take a distance-learning course.
Despite this, there are arguments that, even at one-tenth of one percent of the cost, funds should be used to build more affordable housing instead. In addition, installing broadband alone will not improve the opportunities of low-income residents. There is also a need for cheap Internet access, computer equipment and training. In a new City Council resolution, city officials recommend that affordable housing residents earning less than 80 percent of the median area income should get Internet access for free or for less than $10 per month.
“The benefits of this technology are so compelling that no less than 20 states and the District of Columbia, ranging from California to Kentucky, have amended their housing finance policies to encourage all new development of affordable housing to include high-speed Internet access,” said Mark Levine of One Economy, a national non-profit.
There is wide-spread support for the City Council resolution; included among the supporters are the New York City Department of Housing Preservation and Development and the New York City Housing Authority. But without legislation at the state level mandating the pre-wiring of affordable housing units for broadband, it is unlikely that builders will choose to implement this on a wide scale.
Laura Forlano is a doctoral student studying communication technology policy at Columbia University.
