TIA forum debates incentives for broadband growth

May 2, 2002
April 30, 2002--The focus was on gaining benefits for small to medium-sized businesses.

A large and contestable market exists for high-speed Internet access to American businesses, particularly small and medium businesses (SMBs), according to discussion at the broadband forum recently held by the Telecommunications Industry Association.

TIA analyst Arthur Gruen, president of Wilkofsky Gruen & Associates and primary author of TIA's annual Telecommunications Market Review and Forecast, noted revenues for high-speed Internet access via DSL and cable grew from $3.2 billion in 2000 to $5.7 billion in 2001. The TIA forum, however, focused on how to extend the availability of high-speed Internet access beyond the small percentage of households and SMBs now enjoying it.

At the forum Joe Kraemer, director of the Law and Economics Consulting Group, shared his research on the accessibility and potential uptake of broadband for SMBs. He provided examples of how businesses are using broadband to improve revenue and operating margins, including a machine shop which increased productivity 40% when it purchased a package of high-speed Internet access, intranet hosting and Web hosting.

"SMBs can use high-speed Internet access to improve their bottom line, but many of them are still waiting for affordable access to reach them," says TIA President Matthew J. Flanigan.

TIA Enterprise Futures Subcommittee Chairman Henry Dewing led the audience of TIA members and guests in a discussion of how proposed legislative and regulatory initiatives might change the way enterprises purchase communications solutions. Al Kramer, a partner with Dickstein Shapiro Morin & Oshinsky, delivered the competitive local exchange carrier perspective of current regulatory actions that could radically alter the market dynamics for providers of high-speed Internet access. Kramer emphasized the potential impact on customer choice and competition for deregulation of broadband.

Link Hoewing, Verizon's assistant vice president of Internet and technology policy, discussed the company's view of the market and its position that regulatory relief is needed to give incumbents a bigger incentive to rebuild their networks to provide high-speed access for more homes and businesses. Hoewing emphasized the market impact of growth in intermodal competition as cable and wireless service providers enter the broadband market.

To order a copy of the transcript, call Jill Rothenbueler at [email protected] or (703) 907-7648.

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