On December 18th, along with a group of some 50 other civic and business leaders from around the country, I was invited to a White House Business Council briefing in Washington, D.C.
One of the speakers was the ultimate IT manager: Steve VanRoekel, the U.S. Chief Information Officer. He runs the world’s largest IT department: the U.S. Government’s which has an $82 billion annual budget (after the sequester cuts).
While discussing the priorities of the government around information technology and procurement, VanRoekel, a former Microsoft assistant to Bill Gates, made an off-hand comment that when he buys a house his top criterion is the broadband bandwidth that is available for that house.
This comment took me back to the early days of broadband Internet and public Wi-Fi infrastructure deployment (when I was the general manager of the DSL business unit at PCTEL and a board member of the Wi-Fi Alliance, representing Texas Instruments). Almost all companies that invested heavily in DSL infrastructure deployment (such as COVAD, NorthPoint, Rhythms, Flashcom) and companies that invested in public Wi-Fi access (such as MobileStar) launched with dramatic fanfare, but ended up failing, getting acquired, or otherwise writing off billions of dollars investments.
However, that investment was not lost. The infrastructure put in place is still used today. MobileStar’s Wi-Fi deployment is what provides AT&T’s Wi-Fi access at Starbucks locations, for one.
I would claim that the competitiveness of a nation in the Internet age depends heavily on the bandwidth available at that nation. We are moving into an era of the “Internet of things” where devices across the world are connected through an IP link, in applications where low latency is important.
The overwhelming majority of internet traffic continues to shift towards video, with high bandwidth demand, according a Cisco white paper. Between YouTube, Netflix, Hulu, Skype, Ustream and many other video services, the demand for high bandwidth for video applications is clear.
More and more business is done online, and in “the cloud.” The ability to have virtual presence and conduct business thousands of miles from where your physical presence, and to upload, download, or otherwise access large amounts of data quickly depends on, you know it, bandwidth.
Steven VanRoekel (center left), U.S. Chief Information Officer, and Sam Brown (right), Director of the White House Business Council.
According to Akamai’s latest “State of the Internet” report the U.S. average downstream data rate is 7.4mbps. As impressive as this rate is, the U.S. ranks eighth in the world, following South Korea (14mbps), Japan, Hong Kong, Latvia, Switzerland, the Netherlands, and the Czech Republic.
Service providers (such as AT&T, Verizon, and others) are likely to roll out high-speed infrastructure in a slow rate, given the massive write-offs of DSL infrastructure in the late 1990s they witnessed. I encourage the U.S. government to be the one funding, subsidizing, or otherwise incentivizing such deployment as a national priority.
Higher average bandwidth rates would lead to stronger competitiveness. We need to plan for 100mbps average bandwidth by 2020, and 1gbps by 2030. If we continue the 2012 28 percentage annual growth rate, we could already achieve 42mbps by 2020.
We need to aim higher and pull away from the eighth place to claim our leadership. The private sector will not do it. Their pure financial ROI would not justify such an investment in infrastructure. The pain of the DSL and public Wi-Fi is still too vivid.
But the US government’s $82 billion IT department could, because the return on the investment is U.S. competitiveness.
Oh, and I’m sure that Mr. VanRoekel does not have the final say on what house to buy.