A cashless stimulus plan

Consequently, at a time when America’s workers continue to struggle and unemployment persists at unacceptable levels, there remains at least one reason for New Year’s optimism: were we to make just a few sensible, pro-competition reforms, both Wall Street and Main Street could reap substantial benefits without burdening taxpayers.

Call it a cashless stimulus plan.

Far too many small businesses still lack access to the most effective broadband infrastructure. Many important applications based “in the cloud,” for example, are especially hard to supply over non-Bell networks, even though big businesses have had them for years. But ushering in the next era of advanced broadband applications for small businesses and entrepreneurs is not as hard as you might think. To unleash the innovation we so desperately need, the Federal Communications Commission need only reform its rules with a simple change requiring the nation’s local phone companies to sell higher-bandwidth digital connections (at the same retail rates as they charge their own customers) to the smaller, nimbler competitors who are the true innovators in this space. The market will take care of the rest.

As a result of the FCC’s market opening policies of the late 90s, new competitive entrants introduced small businesses to innovative technologies which the Bell providers had deliberately delayed deploying for fear of cannibalizing monopoly profits accrued from slower, older technologies. For small businesses, AT&T and Verizon were late to the game, and in some cases failed to show up at all.

Unfortunately, this age of innovation and investment came to a screeching halt over the last few years as the FCC abandoned its earlier competitive agenda. The FCC’s pull-back limited the competitive use of fiber connectivity and Ethernet and thereby restricted the best broadband technologies to only the largest of customers. As a result, the normal business cycle of innovation stalled, and our small and medium businesses, the job-engine of our economy, were denied the next generation of communications technology. Ironically, this competitive chokepoint continues to survive at exactly the moment when our current Administration is otherwise intelligently moving forward with a comprehensive National Broadband Plan.

Small and medium-sized companies not only are relegated to slower Internet connections but are denied access to an enormous array of new applications ranging from integrated high speed document management, high-resolution video conferencing, sophisticated graphic design networks and emerging communications practices such as telemedicine and telecommuting. The upshot is that a significant number of our nation’s otherwise productive businesses have little choice but to fight an uphill battle relying on 20th century technologies to generate 21st century jobs.

To cite just one example, Cbeyond has recently added cloud servers to its product portfolio. This new technology allows our 55,000 small business customers to move their most demanding computing tasks into the cloud, thereby freeing them to focus on growing their businesses rather than maintaining this kind of expensive and complex technology on their own. But if our nation’s small businesses are going to get the full benefit of this new technology and other innovations being offered by companies like mine, they must be allowed access to the best broadband available. The FCC can make this happen with one simple change to its outdated rules.

To be clear, we’re not asking for a handout. Cbeyond and other innovators will pay AT&T and Verizon their market price just to get what the law requires under Congress’s 1996 legislation: access to existing Bell networks. It’s a smart deal that works out for everyone: the Bells get additional revenue while small businesses simultaneously gain access to productivity-boosting twenty-first century applications. Economic recovery doesn’t have to be expensive and doesn’t require additional taxpayer-funded stimulus. Smart and fair telecom policy that accelerates small business growth would be a great gift to our nation for a happy and prosperous 2011. 

Jim Geiger is founder, chairman, president & CEO of Cbeyond, Inc. in Atlanta.