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The telecommunications promise for economic development.

Imagine being transported back to the 1300's to argue the benefits of scientific agriculture to an audience of skeptical landowners; or presenting electricity and the assembly line to a roomful of 17th Century European artisans. You might feel like a contemporary technology expert expounding on telecommunications technology as the next powerhouse for economic development.

The Telecommunications Revolution is transforming economic development, just as the Agricultural and Industrial Revolutions did in previous centuries.

The Clinton/Gore administration's Agenda For Action on the National Information Infrastructure (NII) states:

"Information is one of the nation's most critical economic resources, for service industries as well as manufacturing, for economic as well as national security. ...In an era of global markets and global competition, the technologies to create, manipulate, manage and use information ... will help U.S. businesses remain competitive and create challenging, high-paying jobs. They also will fuel economic growth which, in turn, will generate a steadily-increasing standard of living for all Americans."

According to Larry Irving, head of the National Telecommunications and Information Administration, "for the first time in memory, the White House has elevated technology, and particularly telecommunications technology, to the top of its agenda for economic development."

Now the papers are full of stories about mergers and buyouts in the world of telecommunications, entertainment and cable giants, the latest being the merger between Bell Atlantic Corporation and Telecommunications Inc. (TCI).

While this may seem like nothing more than scrambling for assets, or an aerial view of a giant Monopoly board, local government leaders are asking: "What will this mean for us, and how can we benefit our citizens?"

How Will This Affect Me?

The picture for cities will vary, depending on early participation in shaping the NII. The NII is a vision for America's future in which electronic connectivity between all homes and businesses will greatly advance our social and economic development.

The picture for telecommunications giants, which have the power (and resources!) to promote their interests through lobbying efforts, is naturally market driven and seems clearly headed in the direction of entertainment. Their immediate interests lie in improving their capability to carry movies, shopping channels, and other interactive services into people's homes; the promise of social and economic benefits to the public and smaller businesses is not addressed.

So what can local governments do? According to John Eger, Chairman of San Diego Mayor Golding's Advisory Committee on the City of the Future and former telecommunications advisor to Presidents Nixon and Ford, there is a small window of opportunity for local governments to seize the initiative and set their own agenda for action. "In partnership with private industry," he advises, "cities need to fashion a vision of the future which recognizes that the business of the new information infrastructure means jobs, dollars and enhanced quality of life. Cities which don't embrace such a vision," he adds, "are likely to be left out of the mainstream of economic development."

What is the local

government agenda?

Local governments need to serve citizens. To do so they need to increase revenue and save costs, while keeping taxes low. Simple! Of course, the grim reality of low federal funding levels, costly mandates, demand for services, and citizen outcry against taxes, has squeezed municipalities into a painful corner.

Access to information and technical connectivity carry the potential to improve the economic picture for local businesses and local governments.

A shoe manufacturer in Texas, for instance, able to instantly access specifications on a large shoe order required in Africa, can quickly pick and choose from various options available through the information highway, bid low, and get the order. This type of activity, while feeding a global economy, also provides a healthy stream of local tax revenue.

Increasingly cities are generating revenue, improving services and operating more efficiently by using electronic connectivity to carry information and services. Cities are vital to the flow of information because they are keepers of records: land and property data, court docket information, building and code specifications, etc. Certainly, this information is free to any individual for his or her own use. However, when use of government information will generate business income, (as in use of property records to service the real estate market), it is fitting that the city be enabled to apply this revenue stream to service provision - especially since local taxpayers have paid for the data to be collected in the first place.

A third and vitally important aspect of the local government agenda is tied to leverage. Since local governments often own the rights of way in which utilities and telephone and cable companies lay their cables, every new installation of telephone copper wire, cable wire, or high-speed, high-capacity fiber optic cable, presents an opportunity to further satisfy local needs.


Source of Revenue:

* Seattle, Wash. is triggering private industry competition on a broadband (fiber-optic) network being laid by the City in phased increments. By offering space on the jointly owned network, the partnership would have a continuous source of revenue.

* All of Iowa, including its rural localities, is hooked up to a statewide, state financed fibernet. Private users of the network pay a fee.

Free Ride

* Many jurisdictions, like Prince George's County, Md. allow fiber optic cable to be laid in exchange for the option to use it for city or county purposes. This scenario enables municipalities to "ride the highway" without paying a cost to install it or a "toll" to use it.

* Oklahoma allowed Sprint to wire Oklahoma City to Tulsa with fiber in exchange for use of the cable.

"That's Not For Me"

While you may not care about keeping up with the Joneses, it will be important to determine, together with local businesses and residents, where you want your municipality to be in 5 or 10 years from now.

And yes, all municipalities will be affected by the TCI/Bell Atlantic type of cable/telephone mergers. Currently 50 state public utility commissions regulate the telephone industry. Tens of thousands of cable commissions regulate local cable service and prices. The question of how merging services will be regulated should be monitored by every town and city.

Other complex issues will need constant attention. Telecommuting and electronic access could cause a "hollowing out" of urban locations, leaving office buildings untenanted and causing shifts in downtown development and business activity. Cities must address these trends with local business leaders to ensure a balanced healthy future for developed and developing regions.

You don't have to be a "techie" to capture the benefits and opportunities that the NII can provide your community. Encourage your staff to stay informed, use resources such as NLC and PTI, and begin and maintain a dialogue with your business community.

San Diego, CA, is fashioning a "City for the 21st Century". Mayor Susan Golding recently told the San Diego Communications Council that advances in telecommunications, if coupled with a bold plan and a vision of San Diego as an international information region, could make it a powerhouse in the new world order. "San Diego's plan is being developed by a partnership of businesses, telecommunication companies, and governmental leaders in the region," she said. "It consists of creating an information infrastructure or backbone that will provide the ability to communicate between government, industry and citizens in a seamless manner. That means information can be sent or received by anyone who chooses to connect to that network."

Mayor Golding holds a strong belief that local leaders need to understand that technology is no longer a luxury, but rather a fundamental requirement for doing business in today's commercial environment. "Information is an asset that has value," she said. "It should be utilized to provide maximum return to our citizens." She stressed the regulatory role of cities and the need to ensure that competition is facilitated by sound public policy.

Get Involved!

The PTI Telecommunications and Information Task Force is closely following developments on the NII. If you would like to participate in our efforts, please call Francie Gilman at 202/626-2412 for a copy of our brief survey and a White Paper on the role of local governments in the NII.

PTI and NLC are designing an action agenda for cities. NLC's T&C Steering Committee recently identified economic development as one area in which telecommunications will have an important role.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Walsh, Taly
Publication:Nation's Cities Weekly
Date:Nov 15, 1993
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