Broad Horizons

For a while, it looked like the sun was setting on broadband. Now be prepared for the dawn of a new, improved marketplace.

This was supposed to be the year broadband made the Internet a truly super highway. The fiber optic backbone of the New Economy was going to deliver lower operating costs, new pathways to consumers and new entrepreneurial opportunities.

Instead, some of the largest custodians of broadband have been struggling just to stay afloat-and many didn't. A good chunk of the nationwide broadband infrastructure has changed, with billions of lost investment dollars, thousands of discharged telecom workers and plenty of creditors simply blown off.

But it's not your problem-it's in the hands of the pseudo-regulators, congressional dilettantes, investment bankers and lawyers who run the telecommunication industry.

Your problem is that as a business owner, you can't afford not to have broadband. In fact, you need a lot of other people to have broadband, too. And that's where the rubber is not making contact with the Information Superhighway. Broadband customers have suffered through difficult installations, slow and spotty connections and frustrating service.

That translates into unrealized worker productivity on your Web site. According to Nielsen/NetRatings, broadband surfers spend 67 percent more money online than those with dial-up, or "narrowband," access. It's also easier for DSL and cable modem users to digest video, audio or other clever marketing techniques and to stick with a shopping cart to completion.

How much better could it get? We might find out this year, because as that Nielsen/NetRatings tidbit suggests, the news about broadband is not all bad.

The Hits Keep Coming

Try as they might, broadband providers haven't scared off broadband users. The number of net surfers with DSL, cable or other broadband connections nearly doubled in 2001 to about 22 million, according to Nielsen/NetRatings. That's about 20 percent of the 106 million Americans who are online. Those newbies are crucial, says T.S. Kelly, a Nielsen/NetRatings director and principal analyst in New York City, because the switch to broadband is providing a much-needed second wave of growth.

An average broadband surfer generates 50 times the Internet data traffic of a dial-up user, adds Abhi Ingle, vice president of marketing for Covad Communications in Santa Clara, California. "People who have broadband spend more time online, visit more sites, transact more business and send higher- capacity stuff like digital photos."

Only 3 percent of the nation's optical fiber backbone is needed to handle that traffic. Bringing broadband to that "last mile" between telco offices and customer sites doesn't just help besieged telecom companies, says Ingle; it also gives a big boost to any business connected to the Internet.

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This article was originally published in the April 2002 print edition of Entrepreneur with the headline: Broad Horizons.

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