If you had asked me 10 years ago what the internet would look like in 2018, I’m certain I would not have predicted the major players driving internet usage today – primarily because those drivers were in their infancy at the time. Netflix, for example, had just launched an online streaming service in 2008 to complement its then-groundbreaking (and Blockbuster-destroying) DVD-by-mail service. Today, Netflix streaming consumes 15 percent of the world’s internet bandwidth – more than any other application. In North America during peak evening hours, Netflix can consume 40 percent of all downstream traffic.
Social media, something that was also just beginning to find its way a decade ago, is now a big consumer of bandwidth – representing some 5.1 percent of the world’s downstream internet traffic. The big player in that group – Facebook – today has 1.47 billion daily active users. A decade ago, Facebook didn’t even have a like button (which means it must have been far less distracting during work hours!).
Obviously, streaming entertainment services and social media have become an integral part of how many people live, communicate, and interact. In the business world, the connectivity provided by high-speed bandwidth has become not just a nice-to-have, but an absolute imperative. This means that high-speed connectivity can’t depend on whether someone lives or works in a large city, a small town, or a rural area. It needs to be ubiquitous. The agribusiness in Atlanta, Indiana, needs access to high-speed fiber broadband every bit as much as the high-powered law firm in downtown Indianapolis.
It is gratifying to see legislators and policymakers, not to mention private businesses, beginning to shine a spotlight on the need to meet the increased demand for bandwidth. We saw several major changes in the focus on broadband in the Hoosier State this year. I anticipate that as users increasingly rely on the internet as a pathway for their social interaction and entertainment choices, and as businesses increasingly demand high-speed connectivity to compete effectively in a global marketplace, we will see this focus on broadband become ever more acute in the coming years.
Government investment in broadband
Passed in March, Indiana House Bill 1065 “authorizes the office of community and rural affairs to award grants to qualified broadband providers in connection with qualified broadband projects involving the deployment of infrastructure to provide qualified broadband service in unserved areas in Indiana.” While the effects of this bill remain to be seen, it obviously signals the importance the state of Indiana places on ubiquitous, high-speed bandwidth. House Bill 1065 provides real money for these communities.
In September, Governor Holcomb took HB 1065 one step further when he unveiled his $1 billion “Next Level Connections” infrastructure plan. In addition to accelerating major road projects, improving the state’s trail system, and attracting more international flights to Indianapolis, “Next Level Connections” includes a $100 million investment to increase broadband speeds, which will help bring affordable, high-speed, fiber optic broadband access to un- and under-served communities in the state. This investment is a firm commitment to bridge the digital divide between rural and urban areas and increase productivity across the state.
Around the same time the Governor was announcing his administration’s broadband priorities, a Purdue study was released that contends that for every $1 you invest in rural broadband expansion, the community gets $4 back in economic activity. While there are a lot of assumptions that go into that statistic, if Indiana commits to a 1-to-4 investment ratio, it’s going to accelerate growth throughout the state.
New players in broadband: REMCs
In addition to the increased attention from policymakers, broadband connectivity is drawing in new players as well. Although there have been connectivity improvements in rural Indiana – most notably in areas served by IFN’s 20 local exchange company owners, more must be done. IFN has primarily been a middle-mile provider, reaching 78 of Indiana’s 92 counties. We want to expand to more counties and deepen our presence in the counties we already serve. We need partners who are going to service both the residential and business needs of the communities. Not all fiber broadband providers run fiber to the home (FTTH), so partnerships to bridge the that physical fiber line divide will need to grow.
One of the new partnerships we’re exploring is with the Rural Electric Membership Co-ops (REMC) community. These companies already have facilities (e.g., utility poles) in many rural parts of the state. There may be a natural synergy associated with IFN working with its own local exchange company members and REMCs to ensure that un- and under-served areas of the state have access to high-speed fiber broadband. During 2018, several REMCs either launched a FTTH initiative or began exploring one. We expect to see more of this activity in 2019.
The explosion of investment in fiber broadband we saw in 2018 should continue in 2019. Infrastructure firms and private equity groups are investing in broadband providers and bringing significant capital to this market. The advent of 5G will only enhance the demand for ubiquitous high-speed connectivity. We look forward to being part of the continued bandwidth revolution in 2019.
Jim Turner is the President and CEO of Intelligent Fiber Network.