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Peter Orne

Wireless Government


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01/24/2008

Ensuring US Competitiveness Prompts Need to Revisit Wireless Business Strategies


The standing of the United States in the international broadband ranking numbers is often debated, but it's the personal anecdote that drives home the story.

“So much of our country is falling behind in our ability to produce high-value-added jobs,” said Jim Hueser, Business Unit Executive for IBM’s Wireless Broadband Americas Group, at the 15th W2i Digital Cities Convention, in Washington, DC, this past December.

“I go back to the Midwest, where I grew up, where I worked in the factory as a kid, to put my way through school," Hueser said. "It’s still a factory town. Factories are disappearing…. Without a doubt we’re losing a lot of our smaller towns and cities. The jobs have dried up. I can’t even say we’re losing the manufacturing — we’ve lost it.”

Hueser evoked an urban myth of sorts. "In Long Beach, California, they say the sun sets at 3:00 in the afternoon because of all the stacked up cargo containers from the Pacific Rim. We’ve got nothing to ship back. Now, that’s hyperbole; it’s not true. We are exporting, and the dollar’s value helps with that. But the bottom line is, we’re not a manufacturing powerhouse anymore.”

The challenge is twofold — to transform the United States domestically bridging the domestic digital divide — and globally — ensuring it remains a competitive information society in the 21st century.

"The economy has changed, and we’ve got to look to things like research technology," Hueser said. "We have to realize that if we don’t keep creating high-value jobs, this country will be in a world of hurt."

Revisiting the Search for Solutions

The stakes have never been higher for local communities and regions exploring the broaband-wireless opportunity. At the same time, the path to viable implementation remains complex.

"Every community we work with spends so much of their time trying to figure out how to implement broadband in the community, and how to pay for it," Hueser added. "In my 25+ years at IBM, I’ve never spent so much time as I have in my last four or five years trying to build a business case, figuring out the ROI."

Midway through 2007, a cloud of press coverage of the U.S. local-government broadband-wireless market began to grow. Whether in BusinessWeek or on NPR, the stories often targeted the financial and political weaknesses associated with citywide wireless deployment models, especially when they centered on single-use public-access models. Often naming Philadelphia and San Francisco, the reports typically cited low demand and quoted dissatisfied network users complaining about their unsatisfactory customer experiences.

Last August, W2i observed that a "a long overdue realignment of core business strategies — more inclusive, for example, of anchor tenancy and local-government business processes reengineering — could not only reshape the industry in a positive way but could open up opportunities to a whole new set of actors, both on the technology-equipment side and on the service-provider side. Simultaneously, systems integrators and application vendors, who are more technology agnostic, will likely welcome a refined business-model landscape that is based on a balanced view of reality."

Applications and Risk Management

Identifying the core value proposition of citywide wireless networks emerged as a central issue toward the end of 2007. Several increasingly popular application areas that promise to deliver real ROI to local government include:
  • Network and Sensor-Enabled Surveillance
  • Fixed and Mobile Video Surveillance
  • Emergency Response and Interoperability
  • Wireless Campus for Education
  • Wireless Mobile Workforce
In addition to rolling out cost-saving applications that enhance public safety and improve citizen satisfication, W2i believes there will be a continued emphasis in 2008 on managing the risks associated with deployment through a greater understanding and increased sophistication around:
  • Broadband-Wireless Technology — the density requirements and limitations
  • Implementation Schedules — more realistic time frames
  • Rights of Way — roadblocks identified ahead of time
  • Local Champions — requirements for "going the distance"
  • Funding Sources — clearer identification; multipurpose networks
  • Public-Private Partnerships — more balance for sustainabilty
  • Vendor Wisdom — years of case studies and experience

One benefit of so many lessons learned over the past half decade of broadband-wireless experimentation is that, in 2008, expecations are now more in line with what is possible. There is more certainty around the technology, and with clear ROI identified up front, investors and constituents are more likely to understand how public access, accessibility and economic-development may be achievable down the road.

The Global Moment

At the same time, global and local pressures to roll out networks have never been stronger. In the broader sweep, said IBM's Hueser, changing demographics, economic globalization, constituent expectations, natural resources, and ideological conflicts are all placing pressure on local communities as they face fiscal constraints and responsibilities, maintain social services, confront safety and security challenges, and improve their competitiveness.

“We here in the U.S. represent about 5% of the world’s population, yet we consume between 20–25% of the natural resources," Hueser said. "This country knows how to spend money; we know how to consume. But are spending it in the right places? What I want to submit to you this morning is that we don’t have a choice. We need to make this investment, and some communities have."

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