Telecommunications Presentation By: Samantha Musil From Rural Development in the United States: Connecting Theory, Practice, & Possibilities By: William Galston & Haren Baehler

Telecommunications What is Telecommunications? - Definition What is Telecommunications? - Definition History History Competition vs. Universal Service – ‘Who’s job is it anyway?’ Competition vs. Universal Service – ‘Who’s job is it anyway?’ What does Telecommunications mean to Rural Areas? What does Telecommunications mean to Rural Areas? Access Access Future Future Discussion/Questions Discussion/Questions

What is Telecommunications? Telecommunications is a multibillion dollar industry Telecommunications is a multibillion dollar industry It is both a manufacturer and a service provider It is both a manufacturer and a service provider

Definition Telecommunications functions in 2 ways: 1). As an “Economic Base” that directly generates new wealth through development and sales of communication products and information services. 2). As a piece of the collective infrastructure that all other industries need in order to function.

Definition (cont.) “Telecommunications is the node that links production activities with exchange activities involving the circulation of goods and with information activities that coordinate the economic system.” “Telecommunications is the node that links production activities with exchange activities involving the circulation of goods and with information activities that coordinate the economic system.” - - Hills

History In 1934 AT&T was granted a government protected monopoly over local and long- distance service. In 1934 AT&T was granted a government protected monopoly over local and long- distance service. In return AT&T committed itself to providing telecommunication service to every household in the United States. In return AT&T committed itself to providing telecommunication service to every household in the United States.

History (cont.) In 1946 the Rural Electrification Administration charter was expanded to include low-cost loans to rural Telephone companies. In 1946 the Rural Electrification Administration charter was expanded to include low-cost loans to rural Telephone companies. As a result, over the next 50 years, virtually all American households and businesses gained basic service and affordability. As a result, over the next 50 years, virtually all American households and businesses gained basic service and affordability.

History (cont.) In 1982 a consent decree broke up AT&T and replaced the monopoly with competition. In 1982 a consent decree broke up AT&T and replaced the monopoly with competition.

Competition vs. Universal Service Competition is attractive as a means of forcing greater efficiecy, innovation, and consumer choice. Competition is attractive as a means of forcing greater efficiecy, innovation, and consumer choice.

‘Who’s job is it anyway?’ Parker et al. recommends that the proper role of government should be to encourage the private sector to provide affordable access to telecommunications and information services comparable to those available in urban areas. Parker et al. recommends that the proper role of government should be to encourage the private sector to provide affordable access to telecommunications and information services comparable to those available in urban areas.

‘Who’s job is it anyway?’ (cont.) “Any economic development policies should be focused on generating and augmenting demand for telecommunication services, not on generating infrastructure.” “Any economic development policies should be focused on generating and augmenting demand for telecommunication services, not on generating infrastructure.” - - Gail Garfield Schwartz Schwartz recommends that government make a high priority commitment to expanding service in areas of public interest: education and health care. Schwartz recommends that government make a high priority commitment to expanding service in areas of public interest: education and health care.

What does Telecommunications mean to Rural Areas? Will rural areas share in the new jobs and income created by this booming new industry? Will rural areas share in the new jobs and income created by this booming new industry? Will the state-of-the-art products of the industry penetrate the rural areas and improve the economic competitiveness and quality of life? Will the state-of-the-art products of the industry penetrate the rural areas and improve the economic competitiveness and quality of life?

New Jobs and Income Jobs and income: While bringing telecommunication can bring in new jobs, these job are for the most part not glamorous. They are relatively clean and safe, however not very dependable. They hire many seasonal and part time employees, pay low wages, and provide minimal benefits. Jobs and income: While bringing telecommunication can bring in new jobs, these job are for the most part not glamorous. They are relatively clean and safe, however not very dependable. They hire many seasonal and part time employees, pay low wages, and provide minimal benefits.

How Telecommunication Products can Improve Economic Competitiveness Better price information Better price information Lower travel costs Lower travel costs Reduced need for inventory Reduced need for inventory Timely delivery of goods Timely delivery of goods Enhanced responsiveness to market demands Enhanced responsiveness to market demands

How Telecommunication Products can Improve Quality of Life Transportation Transportation Health Care Health Care Education Education Social Services Social Services Civic participation Civic participation Cultural activities Cultural activities

Access Today 96% of all farms have basic telephone service, compared to 35% after WWII. Today 96% of all farms have basic telephone service, compared to 35% after WWII. The 4% without service lacks service because they cannot afford it, not because it is unavailable. The 4% without service lacks service because they cannot afford it, not because it is unavailable.

Access (cont.) “Income is a far better predictor of whether a household will have telephone service than urban/rural location.” “Income is a far better predictor of whether a household will have telephone service than urban/rural location.” - - Parker et. Al.

Access (cont.) Of the 6.8 million households in America without telephone service, only about 3% (or 183,000) lack service because of geographic location. Of the 6.8 million households in America without telephone service, only about 3% (or 183,000) lack service because of geographic location.

Future Telecommunications development has the potential to make large and lasting changes, not only in the ways rural residents do business, but also in how they conduct their community affairs. Telecommunications development has the potential to make large and lasting changes, not only in the ways rural residents do business, but also in how they conduct their community affairs.

Future (cont.) If telecommunications-based strategies succeed in creating adjacency where it does not exist spatially, and if these strategies succeed in neutralizing the effects of isolation, remoteness, and distance, then the decay of boundaries will be hastened. If telecommunications-based strategies succeed in creating adjacency where it does not exist spatially, and if these strategies succeed in neutralizing the effects of isolation, remoteness, and distance, then the decay of boundaries will be hastened.

Discussion/Questions