How Broadband Can Drive Economic Renaissance in a Once-Great American City

It’s hard to think of a great American city that has been the subject of more economic and social analysis, commentary and general hand-wringing than Detroit. Once considered the most cosmopolitan city of the Midwest, it experienced a decades-long decline in jobs, punctuated by more than 200,000 lost jobs during the 2000s. Today it has the nation’s second-highest violent crime rate among large cities, and while there is some evidence that an economic revival is beginning to take root, much more progress will be needed before the city that I love returns to glory. President Donald Trump can help accelerate the Motor City’s revival, and in doing so begin to fulfill one of his most hopeful and optimistic campaign promises: Increasing investments in “blighted American neighborhoods.”

One area in which he can help is by encouraging private-sector investments in infrastructure, specifically in digital infrastructure – the framework around which entire economies will soon be built.

Traditional infrastructure investments in projects like roads, bridges, and waterways are important. But historically, investments in new technologies – as opposed to upkeep of already-established infrastructure – have always produced greater payoffs in terms of productivity gains and economic growth.

In the context of Detroit, this means that from a return on investment (ROI) perspective, it makes enormous sense for Washington and Detroit to focus on building the kind of critical infrastructure that will support technologies of tomorrow and the industries of the future.

That is why it’s extremely encouraging to see that Federal Communications Commission (FCC) Chairman Ajit Pai this month came to Detroit to tout the importance of internet-based technologies and digital empowerment. Mr. Pai’s “Digital Empowerment Agenda” sprouts from the understanding that digital connectivity and broadband has the potential to transform lives, disrupt entire industries, and revitalize entire communities. Few cities are more in need of the kind of individual empowerment that digital access to information provides than Detroit. Far too many residents lack equal and often affordable internet access that can offer critical information regarding employment, health care and education.

To encourage further deployment of broadband, Washington should reduce the kinds of regulatory barriers that deter long-term private-sector investment decisions. The FCC is reforming its own regulations to bring down the cost, in dollars and in time, of deploying broadband nationwide, as well as encouraging the replacement of copper wires with superior fiber optic cables.

But as Washington does its part, Detroit also needs to adopt a competitive strategic mindset if it’s to make itself more appealing to the kind of private sector broadband investments that will lead to exciting, game-changing industries. That can begin by city leaders resolving to create a welcoming business climate.

The fact is that in many urban areas, government policies wittingly or unwittingly create significant barriers to investment. In other words, red tape hinders investment. Internet Service Providers are frequently charged exorbitant costs to access publicly owned rights of way; they are billed unreasonable fees for the rights to rent space on utility poles. These fees may benefit cities in the short-run because they produce important revenue streams, but in the long-run, they are counterproductive because they dis-incentivize private sector investment.

How so?

Imagine that an Internet Service Provider (ISP) is considering making a multi-billion dollar investment in next generation broadband infrastructure in one of two cities: City A, where the city government imposes high costs for rights of way and pole attachments, and City B, which has eliminated all fees associated with broadband infrastructure in order to attract private sector investment. The ISP is obviously going to favor the city that has made a conscious decision to roll out the red carpet.

Next generation networks have the potential to make Detroit a global leader in myriad emerging sectors including, the automotive trend toward driverless cars, smart factory manufacturing, healthcare information and mobile care, and financial services, among others.

If Detroit commits to becoming a national leader in 5G infrastructure, it will undoubtedly attract many more new and emerging industries.

Along the way, it will create jobs and wealth.

Detroit is down, but it is by no means out. True to its motto its well on its way to "rising from the ashes.” And by resolving now to become a national leader in next generation broadband infrastructure, it can accelerate its progress and once again become the great American center of innovation it once was.

Jeremy White is a Detroit native and the founder of DiverseTech, a platform that promotes increased diversity in the technology industry.

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