[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE HEARING ON
SMALL BUSINESS AND BROADBAND:
AN ENGINE FOR ECONOMIC GROWTH
AND JOB CREATION
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
MAY 12, 2010
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 111-067
Available via the GPO Website: http://www.access.gpo.gov/congress/house
----------
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
DENNIS MOORE, Kansas
HEATH SHULER, North Carolina
KATHY DAHLKEMPER, Pennsylvania
KURT SCHRADER, Oregon
ANN KIRKPATRICK, Arizona
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
MELISSA BEAN, Illinois
DAN LIPINSKI, Illinois
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
BRAD ELLSWORTH, Indiana
JOE SESTAK, Pennsylvania
BOBBY BRIGHT, Alabama
DEBORAH HALVORSON, Illinois
SAM GRAVES, Missouri, Ranking Member
ROSCOE G. BARTLETT, Maryland
W. TODD AKIN, Missouri
STEVE KING, Iowa
LYNN A. WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
BLAINE LUETKEMEYER, Missouri
AARON SCHOCK, Illinois
GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Karen Haas, Minority Staff Director
.........................................................
(ii)
STANDING SUBCOMMITTEES
______
Subcommittee on Contracting and Technology
GLENN NYE, Virginia, Chairman
YVETTE CLARKE, New York AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
______
Subcommittee on Finance and Tax
KURT SCHRADER, Oregon, Chairman
DENNIS MOORE, Kansas VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona STEVE KING, Iowa
MELISSA BEAN, Illinois W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, Pennsylvania, Chairman
HEATH SHULER, North Carolina MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana LOUIE GOHMERT, Texas
(iii)
Subcommittee on Regulations and Healthcare
KATHY DAHLKEMPER, Pennsylvania, Chairwoman
DAN LIPINSKI, Illinois LYNN WESTMORELAND, Georgia,
MELISSA BEAN, Illinois Ranking
JASON ALTMIRE, Pennsylvania STEVE KING, Iowa
JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida
BOBBY BRIGHT, Alabama GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
______
Subcommittee on Rural Development, Entrepreneurship and Trade
HEATH SHULER, North Carolina, Chairman
MICHAEL MICHAUD, Maine BLAINE LUETKEMEYER, Missouri,
BOBBY BRIGHT, Alabama Ranking
KATHY DAHLKEMPER, Pennsylvania STEVE KING, Iowa
ANN KIRKPATRICK, Arizona AARON SCHOCK, Illinois
YVETTE CLARKE, New York GLENN THOMPSON, Pennsylvania
(iv)
C O N T E N T S
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OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Graves, Hon. Sam................................................. 2
WITNESSES
Burfield, Mr. Evan, Chairman and CEO, Synteractive Corporation,
Washington D.C................................................. 3
Messere, Mr. Steve, Founder and CEO, Revenue Spark Inc., New
York, NY....................................................... 6
Whisenant, Mr. Greg, Founder and CEO, CrimeReports, Draper, UT... 7
McDonald, Mr. Tom, CEO, BeSafe, Hyannis, MA...................... 10
Dofelmier, Ms. Lindsay, Co-Owner, Urban Agent Team LLC, Boise, ID 12
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M.......................................... 25
Graves, Hon. Sam................................................. 27
Burfield, Mr. Evan, Chairman and CEO, Synteractive Corporation,
Washington D.C................................................. 29
Messere, Mr. Steve, Founder and CEO, Revenue Spark Inc., New
York, NY....................................................... 36
Whisenant, Mr. Greg, Founder and CEO, CrimeReports, Draper, UT... 44
McDonald, Mr. Tom, CEO, BeSafe, Hyannis, MA...................... 49
Dofelmier, Ms. Lindsay, Co-Owner, Urban Agent Team LLC, Boise, ID 52
Statements for the Record:
The National Cable & Telecommunications Association.............. 55
(v)
FULL COMMITTEE HEARING ON
SMALL BUSINESS AND BROADBAND:
AN ENGINE FOR ECONOMIC GROWTH
AND JOB CREATION
----------
Wednesday, May 12, 2010
U.S. House of Representatives,
Committee on Small Business,
Washington, DC. The Committee met, pursuant to call, at 1:00 p.m.,
in Room 2360 Rayburn House Office Building, Hon. Nydia Vel zquez
[chairwoman of the Committee] presiding. Present: Representatives
Vel zquez, Dahlkemper, Altmire, and Graves.
Chairwoman Velazquez. This hearing is being called to
order. Just as the interstate highway system revolutionized
American commerce, today we are presented with a similar
challenge. Building a nationwide broadband infrastructure is an
equally ambitious task, and it is just as fundamental to our
prosperity in the Twenty-First Century.
Over the next decade, we can expect the growth of this
field to produce good-paying jobs for millions of Americans.
The number of jobs dependent on broadband and IT are expected
to grow by 25 percent over the next 10 years, creating
opportunities for large and small companies in every sector of
the U.S. economy.
While building a nationwide broadband infrastructure will
be vital to our economy's long-term health, deploying this
technology also carries immediate economic benefits, at a time
when our nation needs every job we can find. Some have
estimated that over the next 4 years, we will see 30,000 jobs a
year from the broadband investments funded through the Recovery
Act alone.
Beyond the immediate payoff, widespread broadband adoption
will mean new economic opportunity for communities across the
nation. Small businesses already benefit enormously from the
Internet. For Americans looking to launch a new enterprise,
broadband offers lower start-up costs. This is especially
important now, as many dislocated workers are looking to
entrepreneurship as a way to replace lost income.
For the established small business, high speed Internet can
expand a firm's client base using a company website, social
networking, or other forms of online advertising. Firms can
utilize voice and video communication as a low-cost method to
connect with customers around the world and reach previously
untapped markets. They can store data online, access office
productivity tools, and even improve the energy efficiency of
their business.
The FCC recently released a National Broadband Plan, an
ambitious initiative aimed at accelerating the adoption of high
speed Internet. Bringing the public and private sector
together, the plan offers steps to accelerate the rollout of
broadband and help small businesses embrace these benefits.
Although three-quarters of small businesses currently have a
website, only one in four sell their products using e-commerce.
In today's global economy, that is simply not good enough.
The National Broadband Plan could help narrow this gap,
creating additional growth opportunities for small companies.
As this plan is refined and implemented, the Committee will
need to ensure that entrepreneurs' needs are kept top of mind.
Putting broadband in more American homes and businesses is
just one part of the equation. The Internet has always served
as an unparalleled laboratory for innovation and
entrepreneurship.
If we are to reap the full benefits of this economic
engine, it is vital that the Internet remain a platform where
free speech and new ideas flourish and consumers can connect
with whomever they choose while accessing services of their
choice.
Just last week, the FCC released a new framework aimed at
preserving this freedom without discouraging investment in our
nation's broadband infrastructure. In coming weeks, the
strengths and weaknesses of this initiative will receive
significant consideration. Small businesses have much at stake
in how the debate plays out. It is my hope that today's
discussion will shed light on what these policies mean for
online entrepreneurism.
The business owners before us today highlight the variety
of opportunities created by broadband. I look forward to
hearing their thoughts on how broadband is empowering America's
small businesses now and how Congress and the FCC should take
their needs into account as we craft policies that will shape
the Internet's evolution for decades to come.
With that, I thank all of the witnesses for being here
today and yield to Ranking Member Mr. Graves for an opening
statement.
Mr. Graves. Thank you, Madam Chair, for holding this
important hearing on the impact that broadband is going to have
on the economy and its ability to foster Internet growth.
Technology and the ways we communicate with one another are
constantly evolving. You know, 150 years ago we had to elicit
the help of the Pony Express to deliver what would inevitably
take days to travel from a place like St. Joe, Missouri to San
Francisco. Today we can send an entire book as a .pdf file
through the e-mail and rest assured that file is going to be
received across the globe in just a matter of seconds.
To do research 50 years ago, we had to go to the public
library and hope it had the materials that we needed. Now you
can log onto your computer and access more information than the
Library of Congress can even contain.
If you wanted to buy something 20 years ago, you probably
had to get into your car and go to a nearby store. Thanks to
online shopping, we can now simply log onto our computer and
virtually buy any product from businesses, large and small,
from across the globe.
We are all aware of the limitless services technology and
the Internet provide to our daily lives. We tend to forget that
these everyday conveniences would not be available if it
weren't for the contributions of small businesses, like those
that are represented here today.
The change from molasses-like dial-up connections to warp-
speed downloads comes from technological innovations in network
architecture. From DSL to cable modems, to fiber optics to-the-
home, the continued development and improvement of the Internet
relies on the investment of billions of dollars by private
sector enterprises.
Unfortunately, the Internet and related technologies are
not as widespread as we would like to think. And there is a
severe lack of appropriate infrastructure that limits many
American communities, businesses, and families from gaining
full access to these services.
Rural areas in many states are particularly likely to lack
the infrastructure needed to allow them to benefit from this
vital technology. Without access to affordable broadband
services, the economies and development of these communities
are going to suffer.
With other policies that this government adopts with regard
to technology and broadband, we must first make a commitment to
ensuring that small businesses in rural communities will
benefit from the infrastructure investment.
Regulatory policies that diminish the incentive for such
private sector investment will benefit neither small businesses
nor the economy that will rely on them for the growth needed to
create jobs.
I look forward to hearing testimony from our witnesses
today on the use of broadband and the access that is going to
enable the creation of a lot of new jobs and the policies
needed to maintain America's lead in technology. I appreciate
you all being here today. And I know some of you traveled from
a long ways. Thank you.
Chairwoman Velazquez. Well, with that, I welcome all of the
witnesses. Our first witness is Mr. Evan Burfield, who is the
Chairman and CEO of Synteractive Corporation. Mr. Burfield
previously founded NetDecide, a company that provides wealth
management solutions. He co-founded Synteractive in 2003, which
is a strategy and business solutions consulting firm.
You will have five minutes to make your statement. Welcome.
STATEMENT OF EVAN BURFIELD, CHAIRMAN AND CEO, SYNTERACTIVE
CORPORATION
Mr. Burfield. Chairwoman Velazquez, Ranking Member Graves,
and distinguished members of the Committee, as the Chairwoman
says, my name is Evan Burfield, and I would like to thank you
for holding this important hearing on the role broadband plays
in driving innovation and creating economic growth and new
jobs.
I am the President and CEO of Synteractive, a company
dedicated to solving the really big problems in the world
involving connecting people and information.
Broadband, together with instantaneously scalable cloud
computing and interoperable applications, serves as a linchpin
for creating the future of business. The media and the man on
the street has a feeling that the Internet is changing the way
products and services get to market, but today I will walk you
though the facts.
The first thing to know is that today's broadband and the
tools it powers are enabling innovative small businesses to
out-compete larger competitors.
In 2009 Synteractive was a key part of the team that won
the contract to rebuild Recovery.gov, which Newsweek has
referred to as ``perhaps the clearest, richest interactive
database ever produced by the American bureaucracy.''
Synteractive, along with our partners Smartronix, TMP
Government, and KPMG, was able to build the entire platform in
less than ten weeks for around six million dollars. Within a
few days of kicking off the effort, we created a development
environment using Amazon Web Services, which provided us with
access to vast, instantly scalable computing resources for a
few thousand dollars per month.
We built Recovery.gov with platforms such as Microsoft
SharePoint and FAST Search because they were off the shelf and
interoperable, allowing us to focus on design and innovation,
rather than recreating the wheel.
We wanted the site to help citizens find a recovery job. So
we created a tool in less than a day using Microsoft Bing
search service that enabled citizens to search for jobs across
companies that received recovery funds. Similarly, we made
Recovery.gov available in over 50 languages in a few days by
snapping Google Translator into SharePoint
To build a platform like Recovery.gov 10 years ago would
have been a $100 million effort and would have by its very
nature been done by a company like IBM or Lockheed Martin. Our
team was able to create an innovative solution using tools from
a wide variety of vendors faster and more efficiently than
Lockheed of ten years ago ever could have. Simply put, small
businesses have never been more able to punch so far above
their weight.
While I am very proud of my company's success with
Recovery.gov, we have our eyes on a larger target: creating a
set of online services that provide other businesses with the
kind of power that we have at Synteractive.
Synteractive has clients ranging from Recovery.gov to the
American Petroleum Institute to Microsoft. We have grown our
revenue from $150,000 in 2006 to nearly $6 million last year.
We have the latest in software and communications tools
available to us from the way we collaborate to managing our
sales process to keeping our books straight.
What is more interesting, though, is what we don't have. We
don't have a receptionist because an online service
automatically routes calls and delivers voice mails to us as e-
mails wherever we are in the world. We don't have computer
servers humming away in our office because everything occurs on
demand in the cloud delivered by broadband. Because we don't
have servers, we haven't had to hire a systems administrator.
We are a lean business, where every person we hire is
focused on driving innovation for our clients. As a result, we
can offer superior talent and solutions at competitive rates.
Synteractive is working with one of America's leading
broadband companies and Microsoft to bring this kind of
efficiency to other businesses, particularly small businesses.
We are creating online services that provide the core tools
a small business needs, built on Microsoft technologies, and
delivered as a bundle along with broadband Internet access.
The innovation enabled by broadband is critical because it
drives efficiency. Efficiency is critical because it makes
small businesses leaner; more competitive; and more flexible;
and, therefore, more resilient to economic downturns; and
responsive enough to drive growth as economic conditions
improve.
Congress should continue to take steps to keep this engine
of economic growth humming. First, Congress deserves tremendous
credit for the support already given for making broadband
pervasive across America through legislation such as the
Recovery Act. It is critical for our democracy and our economy
that every American, regardless of where they live, should have
access to cheap and reliable broadband.
Second, it is of the utmost importance that small
businesses in America have a level playing field to compete and
win. I know Congress and policy-makers are playing close
attention to net neutrality. And the members of this Committee
are more attuned to the ongoing policy debate than I am. But as
an entrepreneur, I would encourage policy-makers to steer clear
of foreclosing new business opportunities for small businesses.
Third, broadband and small businesses are a powerful engine
for job creation, but it is important to understand that these
jobs require education and skill. Talent is a fuel that drives
small businesses like Synteractive. We require people who
understand strategy, economics, analysis, design, and
engineering. Regardless of experience, we demand a solid
foundation in rigorous thinking, scientific and engineering
knowledge, and the ability to write and communicate clearly.
Small businesses simply aren't creating many jobs relevant for
mushy thinking, poorly educated people.
Therefore, the final step that Congress should take to
ensure that broadband and technology continue to be an engine
for job creation is to improve the quality of education in
America.
Chairwoman Velazquez, Ranking Member Graves, and
distinguished members of the Committee, thank you for your time
and consideration on this important topic.
[The statement of Mr. Burfield is included in the
appendix.]
Chairwoman Velazquez. Thank you, Mr. Burfield.
Our next witness is Mr. Steve Messere. He is the founder
and CEO of Revenue Spark, located in New York. Revenue Spark
provides business services to a wide variety of sustainable
growth companies.
Welcome, sir.
Mr. Messere. Thank you. Thank you, Chairwoman Velazquez,
Ranking Member Graves, members of the Committee.
STATEMENT OF STEVE MESSERE, FOUNDER AND CEO, REVENUE SPARK INC.
Mr. Messere. My name is Steve Messere, and I am the founder
and CEO of Revenue Spark. Revenue Spark is a company that is
dedicated to creating and fostering relationships between
sustainable technology companies. These are companies that are
creating new opportunities on an almost daily basis through the
spirit of invention and innovation and, as it is traditionally
defined, what it means to be an American. Just like railroads,
telegraph and telephone transformed the American business,
broadband is similarly transforming the way Americans do
business today.
Revenue Spark is the world's first sales outsourcing firm
to dedicate our entire focus to helping sustainable technology
companies succeed in a marketplace. We do this through a
combination of new technologies that didn't even exist five
years ago.
The core of our operation is domestic sales outsourcing.
Domestic sales outsourcing avoids the pitfalls of hiring new
business development staff. The typical hiring procedure yields
a failure rate of over 50 percent in the first six months. And
for a new business, this can be easily mean the difference
between success and failure.
Domestic sales outsourcing also transfers the time-
consuming tasks associated with research and establishing leads
and doing the development work that can oftentimes keep a
company from succeeding. So the challenge of most businesses is
deciding how to staff a team that can overcome these hurdles
and provide reliable and repeatable revenue.
We are in the midst of a real paradigm change in how
computer information is handled. Again, five years ago,
individuals were dependent on their own personal computers to
save and store their information. Now that information is
increasingly shared over far-flung computer networks.
This is the cloud computing. And it means instantaneous
cooperation is now possible between different individuals
regardless of where they might be located. And this translates
into increases in productivity.
As we all know, increased productivity means a better
bottom line. And a better bottom line means more and better
jobs. Whether this happens via SalesForce, Google Documents,
Skype, Jigsaw, Web Conferencing, Twitter, iPod, all of these
things are the numbers of new technologies. It all means the
same thing, which we are changing the way we do business,
almost on a daily basis. And all of these technologies rely on
fast, reliable, and accessible broadband.
The Internet removes these economic barriers. So that at
Revenue Spark, we are, in effect, a virtual company. For us,
the term ``company headquarters'' is almost irrelevant. We do
almost everything via telecommuting.
All the members of the Revenue Spark sales development team
have a proven track record of being successful in sales
outsourcing. In addition, all those members have spent an
average of over 15 years working. But they need these tools. So
telecommuting allows us to attract the best at their best. And
it is an the advantage for us and for society in these
following things.
It provides fuller employment; less strain on
infrastructure; increased productivity; reduction in turnover
and absenteeism; reduction in carbon footprint and energy use;
an expansion of our talent pool; and, one of the most important
things, it helps us put recently displaced people back to work
because they're not limited by the geography that they face.
So what I think we want to conclude with is that small
business and medium-sized companies are the engines of economic
growth in the United States today. They are dependent on the
Internet to bring their ides to market. Broadband is the new
Main Street and not just Main Street U.S.A. but everywhere in
the world.
For us at Revenue Spark, the Internet is an indispensable
tool for what we do and what we do best, which is tell stories,
because that is what we really do, we tell a story, a true
story, about new technologies and about the boundless creative
accomplishments of American innovators. And that story is as
old as America itself.
There is a new chapter that is being written, even as we
sit here, a tale of otherwise undiscoverable technologies and
how America can flourish and grow in a way that is sensible,
sustainable and, yet, preserves our precious resources for our
children and children's children, not just here in the U.S.,
but all over the world. And for all over the world, it is, of
course, a story about jobs, very good jobs. And we use
websites, and we use these tools to make that possible.
Given a choice today between having telephone service or
Internet, the vast majority of companies we work with would
choose the Internet without hesitation. And that is the very
definition of the sea change that we are faced with here today.
All of these tools that we have talked about and more serve
to increase efficiency, which means a better bottom line, which
means more jobs, good jobs, the jobs of today and tomorrow, not
the jobs of yesterday.
Chairman Velazquez, Ranking Member Graves, and members of
the Committee, thank you for this opportunity.
[The statement of Mr. Messere is included in the appendix.]
Chairwoman Velazquez. Thank you.
Our next witness is Mr. Greg Whisenant.
Mr. Whisenant. You got it. Thank you.
Chairwoman Velazquez. He is the founder and CEO of
CrimeReports in Draper, Utah. CrimeReports is the largest
online resource for crime information, offering software tools
for law enforcement agencies.
Welcome.
Mr. Whisenant. Thank you. Thank you, Chairwoman Vel zquez,
Ranking Member Graves and members of the Committee.
STATEMENT OF GREG WHISENANT, FOUNDER AND CEO, CrimeREPORTS
Mr. Whisenant. My name is Greg Whisenant. I am the founder
and Chief Executive Officer of Public Engines, Inc. We make the
CrimeReports.com website.
I founded CrimeReports.com in 2007. And as of today, we
work directly with nearly 1,000 law enforcement agencies
throughout the country to build the National Crime Map, which
would give every American free access to street-level crime
information within 24 hours of its occurrence.
We sell a monthly subscription to law enforcement agencies
under a software as a service model. We have a single instance
of software code on the Internet that works with nearly any law
enforcement agency's existing technology systems.
We don't sell hardware, software licenses, or maintenance
contracts. We do everything from the Internet. So we are very
capital-efficient. Our prices are often 1/100th of what our
competition charges. So we have enjoyed exceptional growth in
just three years.
We work with law enforcement agencies in most of the
districts represented by the members of the Committee here. We
cover more than 20 percent of the U.S. population.
I would like to emphasize four key observations in my
testimony today. Observation number one, CrimeReports is a
small business that uses technology and increasingly broadband
to compete effectively and create jobs.
Like many other companies in the United States, without the
Internet, CrimeReports.com would not exist. And, with it, we
have seen exceptional growth. We currently have 41 employees,
of which 30 were hired in 2009, mostly in sales and software
engineering.
The users of our service are not just law enforcement
agencies but ordinary members of the public, whose ability to
gain access to street-level crime data is made easier with
Internet access. This is particularly important in public
safety, where members of the public can change their behaviors
to protect themselves, their families, and their property if
they know what types of crimes are happening.
My company's service does not rely specifically on
broadband. However, as we have grown to support this vast
network of agencies, our customers tell us that we could help
them with new bandwidth-intensive applications. The limitations
of these advanced applications are constrained by technology in
that the entrance fee to the toll road is simply too high.
Although the invisible hand will solve many of these problems
over time, we can move the needle in a meaningful way with a
vision of where we are heading and a concerted effort to get
there.
Observation number two, broadband is vital infrastructure
for technology and non-technology companies alike. And as an
equalizer in business, it encourages innovation that benefits
consumers.
Like other conditions, such as education, access to
capital, and a market that is largely unencumbered from
excessive regulation, widespread access to broadband is a
critical ingredient in economic recovery, and more so for long-
term economic prosperity. It lowers the barriers to entry for
people to create new and innovative technologies. It lowers
costs for the delivery of content. It democratizes
participation in the economy for entrepreneurs with new and
exciting ideas.
When I started CrimeReports.com, we had virtually no direct
competitors. As we started to grow quickly to expand the
National Crime Map, several existing software companies began
to pay attention and released competitive products. The
Internet and broadband were tools that we used to drive down
the cost of providing our service, and soon other companies
used these same tools.
Today we are focusing on efficiency, growing quickly and
optimizing our processes, but ultimately it is the consumers of
our service, local law enforcement agencies, that are the clear
winners in this textbook competitive market, where private
companies are working to create the most value at the lowest
price.
By any measure, widespread access to broadband is an
accelerator to efficiency. Those economies that achieve the
highest level of broadband penetration will be the first to
create the new efficient services that will take advantage of
these high capacity networks and will have an advantage in the
long run.
Observation number three, widespread access to broadband is
a proxy for other types of investments in the economy. Part of
the mandate of government is to foster conditions that will
contribute to a strong and vibrant economy.
During the economic downturn, much of the focus has been on
stabilizing components of the economy whose failure would have
had catastrophic consequences. Substantial resources have also
been devoted to creating economic stimulus through various
fiscal and monetary policies, including direct investment in
key industries, and in many cases directly in specific
companies.
Unlike other types of investment, renewed commitment to and
investment in broadband is more like lowering interest rates.
It is meaningful to all players and simply accelerates the
timeline toward greater efficiency and innovation.
Observation number four, widespread access to broadband is
a driver in open, participatory government, as the President
has envisioned. In connection with its economic contribution,
widespread access to broadband will put entire communities and
individuals on more even ground, not just in their ability to
gain access to information but also in their ability to
contribute and innovate in unexpected, creative ways.
Government 2.0 is an emerging current example of how when
coupled with the right political leadership, the investments we
have made in technology can break down socioeconomic barriers
and involve our democracy into one that is more transparent,
collaborative, and participatory.
Government 2.0 is a recognition that in many cases today's
problems are too complex to solve alone, either as legislators,
administrators of government agencies, ordinary citizens or
private companies. We need to create the attitudes and
technological vehicles that will facilitate contributions from
experts and knowledgeable individuals to get to the best
answers.
Fortunately, many of these technology systems are being
established, but they are limited in their reach and could be
vastly improved and accelerated with a more expansive
deployment of broadband.
As it has always done, the American economy needs to push
through a continuous cycle of create, destroy, and repeat
innovation to remain competitive. Among other technologies,
broadband will be a driver.
Thank you.
[The statement of Mr. Whisenant is included in the
appendix.]
Chairwoman Velazquez. Thank you.
Our next witness is Mr. Tom McDonald, the CEO of BeSafe
Technologies, a company located in Hyannis, Massachusetts.
BeSafe Technologies is a small business that has developed an
emergency response tool that assists first responders.
Welcome.
Mr. McDonald. Chairman Velazquez and Ranking Member Graves,
Committee members, thank you very much for the opportunity to
speak with you today.
STATEMENT OF TOM McDONALD, CEO, BeSAFE
Mr. McDonald. I am the CEO of BeSafe Technologies. And our
corporate headquarters is on Cape Cod. That is because I want
to keep my feet in the sand.
Our focus is clearly and has been on public safety. As a
matter of fact, our company was founded by the Associate
Commissioner for Public Safety from the Commonwealth of
Massachusetts back in the '90s. And I joined with him. I was
the Superintendent of Schools in the Town of Barnstable on the
Cape.
And having witnessed the tragedy of Columbine, we found
that there was a tremendous need for more and vital
information, not so much the communication, which has been
filled rather effectively. We found that there was a lack of
vital information available instantly to first responders in
the event of an emergency within a facility.
And, with that in mind, BeSafe Technologies was created and
has been fostered and has grown as a result of working through
broadband. And the availability of broadband to the first
responder community is critically important, not only to the
success of our small business but obviously to access for first
responder communities throughout the United States.
Using broadband, first responders can access this vital
information on any building, any facility, getting aerial
shots, building blueprints, contact information, all the vital
information that may be necessary in those. As an example,
Columbine, you all witnessed that, as we did Virginia Tech.
Virginia Tech was over in nine minutes.
Recognizing that fact, we have to have a delivery system
that brings vital information quickly and is accessible to
first responders in a timely fashion. And in many cases, it
requires a great deal of bandwidth. Without broadband, BeSafe
Technologies would be very limited.
As a matter of fact, before we saw the expansion of
broadband really taking effect and continuing to take effect
across the country, we were a CD-ROM, paper-driven company. No
longer. We invested significant dollars into developing our
company and the accessibility to the Internet so that all first
responders can have immediate access if and when they need it,
also for preplanning and so forth, in the event of a bomb
threat, a hazardous materials spill, any kind of an emergency,
an earthquake, any emergency in places where large numbers of
people might congregate.
And we work with public and private institutions. We work
with colleges, corporate, and government facilities across the
country. And we provide all of the vital information. We work
very closely with SWAT team members, police chiefs, fire
chiefs, school departments, college administrators to make
certain that what information is needed is there when it is
needed.
We also do very effective training. We try to do as much as
we can in person. There is nothing better than a face-to-face
meeting, where you can look somebody in the eye and talk to
them effectively and train them.
But I can tell you this. It's a large country. And what we
are able to do through the use of broadband is train and
effectively train first responders, thanks to the exposure of
broadband across the country. That is something that we would
hope continues to expand exponentially going forward in the
future.
In addition to that, we train hazmat teams, police teams.
We do document management, all of these types of things that
wouldn't be possible without this.
And it really was the convergence of BeSafe and America's
robust, high-speed broadband networks that make this all
possible. Ten, 20 years ago what we are doing today wouldn't be
possible. Therefore, I can't stress enough how important the
expansion of broadband is to our business and other businesses
throughout the country.
We look to continue to invest in bringing our technology to
the general public, to private and public entities, and
continue to work as a small business. And our survival is
really dependent on the continuing implementation of broadband.
So, with that in mind--and I would speak to the fact that
my first career, while it was in education, I'm talking and
speaking to you today from Main Street of little America and
asking that you do whatever you can to continue and support the
growth of broadband in America.
And I would ask you to carefully consider any burdens to
small business. We are working extremely hard every day to
improve the companies that we own and the lives of the people
that we serve. And I would ask the members and thank you for
listening to us, the people on the front lines, and hope for
improved coordination and renewed growth in small business.
[The statement of Mr. McDonald is included in the
appendix.]
Chairwoman Velazquez. Thank you, Mr. McDonald.
And now the Chair recognizes Mr. Minnick for the purpose of
introducing our next witness.
Mr. Minnick. Thank you, Madam Chair.
I appreciate the opportunity to be able to come before this
Committee today to introduce a remarkable young woman, who is
from my district, Ms. Lindsay Dofelmier.
As the former CEO of two Idaho-headquartered businesses, I
am proud to present Lindsay as a tremendous example of
entrepreneurship and small business leadership in my home
state. Her resume reads like a promising case study of what
people who are smart, technologically advanced can do utilizing
the latest broadband technology to create new business
opportunity and more efficiency in the market.
In her current capacity, Lindsay is the CEO of Urban Agent
Team, a successful high-tech real estate brokerage firm
headquartered in Boise, Idaho. As her testimony today will
highlight, Lindsay has utilized broadband technology to
establish her real estate companies and fuel her business,
which has now grown into a three-state operation, operating
also in our adjoining States of Oregon and Washington.
I think her story is a remarkable example of what a
generation younger than you and I and technically savvy can do
with this new emerging technology to create new jobs and
opportunity any place in America. New businesses depend upon
broadband technology and other new innovations that simply
break the model for how business is traditionally done.
So I am very pleased to be able to introduce Lindsay to the
Committee. I will warn you she speaks Japanese, but I suggested
today it might be better to testify in English. I am proud to
present Lindsay.
STATEMENT OF LINDSAY DOFELMIER, CO-OWNER, URBAN AGENT TEAM LLC
Ms. Dofelmier. Good afternoon. Chairwoman Velazquez,
Ranking Member Graves, members of the Committee, as
Representative Minnick said, my name is Lindsay Dofelmier. And
I appreciate your invitation to testify today on behalf of my
company: Urban Agent Team.
Representative Minnick, I would also like to thank you very
much for taking time out of your busy schedule to introduce me
to the Committee. I follow your career, and I appreciate all of
your efforts on behalf of small business in Idaho.
As Representative Minnick said, my company, Urban Agent
Team, began in Idaho. It began when I learned that the average
relator was a 51 year-old female. I had a hunch that the echo-
boomer demographic was under-served and under-represented in
the real estate industry. As a result, I began targeting this
demographic.
Echo boomers, also known as Gen Y, Millennials, or the Net
Generation, are the children of baby boomers. There are
approximately 80 million of us between 15 and 33 years old,
making us second in size only to the baby boomers and by some
estimations larger.
We are a well-informed media and tech-savvy generation that
grew up with computers and the Internet, both at home and in
school. Thanks to the Internet, the world has been at our
fingertips for most, if not all, of our lives.
With vast amounts of information only a click away, we are
well-versed in technology, culturally literate, informed on
world affairs, and poised to revolutionize the economy.
Urban Agent Team speaks to this demographic. We are a
company of Millennials, for Millennials, and by Millennials.
With offices in Boise, Seattle, and Portland and frequent
travel among these cities, constant connectivity to wireless or
mobile service is absolutely essential.
Access to the Internet is our business. Without the
existence of broadband and social media, Urban Agent Team would
not exist. With agents throughout the Northwest, the ability to
collaborate and communicate instantly and effectively is the
foundation for our business. In order to do this, we use a
variety of Internet-based, cloud-computing programs daily. We
manage our company domain and meet our IT needs with Google
Apps.
With access to online e-mail, documents, and the ability to
manage and view one another's calendars, we are freed from the
constraints of hard drive-based applications and can
collaborate virtually.
We have our weekly team meetings via Skype, use Dropbox for
online file storage, send and receive files via Sendspace,
manage our cash flow with Google Docs, and run our finances
with Quickbooks Online. With Google Alerts, I know whenever
someone anywhere in the world uses our company name or one of
our agents' names in an article or post on the Internet. With
the click of a button on our iPhones or laptops, we can access
any contract, one another's calendars, or chat from any
wireless access point.
The use of technology in our business is not limited to the
back end, however. A majority of the online tools we use are
aimed at our clients. With the versatility and mobility of the
HP Mini, our customers are only a click away, even on the road.
We use a variety of other programs, such as YouTube, Google
Maps, IDX Broker, and MailChimp, to communicate with and
advertise for our clients. We depend on the Internet and
connectivity for day-to-day operations.
Due to the instant gratification of the Internet, today's
highly connected consumer demands an immediate response. In
order to provide better service than our competitors, we must
oblige.
Our clients can e-mail, text, or use social media to
contact us during traditional post-work hours. Our ability to
quickly respond to such requests increases our conversion rates
and overall customer satisfaction.
In an era of information overload, we have captured and
held our client's attention by recognizing and exploiting an
under-served niche market. Rather than trying to be everything
to everyone, we have specialized our business strategy.
Our approach to how we present ourselves and how we have
positioned our brand is unorthodox and embodied by our motto,
``We're not your parents' real estate company.''
We don't span the digital divide, as our clientele tend to
be young, tech-savvy, educated, and diverse. As such, they
connect with our honest, straightforward brand.
Through the use of a variety of social media platforms, we
have been able to build our brand identity, capture new leads,
make friends in new markets, keep our followers up-to-date on
our whereabouts, and maintain strong relationships with people
we see infrequently. With social media, we can connect with
like-minded individuals in other cities, states, and even
countries.
Twitter has been the bread and butter of our growth. Since
joining Twitter two years ago, we have amassed a following of
4,500 users, most of whom we did not know prior to Twitter and
many of whom we have yet to meet. In 2010 alone, we have gained
12 clients as a result of Twitter. The best part is the bulk of
these programs are open-source and free.
As a small business founded during the recession, watching
the bottom line with hawkish eyes has been key to our survival.
We are a virtual company with no brick-and-mortar offices. The
Internet has allowed us, instead, to create our office online,
thereby saving us tens of thousands of dollars a year.
Our online presence functions as a storefront, business
center, and property search. In addition to office rent
savings, the Internet has allowed us to cut our costs with
access to a multitude of free tools, by consolidating positions
and allowing for virtual assistance. As a result, we can grow
regionally without the traditional costs associated with such
expansion.
Instead of investing in offices, redundant support staff,
hardware, and software, we have invested in growth. The
monetary savings the Internet has provided us has fueled such,
allowing us to successfully compete with much larger and more
traditionally managed companies within our industry.
I can confidently say that the success that we have
achieved is a direct result of our ability to access broadband.
This is why the National Broadband Plan and digital literacy
efforts aimed at small businesses are causes that I feel
passionately about.
A generation of tech-savvy entrepreneurs with broadband
access will fuel job creation and economic growth. The Internet
puts knowledge in the hands of the user. And we all know that
knowledge is power: power to learn, power to think, and power
to create.
The goals of the National Broadband Plan summarized as
access, speed, affordability and clean energy are laudable
goals that every American should embrace.
The fact that we as a nation are already trailing other
countries in this arena is of great concern to me for the
future of our economy. I truly believe that without the
Internet, the potential for small businesses to successfully
grow to medium and large businesses would be far more
difficult.
On behalf of myself and everyone at the Urban Agent Team, I
thank you again for your time.
[The statement of Ms. Dofelmier is included in the
appendix.]
Chairwoman Velazquez. Thank you.
If I may, I would like to address my first question to
Messes. Burfield and Whisenant. The National Broadband Plan
outlines recommendations on how the federal government can
utilize broadband. It seems to us that it will require a
public-private partnership. Can you talk to us about the role
that small businesses will play in ensuring governments harness
the power of broadband?
Mr. Burfield. Thank you, Chairwoman.
I mean, I think, as I laid out in my initial testimony and
as Mr. Whisenant addressed, you know, the power of broadband to
impact the way that government operates, a Government 2.0
revolution, if you will, that allows the representatives in
this room to connect in a much more direct and meaningful way
to citizens allows citizens to connect to the actual data and
underlying information that tells them what their government is
actually doing, you know, I believe that is critically
important to our government, to democracy in this country. And
I think it is driven by cheap, pervasive, affordable access to
broadband, wherever you happen to be in this country.
In terms of the roles of small business in driving this
Government 2.0 revolution, I believe it is very, very critical
that there is an open playing field for small businesses to
access and drive this kind of innovation.
You know, there is a natural tendency for large, entrenched
businesses to want to shape the playing field in a way that
dictates disruptive innovation on their timeline and on their
terms.
You know, broadband affords access for small businesses to
come in and drive innovation and government at a much more
rapid pace and in a much more meaningful way. And I think that
any policies that support making that access as open as
possible to small businesses is going to be good for citizens,
good for small businesses, and good for our economy and
democracy.
Chairwoman Velazquez. Do you see any barriers preventing
small businesses from getting contracts in this arena?
Mr. Burfield. Well, obviously from my perspective, we were
able to win a pretty meaningful and substantial contract to
implement, for example, Recovery.gov. You know, with that said,
the way that contracting with the government is often set up, a
lot of those opportunities don't end up becoming available for
full and open competition.
Recovery.gov was a situation where Congress had dictated
that the platform had to be implemented very quickly with some
very aggressive requirements. And the administration felt that
they needed to go out and find the most innovative, best
companies out there possible. And it was, in fact, an open
competition. We had one week to respond to it.
That is not always the case. A lot of these systems are
ending up going to the entrenched incumbent contractors, which
are often large businesses that have little incentive to offer
the kind of highly innovative approaches that we provided with
Recovery.gov.
Chairwoman Velazquez. Mr. Whisenant?
Mr. Whisenant. Yes. Thank you.
Chairwoman Velazquez. Thank you.
Mr. Whisenant. I think we could use some overhaul. I feel
as a small business distinctly disadvantaged in the purchasing
process, actually, because it is so burdensome. And I don't
think it is necessary as much as it probably used to be.
On the open government, making sure that government is
using it, I think the technology is going to invite people to
organize better and more innovation to come out of that. And I
think it is really a question of political leadership more than
it is of technical capability.
I think the administration certainly has been pushing for
government to leverage these networks and to use broadband and
other technologies in innovative ways. I think there is an
opportunity for legislative leadership as well. And there is
plenty of ground to cover that would benefit both government
and small business.
Chairwoman Velazquez. Thank you.
Mr. Messere, last week the FCC announced a new framework to
preserve an open Internet. In your opinion, what would the
preservation of an open Internet mean for the growth of the
green technology start-ups that you work with?
Mr. Messere. Thank you very much for the question. And it
is an interesting one. The framework itself represents a
difference, I guess, in understanding about what the FCC can
regulate. That specifically opens up the doors for a change.
And so it will be interesting to see how that will work.
The Internet essentially is two parts. And from our
perspective, there is the ability to communicate over the
Internet, which is the connection, if you will, and then there
is the content. And so these two things are partly a part of
that challenge.
From our perspective, the most important thing is the
ability to have connective connections, if you will, between
any one of our offices, between any one of our employees. And
this supplies globally So from our perspective, that is the
most important thing.
To make it really simple, if you look at each one of our
employees as a virtual point of access on the 'net, each one of
those has a broadband provider. And each one of those providers
generally provides a similar platform. But if they don't, if
it's unique and if there are uniquely different things that
don't share commonality between them, it means that essentially
we would no longer be able to use some of the tools we use.
So imagine if we couldn't use Skype, which is a
telecommunications technology that acts like a phone. It is
vitally important for some of our members to be able to use
Skype to communicate. And if their broadband provider were
limiting those functions, that would be a problem.
So our greatest interest is in maintaining and having
access to a common set of connectivity. And the content itself
isn't meant to be part of that challenge, but I can understand
how the FCC is facing that.
Chairwoman Velazquez. Thank you.
Mr. McDonald, I represent New York. Coming from New York, I
am very much concerned about improving emergency communication
with our first responders. You spoke about that and the
services that you provide through your company.
And so, as we know, first responders have traditionally
relied on paper blueprints--
Mr. McDonald. Yes.
Chairwoman Velazquez. --to navigate a building. You say how
important it is to move this information to the Internet. And
we all know that it really enhances public safety.
My concern or my question is, how do you balance this
benefit with ensuring that what is web-based data is kept safe
and secure?
Mr. McDonald. Excellent question and one that we face every
day. Let me start by saying yes, we do rely heavily on the
Internet and access for that for a variety of reasons, which I
will speak to in a moment.
First of all, let's be clear. I know students who have been
able to crack almost into the Pentagon. So I am not going to
tell you that they can't get into almost anything. Having said
that, we put countless amount of time and energy and resources
into ensuring the security of our system.
And the other thing, based on the way we have set up our
network and accessibility is obviously there is extremely
redundancy to what we do. It's backed up. It's supported. It's
password-protected and so forth. And there are firewalls and
other kinds of safety systems built into what we do.
I also will tell you that most police departments still do
rely on paper and CD-ROM. The fact of the matter is we provide
it in paper and CD-ROM. But as soon as you publish a paper
product that is in the hands of a first responder and the
person who is managing that facility's cell phone number
changes, that information is now outdated.
And that lack of clarity in the information you have in
front of you could be the difference in responding effectively
or not. And so, like everything in life, you need a balance.
And here you need a balance of the three, you know, low-tech,
mid-tech, and high-tech.
Broadband brings the high-tech capability to what we do.
It's vitally important because what happens now is if your cell
phone number changes, that is updated immediately. And the
system already immediately generates an e-mail to all people in
the system who have access, keeping them posted on any changes.
So vital information, timely information is important.
Chairwoman Velazquez. Thank you.
Mr. Graves? Thank you.
Mr. Graves. Thank you, Madam Chair.
I want to talk about rural areas. And in terms of you might
each speak to this and how it relates to your business, if it
is not applicable, just say so, but what barriers have you seen
in accessing customers in rural areas or expanding into rural
areas? And what barriers are out there? What barriers are still
out there or you have seen in the past?
And also I am very curious to know if you think that is a
growth area. Some folks would believe that moving modern
technology or expanding broadband into rural areas is a waste
of time and money, but I would be very curious.
Mr. Burfield. You know, it is interesting. The lead of our
visual design community, considered one of the foremost experts
in the world on designing user experiences on Microsoft
technology, actually lives in Laurens, South Carolina. And
having gone down there and had dinner with her a few times, it
is about as rural as you are going to get in South Carolina.
She is able to access our team in Washington--we have
resources in Taiwan, we have resources in India--nearly
seamlessly because she does have access to broadband
technology. She is on, as we have mentioned a number of times,
Skype continuously video conferencing with a distributed team
around the world.
You know, I am not sure she would joined Synteractive if it
meant leaving Laurens, South Carolina. The ability to have the
kind of quality of life, the kind of community that is
important to her, while still having access to a global team
and working on global problems was highly meaningful to her.
And it was highly meaningful to Synteractive.
You know, that is not always the case. I have certainly in
my travels been in any number of places where you can't get
that same kind of access in rural America. And I think in order
to continue to drive those kinds of economic opportunities, in
order to continue to drive those kinds of employment
opportunities, we do need to ensure that rural America has full
access to broadband, preferably wirelessly.
Mr. Graves. Mr. Messere?
Mr. Messere. Yes. I would agree consistently with what has
been put out there on this subject, which is that from our
perspective, from our company's perspective, we have hired a
number of people who could only have gotten access to our
company with broadband in places that are quite remote as well
also.
I have a couple of employees in North Carolina. I have had
employees in Texas. I have had employees in Nevada. So I have
had employees that are in many places that are quite a bit far
away from the central core center of business, where their
ability to be able to work for us is completely enabled by the
broadband access that they had.
What our biggest concern and what has been a problem for us
is when that broadband isn't strong enough and sometimes that
is the case, we can't use some of the tools like Skype. Skype
depends on some kind of strength of access, if you will. And
when it's a little bit below that, it starts to fail, which
anyone who has been on a bad cell phone call knows what that is
like. So we try and avoid those kinds of things, but that is
our biggest concern in order to use some of these technologies.
As I said in our opening statements, my biggest concern is
that is what we know of today. In five years' time, those
technologies will continue to push forward. And we are really
wanting to be able to make sure that all of our employees can
stay with us.
I can't imagine the heartbreaking conversation of having to
lose an employee because they could no longer keep up with the
technology. That would be a great and grave concern for us.
Mr. Graves. Mr. Whisenant?
Mr. Whisenant. In my circumstance, I don't know if there is
a huge effect in the rural communities except that I think that
if there is a gap, it is just going to get worse.
One of the interesting thing about broadband and if there
is a renewed investment in broadband is it will enable services
that we can't even imagine. We can certainly think of common
ones and obvious ones, like telepresence, remote medicine.
These are services that if you have access to broadband,
you will benefit from that. And I think rural areas will be
increasingly disadvantaged and cut off from those educational
and even, you know, telemedicine, those types of services that
will grow and flourish over time.
Mr. McDonald. Well, my sense is that broadband is
expanding. First of all, it is vitally necessary in rural
America. Take, for example, the incident that happened in Amish
country. I mean, there are many rural spaces where information
is vitally important.
Bad things don't just happen in big cities, although they
do happen in big cities. And so we need that access everywhere.
But it is my belief and, from what I have read, that broadband
is continuing to expand and is investing. There is significant
investment going in every year to enhancing this implementation
across the country as not only accessibility but also
increasing speed of access, you know, the speed of an error.
Those two things are very important to us as a company. And
so I am heartened by the fact that I see broadband continuing
to grow, continuing to be more accessible. We are not there
yet, I don't think, but I am heartened by that. And I think
that down the road if we continue on the plane that we are
going, that we will arrive to where we need to go.
And I would just caution that it is important that all of
us in small business need to know the rules of the game moving
forward, how things are going to work, what access people are
going to have.
When we go to put--and I will finish. Probably the limiting
factor for us in rural areas is that police cruisers and so
forth may not have laptop computers in their vehicles, may not
have the connectivity there. That is something where I see
necessary investment going forward.
Mr. Graves. Ms. Dofelmier?
Ms. Dofelmier. As a Westerner, this is something that is
particularly important to me for two reasons. One, I grew up in
the West. And, as you well can imagine, we have a lot of space
out there, a lot of rural areas.
Most of us that live in the cities in the West, we choose
to live there for a lifestyle. So we like to go out and camp
and fish and hunt and whatever it is that we all do. And
telecommuting is essential to our businesses. So often, even if
we do live in the cities in the West, we need to have access to
our businesses when we are having our leisure time as well.
Additionally, when I grew up in a small town in rural Utah,
we were definitely at a disadvantage with the Internet. Only
recently did my dad actually even have access to it. He had to
get a satellite Internet at his home. So whenever I would go
home to visit my family, I was effectively cut off from my
business. And that is often how it is whenever I go on vacation
or spend leisure time.
So I think it is absolutely essential to Westerners,
perhaps even more than in other areas of the country where
there is greater connectivity.
Mr. Burfield. Madam Chair?
Chairwoman Velazquez. Mr. Altmire?
Mr. Altmire. Thank you, Madam Chair.
Mr. Messere, this is directed at you. Just for way of
background, I am very interested in the export component of
this. As you know, the U.S. Commercial Service was created
specifically to help U.S. companies find international business
partners in the worldwide marketplace. And one such example is
in my district.
I am familiar with Intake Process Group, which is a small
business that designs web-based systems, controls for use in
manufacturing. And it supports many larger customers, corporate
folks that a lot of folks would know the names. And in western
Pennsylvania, the U.S. Commercial Service has established an
office to help companies such as Intake succeed.
My question for you is, the administration, of course, has
set this five-year goal to double U.S. exports. And I was
wondering if you could discuss how technologies developed
specifically by small U.S. firms can more effectively reach the
global marketplace.
Mr. Messere. Well, thank you. That is part of what our
business is about. So it is sort of an opportune ability for us
to address that specifically.
Reaching out to international opportunities is really
dependent on the most important part of their go-to-market
strategy, which is what differentiates their product or
service. And in what we are really seeing, especially in our
area which I focus on sustainability, which is a lot about
renewable energy and waste optimization, those types of things
are--they have a global audience of possibilities in the
market, but they have to be differentiated. And so what we have
to do if we are going to help them is learn how to get that
differentiation to be told.
I think we have talked about some of the technologies right
here at this table today. Certainly a website, as you know, is
now a must-have for every business. In addition to that, we are
starting to see a lot of technology along the areas of things
like Twitter.
Our company alone has over 7,000 people following us. And
we have put very little effort into anything more than hanging
a shingle up for that. And that has a global audience.
As a result of that--and this is sort of getting to your
point--in our example, we not only use Twitter, but Twitter
actually points people back to our website, which then feeds an
international audience of participants. On any given day,
almost 60 percent of the people who visit our website are from
offshore. So that is part of the solution.
So it is telling a story; differentiating using the tools;
and then, lastly, it is using those tools now to get to a
market opportunity. And a company like ourselves, that is what
we specialize in.
So we use the broadband technologies now to connect
directly to companies and services in foreign markets. So as we
are working today, I am now setting up a New Zealand office
that will allow us to have a beachhead in New Zealand,
Australia, which will eventually get us Singapore, Hong Kong,
et cetera. That is all, again, because of broadband technology.
Mr. Altmire. Thank you.
I wanted to switch subjects and talk to Ms. Dofelmier for a
moment. You talked a lot about access to the Internet and how
important broadband is. I wondered if you could talk about the
fact that many small businesses report that the cost of
broadband is a roadblock to the adoption of it. And I was
wondering how the cost of broadband affects your business, in
particular, and what advice you would have for us to help make
it more cost-effective for small businesses.
Ms. Dofelmier. Well, as was mentioned earlier, I mean, I
think that having an equal playing field in terms of
accessibility and speeds is really essential to small
businesses because as a cost of service, as it exists now, you
know, we are penalized if we don't have deep pocketbooks and we
can't afford a fiber optic line. So if something goes down on
the network or if our speeds are slow, we are crippled as we go
along or we have to go to a coffee shop or try to find another
network, particularly in our business, where we are always on
the road and we are not always at our office or at our home
with our speeds at home.
So I think that, really, it is essential as more and more
people choose to, particularly in the Millennial generation,
work for themselves or choose to telecommute for the lifestyle,
that having access anywhere and having equal speeds of service
is just really--without that is a severe disadvantage to our
businesses.
Mr. Altmire. No further questions.
Chairwoman Velazquez. Ms. Dahlkemper?
Ms. Dahlkemper. Thank you, Madam Chair. Thank you to our
witnesses here today for your testimony.
I am actually from just a little north of Mr. Altmire, in
northwestern Pennsylvania, very rural area except for basically
the town I am from, Erie. And so throughout those counties,
Erie County, Warren County, Crawford County, we have several
small telecommunications companies that have strategies to
deploy broadband in these rural, under-served areas of my
district.
As you all testified, you know how important it is to have
access to those businesses. Unfortunately, many of these small
broadband companies are not able to access capital. And they
are as fully leveraged as possible. They applied for some of
the recovery funds, and they didn't receive any.
So I want to know if you have any suggestions for these
small companies like those in my district. They are having
trouble accessing that traditional capital and also are not big
enough to compete for some of these government loans that are
out there.
I don't know who would like to answer that question. Anyone
have a thought on that?
Mr. McDonald. If I had all the answers to that, I would
probably be sitting in Hawaii doing this over the Internet. But
the fact of the matter is capital is restricted today. There
are challenges to that.
But having said that, I think you simply--you know, you
have to start small. And you just have to grow in steps. You
have to take steps. And so perhaps you can't get a million
dollars or two million dollars, but maybe there are ways to
bring in private investment.
You know, my experience is having experiences myself, if
you have a good idea, there are angel investors. There are
other investors out there who will be willing to take a risk
and work with you.
It comes down to having the right idea, the right place,
the right implementation. And I think anyone is doable. And so
I wouldn't simply want to rely--although I am not opposed to
government loans, loans are not my favorite thing because with
that comes the repayment. And, you know, as a result of that,
my take is I would rather bring investment in from the private
sector to help us grow if and when the time is right.
And so I think if I were to advise them, I would say put
together your business plan and go out there and look for some
private investors to help you with that so you can grow because
there is no question in areas of Pennsylvania as well as
elsewhere that access to broadband by the rural communities is
extremely limited and extremely important.
Ms. Dahlkemper. Mr. Messere?
Mr. Messere. Yes. Actually, I will jump in as well. I mean,
again, sort of what our business is about is helping companies
get to market and figure out where they can grow their sales
revenue.
I think in this case, it comes down to a matter of mapping
out the potential. So if they are looking at a market in a very
specific place, they really have to have a good idea of how
many people would purchase the service, at what price point is
it cost-effective and, most importantly, competitive. Are there
alternatives to that solution?
As was pointed out, there are technologies that include
satellite technologies. So those are kind of the fundamentals
to start them off on that. And I might also recommend if they
have a higher education institution that you can access when in
your district or close to your district, maybe working with
some of the folks there and getting them together to have them
work through this idea of how do you write a business plan, how
do you learn how to figure out how many clients are there in
this business because it has to be cost-effective.
And one of our roles in doing sustainability is always
about that profitability drives the issue of innovation.
Ms. Dahlkemper. Mr. Burfield?
Mr. Burfield. I would also think that in situations like
that, perhaps not focusing on traditional broadband but
focusing on wireless broadband is a key innovation.
I have also been pleasantly surprised by where you are able
to get broadband access in America, but I have been absolutely
stunned by the quality and access of wireless broadband in
other parts of the world.
My wife and I were in India late last year. And she had
intentionally found the backwaters of southern India to be the
farthest possible place so that she wouldn't have to deal with
my iPhone anymore. And we were on a boat. And you couldn't see
anything but rice paddies as far as the eye could see.
And then my iPhone went off. And I ended up being able to
download a series of documents at pretty amazing speeds from my
iPhone to my computer to solve the problem. And I could not see
a human, again, as far as the eye could see.
If you can make it profitable to do that in the rice
paddies of India, my sense is there is a business model,
although it might not look traditionally like digging channels
and laying broadband fiber optics, that can be profitable in
Pennsylvania.
Ms. Dahlkemper. Thank you. Thank you all. I yield back.
Chairwoman Velazquez. Okay. I do have another question
before we adjourn. I hear every one of the witnesses saying how
important broadband is for small businesses to grow their
businesses.
However, we all know that small businesses not only face
the economic constraints that they are facing to develop a
presence online. So how would you advise small business seeking
to harness broadband to grow their business? And what role
should Congress and the FCC play in promoting broadband
adoption by small firms? And I will start with Ms. Dofelmier,
if you can.
Ms. Dofelmier. Absolutely, Madam Chair. I think that,
really, what is essential is education. I know that Congress is
working on that right now with digital literacy efforts aimed
at small businesses.
I think, particularly in minority and under-represented
communities, that that is something that is going to be very
important in promoting the adoption of broadband. Really, it
is, even when we have new members that join our team, a lot of
times their eyes get big, even if they're in their early 20s,
and they just say, ``How do I use all of these tools? How can I
use them to build my business within your company?''
And so we have to sit down with them and just coach them
through it. And as soon as they realize the potential, they are
off and running. And I think it really just centers around
education. And it doesn't matter your age or your background.
It just takes a little bit of coaching and some effort. And
there are so many tools out there to help you grow your
business.
You just have to Google. If you need something free, like a
free, open source software program, because you're strapped
financially, you just have to know what to look for and you can
find it.
Chairwoman Velazquez. Any other of the witnesses want to
comment? Yes?
Mr. McDonald. Just a quick comment. I would urge Congress
to think through carefully what it is going to do. I would
suggest--and I have seen too often, not just in Congress but
everywhere. We don't want today's solutions to cause tomorrow's
problems.
I think that broadband is expanding. And I think that I
would just urge that we make it, as I said earlier, that the
rules of the road are clear and there is not confusion over the
next few years, which I think could stifle, has the potential
to stifle, what is an opportunity to expand this successfully
in a partnership that will work.
Chairwoman Velazquez. Yes, Mr. Messere?
Mr. Messere. Also continuing on that exact same point, as
it relays both in small businesses starting their process and
in companies that have established their process, absolutely
correct. We plan for the future based on what we know today.
And if we build a business and the profitability of that
business around expectations of access to broadband and that
isn't going to be the case in the future, it could be very,
very difficult. And it can end a good entrepreneurial run.
Chairwoman Velazquez. Mr. Burfield?
Mr. Burfield. Yes. I mean, to echo two key themes, we have
used the phrase I think throughout this that ``Broadband is
like the national highway system'' or ``Broadband is like the
electrical grid.'' And in many ways, particularly when you move
outside of major metropolitan areas, it is kind of a natural
monopoly.
As an economist, there is often a critical role for
government to play in facilitating the creation of those
situations. But there is a tremendous risk for unintended
consequences around technologies that will be used on broadband
that haven't even been imagined yet. I think, as government
explores the right role to play, caution is important.
And then I think going back to the second theme, you know,
education is a tremendous part of this. For capital-constrained
small businesses, part of the answer is not to focus so much on
capital. It is to focus on what can you do with the capital
that you have using the free tools that are out there.
But there is absolutely a digital divide that is growing
between people who understand how to pull together hand weave
together these incredibly powerful, inexpensive solutions and
those people who don't. Any sort of effort in terms of
improving that kind of education and how to use these tools I
think would be critical for our economy.
Chairwoman Velazquez. Thank you all. This has been quite an
interesting discussion. And, for this Committee, it is an
important one. If we want to provide the tools for small
businesses to continue to grow, this is key. So I thank you
all.
I ask unanimous consent that members will have five days to
submit a statement and supporting materials for the record.
Without objection, so ordered.
This hearing is now adjourned. Thank you.
[Whereupon, at 2:11 p.m., the foregoing matter was
concluded.]
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