FCC's Genachowski: Broadband Development Good for U.S. Job Growth

“The sweeping economic changes ushered in by Facebook, Twitter, clouds, tablets, app stores and the Kindle are as profound as the invention of Guttenberg printing press”

“No infrastructure matters more for job creation and economic growth in the 21st century than broadband internet,” Federal Communications Commission Chairman Julius Genachowski said Tuesday at LivingSocial’s Washington, D.C., headquarters.

The sweeping cultural and economic changes ushered in by broadband are as profound as the invention of Guttenberg printing press, Genachowski said, pointing to Facebook, Twitter, clouds, tablets, app stores and the Kindle.

“Just five years ago, these things either didn’t exist or we’d never heard of them,” he said. “Now, it’s hard to imagine life without them.”

Importantly, he said, all are fundamentally American innovations, invented here and exported from here to the rest of the world.

Similarly, he pointed out that the U.S. “apps economy” — still in its relative infancy — is “the envy of the world,” and expected to generate $38 billion in sales by 2015, while cloud computing is raining down $60 billion annually in North America. And the U.S.
has the highest number of 3G subscribers in the world, and is leading the way in deploying 4G networks.

Underscoring the point, the chairman noted that Apple recently moved ahead of Exxon/Mobil as the nation’s most valuable company.

While the new “hyperconnected world” means some 20th century jobs may never return, Genachowski said studies show that broadband-related industries create 2.6 jobs for very one lost. He pointed to Facebook, which employs 2,600 people but has led to the creation of another 182,000 jobs.

And while eBay and Amazon employ 50,000 people, they provide a sales platform for up to 1 million entrepreneurs — not all, he added, in Silicon Valley.

Genachowski applauded LivingSocial’s growth, adding 150 to 200 new employees a month to its current stable of 4,000 worldwide. And LivingSocial’s product — providing deals and “experiences” at discounts — helps thousands of other small businesses grow.

But he said it was imperative the U.S. close broadband “gaps” in order to maintain its lead position.

He mentioned four such gaps.

He said a looming “spectrum crunch” was the single biggest threat to the burgeoning broadband economy, especially as smartphones and tablets require vastly more bandwidth. Genachowski hailed voluntary incentive auctions proposed in new legislation would allow broadcasters to free up spectrum for reallocation without affecting television service.

There is also a “deployment gap” currently leaving 100 million Americans without access to broadband, shutting them out of the cutting edge economy. In response, the FCC is eliminating unnecessary regulation while supporting initiatives such as the “dig once” concept to encourage broadband infrastructure expansion along with other utility work.

He pointed to a broadband “adoption gap.” While countries such as South Korea and Singapore enjoy broadband adoption rates upward of 90 percent, in the U.S. the rate is only 68 percent.

Finally, Genachowski said there existed a “skills gap” in the realm of basic digital literacy. In 12 large metropolitan areas there is a 1:1 ratio between unemployed people and job openings, but that the digital skills simply weren’t there.

Still, Genachowski expressed confidence that broadband technology would play a crucial role in curing the country’s economic woes. Quoting Apple founder Steve Jobs, Genachowski said Americans would “innovate our way out of our current predicament.”