Cisco announced our quarterly earnings this week, and what I was drawn to is the fact that sales outside of the U.S. now account for 54% of all our company’s sales (that’s up from 52% a short time ago). What’s the Big Deal, you ask? Well, despite stiff competition from Asia, Europe and elsewhere, as well as ambivalence among some U.S. policymakers about how to help make U.S.-based companies more competitive, Cisco is selling to more customers outside the world’s largest economy than inside of it.
Selling abroad is a pretty tough endeavor, as there are so many ways that local firms have a leg-up. But, there are rules-of-the-road, which most governments agree to, that allow U.S. products and services to be treated fairly in foreign markets. These rules are enshrined in the World Trade Organization, and in a number of free trade agreements that the U.S. Government has negotiated with other countries over the years.
There’s a new free trade agreement that the U.S. Government negotiated recently with six countries in Central America (Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua), and it’s running into opposition in Capitol Hill, where its implementing legislation needs to be passed before the agreement can take effect. Among other things, the agreement (CAFTA) would lower a number of tariff and non-tariff barriers in these countries, so U.S. companies could sell more products and provide more services to these markets.
The thing is, U.S. barriers to products and services coming in from these six countries are already extremely low, so the agreement would benefit both sides – in fact, I had the pleasure of hearing the Guatemalan Ambassador to the U.S. explain how he’d heard this story of a farmer in Costa Rica who learns the world market price of coffee beans from a mobile Internet kiosk that comes through his village every week. The farmer can log-on and know what the going-rate is for his coffee and not get taken advantage of in the local market. Pretty cool. So, making this stuff more accessible and affordable I think is a good thing – keeps us all connected (and honest).
I know, there are a lot of politics swirling about over this agreement, but I think this vote comes down to a fundamental decision: are we in or are we out?
Generally known for NASCAR, ACC basketball, banking, BBQ and tobacco, North Carolina can NOW be known for wireless broadband. At least Greene County, North Carolina can. Leave it to my home state to be cutting edge. : )
Greene County is in the eastern part of the state, about an hour east of Raleigh. Now, through a partnership with a technology company nearly all of the residents in the county can get wireless broadband for a relatively attractive price – $34.95. According to an article in the The Free Press of Kinston, North Carolina, the company involved in deploying the technology, Wavelength, “recently signed an exclusive two-year contract with Greene County to provide service. Investments made by the county are expected to be recouped in a few years thanks to a profit-sharing plan worked out between Wavelength and the County Board of Commissioners.”
Let’s see how this one plays out, but in rural and undersevered areas (parts of Greene county qualify as both) this method of deploying broadband could fill in some of the holes in the U.S. Good luck, Greene County!!
The full article can be viewed here.
So, my cable bill (Comcast) came the other day. I get basic cable service as well as broadband service. Cisco allows me to expense the cost of my cable broadband service. Pretty much all Cisco employees are allowed to expense their broadband at home. They understand (correctly) that if an employee works one hour a month at home, then the broadband pays for itself. I worked three hours at home just last night, so I think they’re getting a bargain.
Why doens’t the government pay for its workers’ broadband to extend the workday and make telecommuting a reality? Why don’t all Fortune 1000 companies pay for their workers’ broadband for the same reasons. If you want to talk about productivity increases, please talk to me or any of my colleagues…I actually find it EASIER to be able to access the network from home – clear the e-mail out in the evening, in the morning before driving to work, etc.
Anyway, any other companies or entities following the Cisco home broadband subsidy model? If not, why not?
Check out this interesting lead from an article today, “If the competitiveness of nations can be measured by their broadband subscriber rolls, then the United States is on the verge of losing its leadership to China.”
The article continues, “China already is rapidly approaching the United States as the country with the largest number of broadband subscribers, according to data from iSuppli Corp.'s newly-launched Broadband and Digital Home service. At the end of 2005, China is expected to have 34 million subscribers, compared to 39 million in the United States.”
Read the full article here : or by copying this URL: http://www.emsnow.com/npps/story.cfm?ID=11378
Again, why do we need a national broadband plan? You may have seen the news and previous blog on China and India partnering to compete directly for world leadership in IT…you may have seen a recent article in the Wall Street Journal on the “PhD” deficit in the US… the answers ARE out there, it's just a matter of execution and funding…and FOCUS!!
A couple of stats from the WSJ article to help us all on some of those who have found focus: “In China, R&D expenditures rose 350% between 1991 and 2001, and the number of science and engineering Ph.D.s soared 535%. In South Korea, R&D expenditures increased more modestly — by 220% — and Ph.D.s by 150%. In that same period, the number of applications for U.S. patents from each country grew by 400%. Publications in scientific journals provide another indicator of the global challenge to our scientific primacy. In 1986, the U.S. share of articles in such journals world-wide was 39%. By 2001 it had slipped to 31%, and it is still declining.”
I’m going to have to take a bit of the umbrage with a recent column by Johna Till Johnson in Network World. You can read the article by clicking here or by copying this URL: http://www.networkworld.com/columnists/2005/042505johnson.html?nl. The tone of the title of her column says it all, “Why do we need a national broadband policy?”
In supporting her opinion that we don’t need a national broadband policy, she states, “(a)s for TechNet’s argument that we’re holding back the economy: With all due respect to the nice folks in San Jose, what’s good for Cisco isn’t necessarily good for America.” She goes on to say, “sure lots of people want broadband access (who can't get it)…(b)ut that in and of itself isn’t a reason to subsidize it.” Methinks that she hasn’t thoroughly read anything TechNet or Cisco have said on broadband. Neither are calling for subsidization. Cisco has consistently said that the MARKET will take care of the vast majority of broadband deployment…and in some instances, companies might need little nudges to serve rural and underserved areas. That’s it.
Further, to think that Cisco is the one company that is going to benefit from the full deployment of “true” broadband is ridiculous. There are hundreds of companies that benefit from the deployment of broadband, too many to name and certainly not worth the effort. Further, on her statement “what’s good for Cisco is not necessarily good for America” – in this case, she’s just plain wrong. Sure, Cisco sells the boxes and software that make connections between computers – the dial-tone for broadband, if you will – and, yes, there will be some business benefit as more and more people move to broadband. However, with broadband comes better access to educational tools, better healthcare tools, better management tools – in a word, more productivity. Now, I’m not an economist, but last time I looked the government tracks productivity numbers fairly closely as an economic barometer. So, I guess I’m saying that the formula that debunks her logic would look something like “Cisco (and a lot of other companies and providers) = Broadband = Increased Productivity = Good for America.” I’m not sure what her formula looks like.
We need a national broadband policy because we need to send the message to suppliers and markets that broadband IS important to our country. Markets need certainty in order for investments to be made. A national broadband policy goes a long way to providing that certainty. To measure the US penetration by saying that broadband is 256K while other countries are in the 10 to 100mbps is just silly. Other countries have invested directly in broadband because they see it as a way to level the playing field for the 21st century…the US has a bit of a buffer because our economy is twice the size of the next largest economy, but regions and countries will use broadband to catch up and they know this. If we don’t have a policy to get affordable, true broadband deployed we could be leapfrogged by others. In the recent ITU report, we fell from 13th to 16th in the world in broadband penetration. Broadband is the platform that all new applications and services will run over in the future…voice…video…data…stuff you haven’t thought of. If other regions have better infrastructure in the future, they’re going to have better education, better healthcare, bigger productivity, etc. We have to have broadband to keep our economic edge and remain competitive in this new century.
I could go on, but I have to go take my buddy, Jim, to pick up his car from the shop. Let me know your thoughts on the issue of a national broadband plan. You can also let Johna Till Johnson know what you think of her thoughts – the commentary states that Johnson is president and chief research officer at Nemertes Research, an independent technology research firm. Reach her at firstname.lastname@example.org.