06/07/2013 11:45 am ET Updated Aug 05, 2013

Cities Failing to Meet Innovation Age Challenge

The U.S.-based Information Technology and Innovation Foundation (ITLF) published its seminal report "Digital Prosperity" warning that:

"In the new global economy information and communications technology (IT) is the major driver, not just of improved quality of life, but also of economic growth...Yet, most policymakers do not adequately appreciate this fundamental reality."

Sadly, most mayors and city councils don't either.

Yet, in the new economy it is these cities that are the new engines of growth and development that need the information infrastructures the most.

Admittedly, cities are still reeling over the pension crisis and related fiscal malaise. The established players--mostly the cable and Telco's-- have joined forces to routinely block any attempt any by a city to provide municipal Internet services. State legislators and other politicians have also told them the telecommunications business belongs to the private sector. And most cities -- already subsidized in some small way by a cable franchise or largesse of the local telephone monopoly-- are afraid to act or simply unaware of the stakes.

In every study of importance however, broadband Internet services are mentioned prominently. The argument that such infrastructures are the thing most of the nation's innovation today urgently needs is something that all the studies seem to agree on. Given the realignment of power in the world--from nations to cities to individuals--what the city does or does not do can determine their community's success and survival, or its demise. The world's map is being redrawn and there is likely to be lot of ghost towns littered along the new global information highway.

Some, but too few, more progressive cities are working with other nearby cities or their county to do joint governmental planning and development, and provide not only police, fire and safety services but land use, transportation and telecommunications systems as well. This clearly makes sense since people already live in one jurisdiction, work in other, and play or dine in a third. More importantly, the new creative economy demands consolidation to save money, and a repositioning of the larger region itself to succeed in the new global economy.

By reorganizing, as syndicated columnist Neil Peirce has pointed out, these new "city-states" as he calls them, "have a shared identification, function as a single zone for trade commerce and communication."

Broadband, or high speed Internet service is a ripe for such joint planning, and as important as waterways, railways and highways were in an earlier era. The cities within a region, the county, federal and state government agencies in the area, and for that matter all schools and hospitals, and non-profit agencies can build the new information infrastructures needed and ought to start today.

According the Brookings Institution in Washington D.C., "The Obama Administration hopes to reverse decades of neglect of our cities by stimulating economic prosperity in 'metropolitan regions' where ... the top 100 metropolitan areas covers about two thirds of the nation's population and an even larger share of the nation's gross domestic product."

It is these "regional economies" that foster quality places, vibrant downtowns, attractive town centers and historic, older suburbs that feed the development and acquisition of human capital, financial capital and contribute to resource efficient, sustainable growth.

Not merging municipalities or at least jointly providing basic services, starting with broadband, puts the prowess of a region at risk. Perhaps partnering with an existing provider makes sense. Cities don't necessarily have an entity, say a eclectic utility that might be prefect to provide Internet service too--and over the same wires--but this should not deter them. They still have a public service responsibility, own the rights of way and are in a position to both use the system for delivery of enhanced government services, as well as provide voice, video and data service to the community.

The Swedish example, which seems the least intrusive way of maintaining some semblance of control, is an option. Through a wholly owned entity called Stokab, the region provides a fiber optic communication network within the Stockholm region, digging the ditches, laying the fiber or cable and selling--to whoever wants it--fiber or bandwidth on demand. This approach, according to a recent report, called "Stockholm's Stokab: A Blueprint for Ubiquitous Fiber Connectivity," has generated significant positive benefits-- about 15 billion kronor ($2.3 billion-- to the local economy.

The report concluded:

"Stokab is seen as a model of municipal fiber deployment inasmuch as it was built with virtually no public subsidies, has led to competition in the delivery of telecom services in Stockholm, has driven adoption of superfast broadband services in the city and has helped the City administration reap significant benefits."

Stokab is owned by the City of Stockholm. Other cities across America, indeed the world, can emulate Sweden's model.