GAO: Small businesses need faster broadband to compete

The GAO report found that small businesses are unable to handle advanced tasks, such as using accounting software, with their existing broadband connections.

Most small businesses have access to broadband but that broadband connection might not be fast enough to handle their needs. A new report from the U.S. Government Accountability Office (GAO) suggests that the FCC’s current broadband minimum benchmark speed of 25 Mbps for downstream traffic and 3 Mbps for upstream traffic is too slow for most small businesses and needs to be revised.

The GAO recommends that the FCC solicit input from stakeholders and do its own analysis of small business broadband needs and incorporate those results into its broadband speed benchmarks.

Further, the GAO suggests that the FCC take a closer look at volumes of data that small businesses are sending and receiving via their broadband connections. “Analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband,” the report says, noting that the existing speed benchmarks for broadband were set in 2015.

The GAO found that for the most part, small businesses do have broadband available and only about 8%, or 2 million to 3 million businesses, lack access to any broadband services at all.   

However, the government agency said that it reviewed annual reports and interviewed various stakeholders, including more than a dozen small businesses as well as broadband providers and trade groups for its research and found that while no federal funding geared toward increasing access to broadband was specifically targeting small businesses, the FCC did expect businesses to be included in the locations where it said that more broadband availability was necessary.

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The GAO report also said that in the organization’s interviews with a dozen small business owners, it found that there were several advanced tasks, such as using accounting software for payroll or uploading and storing large documents, that businesses were unable to do using their existing broadband connections that were operating at the FCC’s minimum benchmark speed of 25 Mbps upstream.

The GAO report cited a 2017 fact sheet from BroadbandUSA, an NTIA program, that said that small businesses need a minimum of 50 Mbps speeds to conduct tasks such as managing inventory, operating point-of-sale terminals and coordinating shipping. That report also said that more symmetrical data flows that balance download and upload speeds will be required in the future.

Interestingly, the report also included a survey sponsored by Amazon and the U.S. Chamber Technology Engagement Center that targeted rural small businesses and found that about 20% of them were not using broadband and that nearly 5% were still using dial-up.

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