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Lack of internet access hurts economic development, leaders say

News Photo by Crystal Nelson Erik Johnson, owner of Svede’s, talks about his business startup as he heats a branding iron with a blowtorch in his garage earlier this month.

ALPENA — More and more businesses in Northeast Michigan rely on the internet, but a lack of internet availability makes it hard for owners to start up or thrive in rural areas, entrepreneurs and economic development officials said.

Northeast Michigan is “greatly underserved” when it comes to internet services, said Art Ross, owner of the Rogers City-based Design Team Media. Federal data shows nearly a third of the region’s residents lack access to internet speeds sufficient for modern life.

Ross, who provides computer and technology services to seven counties in the region, said business corridors develop where the internet’s available. Connection tends to be available in populated areas, but, not very far from those places, the choices are slim to none, Ross said.

The government and internet service providers have invested large sums of money into internet infrastructure in the region, but that investment hasn’t reached many residents. For many others, it’s still not adequate.

Those shortfalls create barriers for established businesses in rural areas, and can jeopardize future development opportunities.

The internet “is at or near the list of things businesses want and need before deciding to develop,” said Mike Mahler, economic development director at the Alpena Area Chamber of Commerce. “If they can’t get what they need, they will look for other options in other communities.”

‘FRUSTRATING, TO SAY THE LEAST’

Many proprietors rely on the internet to promote their business and complete transactions, with an estimated $1.2 million in e-commerce conducted every 30 seconds worldwide, according to AdWeek.

Yet nearly one in four rural Americans say access to high-speed internet is a major problem in their area, a 2018 study from the Pew Research Center found. Another 34% of rural residents consider access to high-speed internet is a minor problem.

Carl Bourdelais, senior business consultant with Small Business Development Center, said most businesses in the past used the internet as a way to put information out about their business.

But that has changed, he said, and the internet has become a way to do business.

“Now, we’re doing a lot more actual transaction of business virtually — whether it is ordering and shipping, ordering for pick up — that type of communication that is a little more advanced than the older version, where it was just an information platform,” he said.

Erik Johnson operates his business, Svede’s, offering a line of natural skincare products out of his home in Spruce. Johnson estimates about 5% of his business is done online through Etsy, but he’d do more if he had better internet service. He currently accesses the Web through a mobile hotspot, a device that uses cellular signals to broadcast internet signals, to access the internet.

He owns the domain for what will be his eventual website, but creating the website has been challenging for Johson.

“Just to get online and work on it online is frustrating, to say the least, when you’re loading stuff up,” he said. If he didn’t have to rely on the hotspot, “that would turn four hours of work into 30 minutes. It’s frustrating.”

‘IT TAKES TIME TO CATCH UP’

Some businesses that went many years without high-speed internet have gained access over the last several years.

Jack Mathias, owner of Thunder Bay Resort in Hillman, said the Web has helped him save money, but, more importantly, offer customers amenities they demand when visiting.

Mathias said he was able to tap into an internet line set up by Allband Communications about four years ago, which he said helps with operations, especially booking reservations, as well as marketing and promotion. He said it wasn’t long ago he depended on paper promotions to lure people to camp, golf, and view the elk at the resort.

“Each year, I would print off a quarter of a million brochures and have them distributed at distribution stops along the busy highways, chamber of commerces, and other places,” Mathias said. “We have made the transition to high-speed internet and made the transition to more things being online, but we’re still not where we want to be. It takes time to catch up to everyone else.”

Like swimming pools and hot tubs, people considering a stay at his resort want to know they can access quality WiFi and get good cell reception.

“These things are must-haves now for people, especially for families,” he said. “Right now, we have the internet through Allband, which is better than what we had. Our biggest users are the families with kids who come in with large (recreational vehicles) who stream videos, movies, and music. We have a pretty significant WiFi system and it is all very much in demand.”

Meanwhile, many residents and business owners live in dark spots in Northeast Michigan, especially in Alcona County, where businesses still rely on outdated dial-up internet or unreliable satellite connections. The Alcona Economic Development Corp. has made finding solutions and partners to implement those solutions a top priority to help with growth in the small county.

Although there has been progress, and internet access has improved, still too many people and businesses need quality internet to grow their business the way they intend, Doug Cheek, chairman of the Alcona Economic Development Corp., said.

“If they don’t have internet, it will be difficult for them to survive, and, if they do, and the speeds are unreasonable, they will struggle to compete,” Cheek said. “High-speed internet is a utility that is now just as important as water, electricity, and heat for many people trying to make a living.”

The coronavirus pandemic has highlighted the need for the internet in area homes, where more people are being asked to work remotely to prevent the spread of the virus.

Ross, with Design Team Media, said the pandemic has “cemented remote work as a permanent way to do business.”

If someone who needs to work from home doesn’t have good internet access, Ross said, it’s a disadvantage and means they have to make tough choices.

“I think there are a lot of people, in my opinion, changing employment or residence location because they cannot work from home and their employer may or may not be offering them the ability to work in an office, anymore,” he said.

‘LIMITED INVENTORY’

The region lags in more than just internet access.

When there are technical issues related to technology, businesses are often left out in the cold if they need a simple part to fix a breakdown or malfunction.

Retailers in the area offer a small variety of computer and network parts and programs, but not enough to cover many tech needs. If a computer crashes or system fails, businesses must often scramble to order the needed fix online, or hire a tech professional, which comes with a high cost.

Mahler, of the Alpena Chamber, said there are technical companies in the area that provide assistance when things go wrong with computers and networks, but they often come with a cost higher than making a simple fix if you’re able to.

Outside of Walmart and Meijer in Alpena, and RadioShack in Rogers City, there are few places to go to purchase tech gear if it’s needed quickly, Mahler said. He said there is definitely room and a need in the community to have a tech retailer locally.

“I think it is pretty much assumed that you have to buy things like that online now,” Mahler said. “There is limited inventory of stuff in the area and few options for things like computers. People also like to try things hands-on, to see how they feel, how fast they are before buying them. It’s really hard to do that here.”

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