Tom Wharton, a former bankruptcy-turnaround consultant, is the man who turned NEESCom's head. In 1998, Wharton bought a bankrupt Internet service provider. Bell Atlantic was going to charge him $6,000 a month for connectivity in Worcester. So he drove 45 minutes to Providence, R.I., where he could colocate his servers with another provider for $250 a month. On the drive back to Worcester, he mused that it was unfortunate he couldn't locate his business in the city where he lived. Why, he wondered, was Worcester's technology infrastructure so far behind that of other New England cities?
Wharton wrote a letter to the editor of the city's daily newspaper. "The next thing I knew," Wharton says, "I was heading a task force." He began working with the Worcester Area Chamber of Commerce to bring the city's technology infrastructure up to speed. Hearing about Wharton's efforts, NEESCom figured that Worcester would make a great hub for its new regional fiber-optic network and offered to wire the city at its own expense.
About half a dozen competitive telecom companies have since moved in and started selling services on the new network, and Wharton estimates that the influx of providers has drawn at least 10 start-ups to Worcester. That includes a new venture for native entrepreneur Steven Rothschild, who, after having run a family furniture business for 16 years, had started Furniture.com in Worcester. In 1997, Rothschild's high-speed T1 line was costing him $1,800 a month. He was having trouble finding tech-savvy executives who were willing to work in Worcester, and venture capitalists weren't breaking down the door to fund a company in the former mill town. All of that, combined with the tough time he was having in getting tax credits, prompted him to move the company to Framingham, halfway between Worcester and Boston.
But earlier this year Rothschild launched an online lightbulb store, called Bulbs.com, in Worcester. High-speed Internet service costs him $168 a month -- less than a tenth of what he was paying three years ago. He's also having an easier time recruiting managers. And there's even a new $15-million fund for early-stage Worcester businesses. "The technology infrastructure is taking out some of the roadblocks to staying in the city," Rothschild says.
Wharton's task force -- the Worcester InfoTech Project -- has taken on the mantle of marketer for the city's new high-tech offerings. But the NEESCom network hasn't been a panacea. "This isn't Field of Dreams -- 'If you build it, they will come," says Couture, who hasn't even been able to connect his business to the network yet. Another prominent local company, Tatnuck Bookseller, is situated just a few hundred feet away from one of the city's three network rings, which cover the downtown business district, a biomedical park, and Worcester Polytechnic Institute. "We are betting our company's future on giving our customers access to us and having access to them," says Tatnuck owner Larry Abramoff. "Not being wired is hurting my business right now." (Until the network reaches him, he's making do with leased T1 lines and a wireless service.)
Still, Worcester's model -- in which a private company, rather than a public utility, installs the network -- may prevail in future business-community resurrections. Tacoma's model has goosed some big privately owned phone companies. In Washington state, GTE Northwest sued the Douglas County Public Utility District to stop it from expanding its fiber-optic network (the suit was later withdrawn following changes in state law), and the Washington Independent Telephone Association took Pacific County Public Utility District to court to stop it from providing Internet service to customers. So far, Texas, Missouri, and Virginia have passed laws limiting publicly owned electric utilities from offering telecommunications services. AT&T's Kipp views the public companies' inroads in this area as a conflict of interest. "We're beholden to our shareholders," he says. "Then we have to go in and compete with the government, who's also the regulator. That could have a chilling effect on competition."
Steve Klein of Tacoma Power doesn't really care if Click loses residential customers to the new AT&T offerings; he built the network for the power company's own purposes, and the Internet-access stuff is just gravy. The mayor's office doesn't mind if some Tacoma residents think "Wired City" sounds as if a bunch of caffeine addicts have staged a coup. Some of the new start-ups may not even survive. But 100% success is not the point.
The point is to get things going. The more that entrepreneurs hear about Tacoma, the more seriously they will consider starting or relocating a business there. For the first time the people of Tacoma -- and Worcester and other old-economy communities like them -- are leveraging their technological assets to promote entrepreneurial businesses. They're grabbing the reins and kissing destiny good-bye.
Jill Hecht Maxwell is a reporter at Inc. Technology .
Question Authority
Small cities want their zip codes on your letterhead, and they'll try their darnedest to convince you that their technology is state-of-the-art. Don't believe the hype. Here are some key questions you should ask regarding tech infrastructure before you relocate:
- Can I connect to a fiber-optic network in your city?
- How much will it cost to plug in?
- How long will it take? Who's competing to provide me with service?
- What are the rates? Is the network connected to major cities nearby?
- How many other companies are there? Do they use the network?
- Can residents connect to the high-speed network and telecommute?
- Are wireless services available?
Up to Date in Kapolei
Remember when every burg across the nation was billing itself as the next Silicon Whatever? Well, now several cities and at least one state want to be known for their wired wonders. Here's a sampling of the claims:
The Wired City
Kapolei, Hawaii
America's Most Wired City
Louisville, Ky.
The Most Wired City in America
Stillwater, Okla.
America's #1 Wired City
Tacoma, Wash.
America's #1 Cyber City
Worcester, Mass.
The Internet Capital
The state of Virginia
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