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Pictured at the 2015 Border Economic Development & Entrepreneurship Symposium are Robert Coronado, assistant vice president in charge and senior economist for the Federal Reserve Bank of Dallas, El Paso Branch; Fabiola Urgel, a UTRGV senior economics major and a community development intern for the Federal Reserve Bank of Dallas, San Antonio Branch; Jordana Barton, senior advisor on community development for the Federal Reserve Bank of Dallas, San Antonio Branch, and Congressman Rubén Hinojosa.

McALLEN, RGV – If U.S. companies like Sprint and AT&T can announce plans to expand into Mexico, which they have, why can’t Mexican phone companies come to the aid of the Rio Grande Valley and help eliminate the region’s huge digital divide?

This was one of the questions posed to Jordana Barton, senior advisor for community development at the Federal Reserve Bank of Dallas, San Antonio Branch, following a presentation she gave titled “Closing the Digital Divide in the RGV: Why Digital Equity is Vital for a Strong Economy.”

Barton gave the presentation at the 2015 Border Economic Development & Entrepreneurship Symposium, which was hosted jointly by UT-Rio Grande Valley, the Federal Reserve Bank of Dallas, and the McAllen Chamber of Commerce. After pointing out how the Valley was lagging behind in broadband connectivity and how this was weakening the region’s economic competitiveness, Barton had a lively discussion with business leaders in the audience about what could be done to fix the problem.

Barton was told that high-speed Internet was very fast and affordable in Reynosa. Could the phone company in Reynosa not be approached to provide wireless services in areas of the Valley where broadband access is poor, Barton was asked.

Congressman proposes role for North American Development Bank

Barton said the question was appropriate because she has just started having conversations with the North American Development Bank. She said during these conversations she had learned about broadband connectivity in cities like Reynosa. “It surprised me, wow, the northern border of Mexico is doing better at serving its community. It might be one of the ways we can cooperate and learn from each other. It is a wonderful place to look (for answers), on both sides of the border,” Barton said.

U.S. Rep. Rubén Hinojosa was in the audience. The veteran lawmaker said he recently met with the president of NADBank and learned that the agency is seeking an additional $30 million for infrastructure projects. Hinojosa said NADBank funds economic development projects, either through loans or grants, within 100 kilometers of the U.S.-Mexico border on the northern side of the border and within 200 kilomoters on the southern side of the border.

“It is a great vehicle to help us find the monies to enable us to do this broadband connectivity and public WiFi,” Hinojosa said. As a member of the House Committee on Financial Services, Hinojosa said he had worked to ensure NADBank is allowed to work on general economic development projects along the border, not just water and wastewater projects. “It is going to take that kind of network and these types of partnerships (to reduce the digital divide),” Hinojosa said. Hinojosa said he had not seen the cost of “wiring” the Valley but speculated that it might cost about the same as the $300 million used to fix the Valley’s levees in 2010. “We have to think big because that is the only way we are going to look like San Antonio,” Hinojosa said.

Jordana Barton
Jordana Barton

Barton started her presentation by making the case that eliminating the digital divide is a key component in improving a region’s economic vitality.

“Digital equity must be central to community economic development. Like electricity a century ago, broadband is the foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire new industries and unlocking vast new possibilities. It is changing how we educate children, deliver healthcare, manage energy, ensure public safety, engage government and access, organize and disseminate knowledge,” Barton said.

Barton said three Metropolitan Statistical Areas along the Texas-Mexico border – McAllen, Brownsville and Laredo – have great digital divides. One of the Federal Reserve Bank’s charts contrasts the digital divide in the three South Texas MSA regions with Austin, Texas. In Austin, the percentage of households with a computer is 92 percent. In Laredo it is 69.3 percent, in Brownsville-Harlingen it is 71.7 percent and in McAllen-Edinburg-Mission it is 75.6 percent. The regional computer gap scores Austin at zero, Laredo at minus 22.7, Brownsville-Harlingen at minus 20.3, and McAllen-Edinburg-Mission at minus 16.4.

The percentage of households in Austin with high-speed broadband is 82.0. In Laredo it is 51.8, in Brownsville-Harlingen it is 57.4, and McAllen-Edinburg-Mission it is 55.2. The regional high-speed internet gap is zero in Austin, minus 31 in Laredo, minus 25.3 in Brownsville-Harlingen, and minus 27.6 in McAllen-Edinburg-Mission.

Barton said the Federal Reserve Bank of Dallas is acting as a “convener” and is helping bring interested parties together to eliminate the digital divide in the Rio Grande Valley. A demonstration project probably involving 100 students at PSJA ISD and 100 students at La Joya ISD will take place, she said. Other partners in a more large scale, regional, effort, Barton said, include UT-Rio Grande Valley, UT-Austin, Region One Education Service Center, Health & Human Services, Capital One, Doctors Hospital at Renaissance, Advocacy Alliance of Texas, Dell Computers, Verizon, the Small Business Administration, the City of McAllen, the City of Pharr, and the Texas Association of Telecommunications Officers and Advisors.

Barton said involvement by municipalities will be crucial. “The key is the cities because they have the power to influence and create whatever they need to make this work. A lot can be done at the municipal level is what I understand from the experts in the field and that is the approach we are going to take. We are going to show the (demonstration) model, public-private partnerships and so forth. What is it that works? Do we create a public co-op? What is it that we need? The solutions need to be there.”

Question and Answer Session

In the Question and Answer session, Gayle C. King, a real estate agent in McAllen, gave her horror story about Time Warner Cable’s lack of interest in her sub-division project. King said she was developing 72 lots in South McAllen and could not get Time Warner Cable to provide cable lines. “I feel like we are being held hostage by these companies that don’t deliver. I think there should be another way to get Wi-Fi to everyone,” King told the audience.

Later, King gave an interview to the Rio Grande Guardian about her housing project at the corner of Yuma Road and South Bentsen Road, behind Brown Middle School, in south McAllen. She built the subdivision four years ago. Here is her story:

“We are talking about a heavily populated area within the McAllen city limits. I contacted the utility companies even before I started putting in the infrastructure. I told them I was putting in 72 lots and that I needed cable. I notified them way ahead of time, before I broke ground. It took me three years after I platted the subdivision to finally get them and it was only under threat of writing to the city commissioner. The city commission, I believe, gave Time Warner Cable the exclusive right to serve McAllen.

“I was surrounded by neighborhoods that have Time Warner Cable. It was not like I was out somewhere where there were no lines. I had subdivisions and houses all around me that had cable. It really took a lot of threats for them (Time Warner Cable) to finally come out and lay the lines. I wanted them to lay the lines before most of the houses went up, before people put up their garden walls. It took me three years. They just do what they want. They don’t pay attention. I am so afraid that if you give a company like this that kind of power over all these colonias or bringing in public Wi-Fi to the rural areas, it would be terrible. I really feel it should be a municipal utility. It would be the cheapest way to bring it in and the most effective way to bring it in.”

King added that she has friends that live in Torreón, Mexico. She said they tell her that they have eight telephone and Internet companies to choose from and the price per month is half of what it costs in McAllen.

Another member of the audience made the point that it costs tens of thousands of dollars per mile to lay cable so therefore would wireless access not be the answer in more rural areas of the Valley. Barton replied: “We think it will be both. There is a fiber optic ring around the Rio Grande Valley and I am learning more about it. There are different solutions for different types of geography.”

Congressman Hinojosa was not slated to attend the 2015 Border Economic Development & Entrepreneurship Symposium. When he spoke about his work to get more broadband services in the Rio Grande Valley he received a big round of applause. He told the story of then Vice President Al Gore’s efforts 20 years ago to get broadband into schools and libraries across the nation. Hinojosa said given Gore’s directive he organized a meeting with then UT-Pan American President Miguel Nevárez and community leaders and AT&T and other cable providers that were operating in San Antonio.

“They (AT&T) said if we could be patient we should be able to get broadband in seven to ten years. Ladies and gentlemen, that did not sit well with me. So we told them we would look for their strongest competitors and we would invite them (to come to the Rio Grande Valley) and give them all sorts of incentives. Wherever we are today, we made some gains far faster than eight to ten years,” Hinojosa said.

“I see that the Valley population, over the last two censuses, has grown by more than 40 percent. Thus, we are not keeping up with information technology. And, if you listen to what Warren Buffett said just two weeks ago, that information technology and those who do not keep up with it are going to fall behind. So, the Rio Grande Valley is going to have to step up. I would say that 100 percent of the men and women in this room want this to happen. We just don’t know how.”

Hinojosa said he, Congressman Henry Cuellar and Congressman Filemon Vela would bring the Department of Commerce, Workforce Solutions and all the agencies that are being funded with federal monies to “really step up and help us move fast” on boosting broadband connectivity in the Rio Grande Valley.

Interviewed by the Rio Grande Guardian after her presentation, Barton said: “This is a very technical challenge and it involves people with technical expertise as well as community expertise and so we know it is going to be people coming together in a collective impact effort to make this work and to solve this challenge.”

Editor’s Note:  Click here to read a related story about the Federal Reserve Bank of Dallas’ work on eliminating the Rio Grande Valley’s digital divide.