Michigan Retailer Emphasizes Importance of Broadband Technology in Testimony to Congressional Committee; High-Capacity Internet Offers “Tremendous Potential” for Rural Businesses, Consumers

WASHINGTON, DC — May 23, 2001 — Broadband Internet access is essential to the future of e-commerce and will increasingly provide a competitive advantage to businesses that use it but a disadvantage to those without access to it, according to recent Congressional testimony given by Marvin Imus, vice president of Paw Paw Shopping Center, a family-owned supermarket in Paw Paw, Michigan.

Imus, representing the Food Marketing Institute (FMI), testified before the House Subcommittees on Rural Enterprise and Technology Policy and Regulatory Reform and Oversight, which are currently reviewing the competitive advantages of broadband Internet access in less populated areas.

“Broadband access is important for both small businesses and consumers in rural America, but its availability in rural areas is very limited,” Imus told the committee. “Currently, information transmitted to and from customers is much too slow. Broadband access could dramatically increase the speed by which information is delivered between my store’s Web site and my customer’s computer, dramatically increasing my Internet shoppers and future Internet capabilities.”

Imus, a member of FMI’s Independent Operator Committee, and other rural supermarket owners are urging Congress to help ensure access to broadband technologies in rural areas. The grocers maintain that 56K dial-up modem transmissions, now available in most parts of the country, are much to slow to handle business transactions in a timely and convenient manner.

Under existing conditions, supermarket chains and large-scale operators may be able to use the speedier but costlier satellite transmissions for their Internet operations where broadband is not available, potentially gaining a competitive advantage in Web penetration.

“My store has invested significantly in technology to improve efficiency and customer service,” Imus told the committee. “Still, it is expensive and frustrating to try to stay up to date technologically with my competitors. As a small business, I have to wait for a local phone
company or perhaps a cable company to offer broadband access before I can benefit. My competition, however, can afford to install a satellite-based Internet service to enhance Web-based offerings from their rural stores.”

“With broadband, you not only get speed but volume, too. It can provide the TV-like quality audio and video that today’s consumers expect and demand. The potential is tremendous. But until my store can get to that point, my penetration of Web-based customers will remain small and the share will not attain the critical mass needed for effective marketing.”

Founded in 1947, Paw Paw Shopping Center is a 41,000-square-foot store in southwestern Michigan. The store actively promotes its Web site, www.pawpawshop.com, and regularly uses the site to offer weekly specials, wine ordering, gift baskets, weekly recipes and prepared foods, as well as household tips and consumer alerts. Imus estimates that 10 percent of the store’s customers visit the Paw Paw site.

The committee will continue hearing testimony from other small business operators through the end of May.