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Federal Sequestration Boosts Video Conferencing

August 16, 2013

Cuts in federal budgets have proven to be good news for video and teleconferencing companies, as federal agencies have reduced their travel expenditures and boosted their reliance on virtual meetings. The combination of improved technology and reduced funding has bumped up the demand for virtual conference services from the public sector.

“It’s sequestration for sure,” said Rajesh Natarajan, AT&T’s executive director for federal technology solutions. “But it’s also technology. Even if sequestration was irrelevant, which last year it was, we were seeing an uptick. With teleconferencing being so easy to use and videoconferencing almost exploding, it would have increased in any case.”

Meetings that once required travel now are conducted virtually. For example, the Naval Safety & Environmental Training Center is shifting training for 10,000 government civilians and Navy personnel to a virtual environment. NASA plans to reduce its travel costs by about $21 million this year, trying out other services like Google+ Hangouts to conduct press conferences. Another federal agency canceled an annual 300-person leadership conference, opting instead to meet over the phone. 

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Natarajan estimates the demand for AT&T’s video and teleconferencing service has increased about 20 percent during the past six months. AT&T is not alone in seeing its business boom. To meet demand, Polycom, a San Jose-based audio and videoconferencing company, opened a Herdon, Va., office dedicated to federal clients in 2010.

The sequestration has reduced federal budgets by approximately $85.4 billion during 2013, with similar cuts for years 2014 through 2021. But other legislation also may affect the growing demand for videoconferencing. In May, the U.S. Chief Financial Officers Council outlined best practices for conference planning, advising against traveling for meetings unless first establishing that “physical collocation of Federal employees in a conference setting is a necessary and cost-effective means to carry out the agency’s mission (and that other, lower-cost options, such as videoconferencing, have been explored).”

Other related legislation has been introduced as well­­. Introduced in the House of Representatives last month, H.R. 2643 (also known as the "Cut the Waste, Stay in Place Act of 2013” bill) would reduce the federal government's travel expenditures by 50 percent in 2017.

Improvements in technology have helped spur interest as well. Videoconferencing technology now can be installed on mobile devices, and more people are becoming comfortable with videoconferencing technology as its use grows.

The boost in business can come with a price though. Because federal requirements are more complex than commercial ones, often the demands on the technology are greater.

“In the DOD, they’re much more strict,” said Tony D’Angelo, Polycom manager of federal operations. “We need to build in a lot of additional features, allow them to turn a lot more dials to secure the systems differently than you might do with private-sector enterprise,” he said.

Edited by Alisen Downey