The U.S. Federal Communications Commission plans to release a national broadband plan next week that will lay out an ambitious set of goals for broadband deployment and adoption.
The official version of the plan will be released at a commission meeting Tuesday, but FCC followers have seen the agency unveil several major thrusts of the plan in a series of speeches and briefings in recent weeks. In a mid-February speech, FCC Chairman Julius Genachowski kicked off the announcements by saying it was the agency’s goal to bring 100M bps (bits per second) broadband service to 100 million U.S. homes by about 2020.
Many members of the U.S. tech community have called for a national broadband policy for years, and Congress, in the American Recovery and Reinvestment Act passed in early 2009, required the FCC to develop the plan.
Several tech groups have expressed general support for the announcements so far, but others have questioned how the FCC will accomplish what appears to be a wide-ranging and expensive plan. FCC officials have talked about a cost of $12 billion to $25 billion to implement parts of the plan, with wireless spectrum auction proceeds offsetting the costs, but some critics have suggested the FCC’s cost estimates are far too low.
In a time of huge U.S. government budget deficits, there will also be pressure in Congress to use any auction proceeds in other ways.
The broadband plan could meet resistance from incumbent providers as soon as it sees the light of day, said Craig Settles, a community broadband consultant and president of Successful.com.
“I believe the plan is too ambitious for many inside Washington to fully embrace in terms of executing legislation and making funds available,” he said. “The average lawmaker, particularly with elections coming up this year, could not care less about broadband. These are the ones most susceptible to lobbyists’ attempts to neuter the plan. The telecom and cable industry will mine the lofty rhetoric while trying to kill anything they feel threatens profits.”
The major question is whether the FCC can accomplish the “exciting and ambitious” goals in the plan, said Daniel Hays, director of the telecom practice at PRTM, a management consulting firm. “Until we’ve seen the details, what we’ve seen so far is sort of like the goal of climbing Mount Everest,” he said. “It’s a really great goal, but unclear if there’s the detail in the plan and the thinking that’s going to get us there. Getting it done in 10 years is going to be a Herculean task.”
But it was appropriate for the FCC to set ambitious goals, countered Dean Garfield, president and CEO of the trade group the Information Technology Industry Council. In recent years, the U.S. has fallen behind many other industrialized nations in broadband adoption and speed, and the U.S. economy will suffer if it continues to lag, he said.
The FCC plan is “not only achievable, but it’s really necessary,” Garfield said. Genachowski’s goal of 100M bps service to 100 million homes will help the U.S. better compete in the global marketplace, he said.
“There’s no question that both the private sector and the public sector are going to have to work hard to achieve these goals, but that’s what aspirational goals are,” Garfield said. “If we set goals that are eminently achievable, then, yes, we set ourselves up for success, but what are we really trying to do?”
No matter how the plan is received, the FCC doesn’t see it as a fixed document, said Blair Levin, executive director of the FCC’s Omnibus Broadband Initiative. “The plan is in beta and always will be,” he said earlier this week. “This is a call to action.”
Here are some of the major pieces of the national broadband plan announced so far:
The FCC wants 100M bps service to be available to 100 million U.S. homes by about 2020.
Some people have questioned whether this goal is ambitious enough, others have questioned how the FCC plans to get there. The U.S. is likely to have about 130 million households by 2020, meaning a good percentage of U.S. homes wouldn’t have 100M bps service, Mark Cooper, research director at the Consumer Federation of America, said at a broadband forum in February.
“I know that Chairman Genachowski’s vision of America is not a place where 100 million households have 100 megabits of broadband and 30 million households have zero megabits,” Cooper said then.
So far, it’s unclear how the FCC plans to get to 100M bps, said Benjamin Lennett a policy analyst with the Open Technology Initiative with the New America Foundation, a Washington, D.C., think tank. Broadband fiber deployments could get to 100M bps, but copper- and wireless-based broadband services don’t have that capacity, he said. Cable broadband’s DOCSIS 3.0 standard has the capability to achieve that speed, but cable subscribers share local loops and speeds depend on neighbors’ broadband use, he said.
“It will take a substantial upgrade of the existing broadband infrastructure to accomplish this goal,” Lennett said. “The reality is it’s going to take a massive build-out of FTTH [fiber-to-the-home] or FTTN [fiber-to-the-node] to get there.”
The unanswered question so far is, who pays for it? “In nations where FTTH or FTTN is widespread, it has been some combination of government assistance and robust competition that has driven the upgrades and deployments of broadband infrastructure,” Lennett said.
Over the next 10 years, the agency plans to identify 500MHz of wireless spectrum that can be freed up for wireless broadband service.
Mobile carriers and mobile trade group CTIA have talked in recent months about a looming shortage of wireless spectrum, as U.S. residents expect more and more online services to work well on wireless networks. CTIA has praised the FCC for recognizing the need for more spectrum.
The challenge is for the FCC to get current spectrum holders to give it up. The U.S. Department of Defense and other government agencies control huge swaths of spectrum — the government has exclusive rights to more than 600MHz of spectrum, according to one recent study — but agencies have resisted calls for them to turn over spectrum to the FCC.
PRTM’s Hays questioned if the FCC will be able to find 500MHz to auction. The DOD holds a significant chunk of spectrum, and the use is classified, he said. “I actually think in some sense, this one may well be a pipe dream,” he added. “It’s completely unclear whether there’s a group of willing sellers.”
The agency will propose a new program asking television stations to voluntarily give up unused spectrum in exchange for a portion of the proceeds when that spectrum is auctioned.
This is one way the FCC hopes to identify new spectrum, but it’s been one of the most controversial pieces of the broadband plan so far. TV stations control nearly 300MHz of spectrum across the U.S., and in some markets, as little as 36MHz is used, Genachowski said recently. Even in the largest TV markets, only about half of that spectrum is currently being used, he said.
But the National Association of Broadcasters (NAB), representing TV stations, has panned proposals to reallocate spectrum. TV stations lost more than 100MHz of spectrum in the transition to digital TV completed in mid-2009, with the upper 700MHz band of spectrum sold in auctions that ended in early 2008. More spectrum reallocation could hurt over-the-air TV service, the NAB has said.
Broadcasters see value in the spectrum they now control for services such as mobile digital television. “A spectrum reallocation from television to wireless broadband would amount to the commission picking industry winners and losers … while permanently locking broadcasters into a 20th century service,” a group of 16 broadcasters wrote in a filing to the FCC late last year. “Moreover, any broadcast spectrum reallocation would threaten the ability of the tens of millions of Americans who rely exclusively on over-the-air service to maintain access to emergency, news, and public affairs information.”
Hays questioned how the FCC could logistically deal with hundreds of potential sellers across the U.S., each selling a small “jigsaw” slice of spectrum. Beyond that, he questioned why broadcasters or other spectrum holders would want to give back spectrum in return for a piece of the auction profits.
Spectrum holders already can sell spectrum in private transactions, without using the FCC as a middleman, he said. “If I’m a broadcaster … why is it I’m sharing the revenue with the FCC?” he said. “If someone walked up to me and said, ‘Can I buy your house for $10 million?’ I don’t think I’d go out looking for a realtor. I’d probably say, ‘How soon can you have the cash in my account?'”
The FCC will propose that the Universal Service Fund’s $4.6-billion-a-year high-cost program, which now largely subsidizes traditional service to rural areas, be converted to a broadband deployment fund over a 10-year period.
This hasn’t been all that controversial. Calls for USF reform have been coming from most sectors of the telecom industry for years. The Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), a trade group representing small carriers that would be most affected by the charge, proposed last year a seven-year transition to broadband funding.
Congress should spend an additional $9 billion over three years to speed broadband deployment, but the USF money should be enough to bring broadband to 99 percent of the U.S. population by 2020, said the FCC’s Levin. Combined with $7.2 billion in the American Recovery and Reinvestment Act for broadband deployment, the redirected USF program will pay for broadband deployment across the U.S., he said.
The $9 billion could be offset by spectrum auctions, an FCC official said.
John Muleta, CEO of M2Z Networks, questioned whether the USF money would be enough to meet the FCC’s broadband deployment goals. In late 2009, an FCC task force said a nationwide broadband network would cost anywhere between $20 billion and $350 billion, he noted. The $350 billion figure was the estimate for a 100M bps nationwide network.
The cost to bring even sub-1M bps service nationwide could cost tens of billions of dollars, Muleta said. “That means everybody’s paying higher phone bills in order to accomplish this,” he said.
Successful.com’s Settles said he hopes the redirected USF money won’t go only to large broadband providers. The FCC needs to look to Google, which in February announced it would deploy 1G bps broadband service to several cities, he said.
“The FCC needs to do what Google did, which is go directly to communities to have them identify real needs from actual potential users, then allocate money to providers who present proposals to specifically meet those needs,” he said. “Look at the incredible depth of interest and enthusiasm across the county by cities of all sizes that want the chance at getting Google gigabit broadband. No free broadband lunch! Make providers compete for that money, and allow communities to decide the winners. That’s a free market system that works.”
The FCC will ask Congress to fund a nationwide broadband network for emergency response agencies such as police and fire departments, at a cost of $12 billion to $16 billion.
This is controversial on a couple of levels. In the 700MHz auction that ended in early 2008, the FCC had planned to sell a 10MHz block of spectrum, paired with about 10MHz controlled by public safety agencies, with the buyer obligated to build a nationwide network to be shared between commercial and public safety users. That spectrum, called the D block, did not sell.
Several public safety groups have called on the FCC to give them the D block so that they could enter into their own arrangements. But under the national broadband plan, the FCC would sell the D block and other spectrum, with winners of the D block and the other 700MHz spectrum sold earlier required to share their networks with public safety agencies.
Public safety officials have called the proposal “disappointing,” although Genachowski has said that a federally funded network is the “best and shortest path” to a nationwide network.
Public safety officials and U.S. lawmakers have been calling for a nationwide mobile broadband network since the Sept. 11, 2001, terrorist attacks on the U.S., during which the multiple public safety agencies responding to the attacks couldn’t talk to each other.
“This is important,” Genachowski said recently. “We have gone too long with little progress to show for it. The private sector simply is not going to build a nationwide, state-of-the-art, interoperable broadband network for public safety on its own dime.”
Critics of the plan have said the FCC’s cost estimates aren’t close to realistic. A dedicated network using specialized wireless communicators would cost much more, said David Kahn, CEO of Covia Labs, a company that using existing mobile devices to create interoperable networks.
“If they decide to make their own first responder network, the cost is going to be five times what they say it will be,” Kahn said.
The FCC seems to be headed in a slightly different direction, with the public safety network piggybacking on existing networks.
The FCC has suggested that it will propose a nationwide free or low-cost wireless broadband network.
The FCC hasn’t released a lot of detail about this proposal, but it said this week that it is exploring how to build a free or low-cost wireless broadband network. The agency hasn’t talked yet about the cost or what spectrum would be used.
This idea has been floating around for several years, with M2Z’s Muleta one of the main proponents. There are tens of millions of U.S. residents who simply can’t afford broadband, and free, basic service would address the nation’s problem of low broadband adoption, he said.
Opponents have argued that the FCC shouldn’t compete with commercial broadband providers. A free network would lower the incentive of broadband providers to invest in their networks, critics have said.
But Muleta compares a free, moderate-speed wireless broadband network to over-the-air TV service. Many people, after seeing the benefits of broadband, would choose to pay for premium service, he said.