Monday, March 15, 2010

All eyes on the US as National Broadband Plan approaches


The FCC's long awaited National Broadband Plan will be unveiled tomorrow, a day before it's presented to Congress. Some interesting speculation from the FT (US watchdog prepares for broadband shake-up) on the plan's likely focus:
"The shortage of available spectrum is widely seen as the single biggest obstacle to progress. While many countries forced their local telecoms companies to give preferential access on their networks to rival internet service providers, ensuring a competitive broadband market, the US abandoned a similar attempt early last decade. That has made the wireless networks the best hope for fostering new broadband competition."
The article goes on to flag the resistance TV broadcasters have expressed to giving up any spectrum. But while wireless has potential to provide coverage relatively affordably (especially in comparison with the civil works cost of installing fibre), its ability to deliver bandwidth is limited, especially in terms of NGA levels of provison?

Fierce Telecom flags proposals to reclassify broadband to enable reallocation of Universal Service Fund monies (which subsidise phone service in rural areas and for low-income households) to fund broadband for areas without high-speed Internet service as a key issue:
"Perhaps the most controversial element to leak out about the broadband plan is a proposal to shift the focus of the Universal Service Fund from voice to helping to provide incentives for broadband service deployments. A reformed USF plan would include a new Connect America fund and a mobility fund."
The Wall Street Journal also flags the important role wireless will play in the plan, and it seems funds may not be sufficient to realise the FCC's ambitions:
"...(the) National Broadband Plan will propose up to $25 billion in new federal spending for high-speed Internet lines and a wireless network for police and firefighters as part of a broader plan that appears to be a win for wireless companies...(the FCC) would allocate significantly more airwaves for wireless broadband services, including a block of airwaves set aside for use by police and firefighters...$9 billion in federal spending would bring broadband to rural areas faster, however, FCC officials say they don't believe Congress is likely to endorse more broadband spending. That $9 billion would be in addition to the $7.2 billion for broadband lines Congress included in the economic-stimulus legislation."
This previous FCC announcement suggested that the public safety network would require $12-16 billion over 10 years. The same WSJ article has this to say in relation to the USF proposals:
"The plan will also suggest creating a new broadband account in the federal Universal Service Fund, an $8 billion annual program funded by ratepayers which subsidizes phone service in rural areas and for low-income Americans...FCC aides say the size of the $8 billion annual program won't increase because the agency will root out waste in the program. Mr Genachowski (FCC Chairman) will propose redirecting USF from funding phone service to funding Internet service over the next decade, starting in 2012. The fund has continued to grow larger every year despite efforts to cap its size."
Another WSJ article is very critical of the FCC's approach, accusing it of using the plan as a "Trojan Horse" to expand its jurisdiction:
"In 2009 alone, broadband providers spent nearly $60 billion on their networks. Absent any evidence of market failure, the best course for the FCC is to report back to Congress that a broadband industrial policy is unnecessary. Instead, FCC Chairman Julius Genachowski is moving to increase the reach of his agency and expand government control of the Web. Among other things, he wants broadband services reclassified so the FCC can more heavily regulate them. The national broadband plan, to be unveiled tomorrow, will call for using the federal Universal Service Fund to subsidize broadband deployment. The USF currently subsidizes phone service in rural areas, and Mr Genachowski knows that current law prevents it from being used to subsidize broadband unless broadband is reclassified as a telecom service. Congress ought to be wary of letting the FCC expand its jurisdiction through back doors like this. Mr Genachowski wants more control over broadband providers so that he can implement "net neutrality" rules that would dictate how AT&T, Verizon and other Internet service providers manage their networks. To date, Congress has given the FCC no such authority. Nor has the agency had success in court. Based on oral arguments last month, the D.C. Circuit Court of Appeals is almost certain to rule against the FCC in a case involving Comcast's network management."
The USF proposals make for an interesting comparison with our 50p landline levy/Next Generation Fund though...the US approach appears to be about the better deployment of existing revenues, rather than raising additional funds?

Also gaining some attention is a line in a recent FCC press release, as flagged by PC Magazine, about the commission's involvement with America's Digital Inclusion Summit on 9th March:
"Tuesday’s summit focused on ways to help people take advantage of broadband when it is available to them, known as broadband adoption...The draft broadband plan makes a number of recommendations on increasing broadband adoption to FCC, Congress and other branches of government and the private and non-profit sectors. They include...make broadband more affordable...consider use of spectrum for a free or very low cost wireless broadband service".
This has been met with opposition from the commercial sector, of course, with fears that such a service would interfere with spectrum that operators purchased at high cost during the Advanced Wireless Services auction in 2008. I await tomorrow's announcement with interest.

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