FCC's broadband plan: $15.5B for deployment

Plan calls for a nationwide free or low-cost wireless broadband network across the U.S. in 10 years

The U.S. Federal Communications Commission will recommend the deployment of a nationwide free or low-cost wireless broadband network, and it will pour at least $15.5 billion into broadband deployment across the country over the next 10 years under a national broadband plan to be officially released Tuesday.

The FCC's national broadband plan, released to reporters today, sets a goal of 1Gbit/sec. service to anchor institutions such as hospitals, schools and government buildings in every U.S. community by 2020 and "affordable" 100Mbit/sec. service available to 100 million U.S. homes during the same time frame.

The first comprehensive plan for broadband in the U.S. also calls for Congress to fund a nationwide wireless broadband network for emergency response agencies at a cost of $12 billion to $16 billion. It also seeks to free up 500MHz of wireless spectrum for broadband in the next decade.

The National Broadband Plan is a 21st century road map to spur economic growth and investment, create jobs, educate our children, protect our citizens, and engage in our democracy, FCC Chairman Julius Genachowski said in a statement. Its an action plan, and action is necessary to meet the challenges of global competitiveness, and harness the power of broadband to help address so many vital national issues.

For years, people in the U.S. tech industry have called on the federal government to create a national broadband plan. Although there is argument about the validity of the numbers, critics of former President George W. Bush's administration say that the U.S. ranks behind many other industrialized nations in broadband adoption, speed and price.

The plan outlines several ways for the U.S. to increase broadband speeds and deployment, although it doesn't specifically address how to get to 100Mbit/sec. for most of the U.S. The plan seeks to lower the cost of deploying broadband by reforming right-of-way rules, and it calls on the FCC to revamp wholesale telecom rates and so-called special access rates paid to large telecom carriers for large-pipe connections between buildings and central switching facilities.

The FCC will also establish broadband performance measurement standards and will look at ways to require broadband providers to disclose performance data, according to the plan.

To help broadband deployment, the FCC would transition the high-cost program in the Universal Service Fund (USF), which now largely subsidizes traditional telephone service, into a broadband fund. The $4.6-billion-a-year program would transition into a new Connect America Fund over 10 years, with the FCC expecting to put $15.5 billion into broadband deployment over the next decade. To qualify for funding, broadband providers would have to provide service of at least 4M bps.

Congress could choose to allocate an additional $9 billion if it wanted to speed the deployment of broadband nationwide, FCC officials said.

The Connect America Fund is in addition to the $7.2 billion that Congress approved for broadband deployment in the American Recovery and Reinvestment Act, passed in early 2009.

Separate from the USF money, the FCC will look to identify spectrum that can be used for an advertising-supported, free or low-cost wireless broadband service available nationwide. The spectrum for that service would come from spectrum the FCC plans to identify for reallocation over the next 10 years. The FCC would auction a band of spectrum on the condition that the winner provide free or low-cost service, the plan said.

"If undertaken, many more consumers who cannot afford any broadband or Internet service would have access to 21st century communications infrastructure -- especially important as public-interest media content, including local news and information, is increasingly provided online," the plan said.

The FCC would also allow current low-income programs in the USF to subsidize broadband service for poor people.

The plan will spur dozens of official FCC proceedings and the agency will need some authority from Congress to implement it, said FCC officials, speaking on background. The cost of the plan could range from $12 billion to more than $25 billion, depending on some optional spending that Congress would need to allocate, but the plan's goal of freeing up 500MHz of new spectrum, much of it to be sold in auctions, over the next 10 years, would more than pay for any costs of the plan, an FCC official said.

Several tech groups praised the plan. Some people have seen early copies of the plan, and the FCC released the executive summary today in advance of its Tuesday meeting, when the plan will be officially released.

The FCC has "produced a balanced, comprehensive and forward-looking plan that should serve the country well," said Gigi Sohn, president of Public Knowledge, a digital rights group. "The U.S. has long needed such a plan to keep pace with other countries, and this plan, if implemented, will accomplish that objective."

Public Knowledge was happy to see that the FCC focused on promoting broadband competition and providing new choices for consumers in "what is now a tightly held duopoly," Sohn said.

Large broadband provider AT&T declined to comment on the plan until it was officially released Tuesday.

The plan is a good first step toward a policy that will allow the U.S. to compete better on the global stage, added Dean Garfield, president and CEO of the Information Technology Industry Council (ITI), a trade group. ITI's members probably won't embrace every piece of the plan, he said, but the parts of the plan he saw as of Monday looked positive, he said.

"What we can expect is a road map, a plan for moving forward, and the start of a conversation," Garfield said.

The FCC has hosted a series of briefings previewing major goals in the plan in recent weeks, and there have already been complaints that the plan doesn't go far enough or that it will include new regulations on broadband providers, noted Rob Atkinson, president of the Information Technology and Innovation Foundation, a tech-focused think tank.

But Atkinson said he hopes political wrangling won't get in the way of moving forward on a plan that largely looks solid. "There's an awful lot in the plan that everybody should be able to get behind," he said. "At least two-thirds to 75 percent of the plan are these big, consensus issues."

Unfortunately, some people will pick at the details, Atkinson said. "If we all focused on getting stuff done, we'd look back a year from now and say, 'We got a lot of stuff done,'" he said.

Others questioned whether the plan is realistic. While the plan sets a goal of 4Mbit/sec. service to qualify for the new USF fund, that speed would be slow compared to the FCC's goals for most of the country, said Daniel Hays, director of the telecom practice at PRTM, a management consultancy. The plan's executive summary "does not indicate how this level of speed will enable Americans in rural areas to remain competitive with those who obtain the 100M bps broadband speeds called for in the rest of the plan," he said.

Hays also questioned whether the FCC will be able to free up 500MHz of wireless spectrum over the next 10 years.

"Expectations that incumbent spectrum licensees will make available more than 450Mhz of spectrum nationwide, 300MHz of it within five years, seem completely unrealistic, even if some gain-sharing arrangement can be worked out," he said.

Copyright © 2010 IDG Communications, Inc.

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