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The Federal Communications Commission met Wednesday to discuss obstacles to enacting a national broadband policy that will provide high-speed Internet access to every American.
President Obama has made universal broadband access a key goal. Grants and loans for helping make universal broadband access a reality have already started being doled out as part of Congress’ economic stimulus package.
In an effort to ensure that new programs and policies work toward achieving the same goal, the FCC has been tasked with developing a national broadband plan to help direct policy makers in getting affordable broadband to every American. A task force, headed by Blair Levin, who had been chief of staff for former FCC chairman Reed Hundt, is developing the plan that will be presented to Congress on February 17, 2010.
Levin and his staff appeared before the FCC Wednesday to present what they see as gaps or obstacles that must be overcome to develop clear recommendations and policy for universal broadband.
Levin said that commissioners and policy makers must consider the broadband ecosystem if they hope to achieve the president’s goals. This means taking into account not only consumer needs but also considering the needs of the industry, which will likely fund the bulk of the $20 billion to $350 billion that will be needed to build new infrastructure and develop new programs for spreading broadband throughout the country.
In considering these needs, Levin said it is important to identify and come up with ways to overcome some hurdles that stand in the way for achieving the ultimate goal of providing broadband to every American.
Obstacles to universal broadband access
One major issue has to do with the Universal Service Fund, a program funded through extra charges on consumers’ phone bills. The USF was originally designed to provide subsidies to pay for phone service in rural communities. But the task force believes that more of the $7 billion that is allocated each year from the fund should also be used to help subsidize the cost of deploying broadband in rural areas.
Today, most of these funds are used for voice services and not broadband, the task force reported. And of the money that is used to subsidize broadband, the group noted it is often used inefficiently so that gaps in broadband deployment are still not filled.
The task force also reported that there is still a high level of disparity in income levels between people who subscribe to broadband service and those who do not. Nearly 90 percent of families with incomes of $100,000 or more subscribe to broadband services, compared to 35 percent with incomes of $20,000 or less. Rural households are less likely to subscribe to broadband service than urban households. About 65 percent of white households subscribe to broadband, while only 40 percent of Hispanic households subscribe to broadband and 46 percent of African-American households have broadband.
Another issue that was brought up by the task force during the meeting is the fact that broadband service providers tend to favor higher-income regions in more populated areas over low-income areas.
The data suggests that many low-income people in these parts of the country are offered only one broadband service option. The data also suggests that these consumers who have only one option tend to pay higher prices for service.
What this means is that lower-income people, who have less disposable income, are often the ones forced to pay higher prices, while people who have more money pay lower prices for service.
Deployments in rural areas are often affected by the high cost of building infrastructure and providing service. The task force noted that “middle mile” costs are almost three times higher than general network operations costs. This high cost is often a serious barrier to rural broadband deployments, the group said.
This “middle mile” infrastructure consists of equipment and fiber that connects local cable head-ends or telephone company central offices with bigger points of presence that connect those networks to nationwide networks. The task force said there was a lack of efficient coordination when carriers or other utility providers dig trenches for fiber infrastructure. The group also noted that these deployment gaps don’t only affect rural consumers, but many residential neighborhoods and small business marketplaces as well.
As the Internet and television markets converge, the task force also noted that a lack of innovation exists in the TV set-top box market. Specifically, the majority of consumers today use set-top boxes provided through their subscription TV providers. And only a very small number of devices are even available to purchase at retail. By comparison, there are hundreds of devices available in the mobile phone market. Due to a lack of competition, innovation has been stifled. And the task force recommends the FCC adopt policies to encourage a retail market for such devices.
That said, the FCC has tried to encourage the consumer electronics industry to develop set-top boxes that could be bought separately from cable services, but so far the efforts have largely failed.
More spectrum needed
On the wireless side, the key barrier is a lack of spectrum, the task force said. The problem is simple, as demand for mobile broadband increases, there is a need for more spectrum to support these services. Demand for these services comes from the rapidly growing market for smartphone wireless devices and Netbooks. By 2011, smartphone sales are expected to overtake standard mobile phones.
The task force said it is critical for the FCC to identify and reallocate available spectrum as soon as possible. The group said the nation could face a spectrum shortage as soon as 2013 or 2015, if nothing is done today.
The wireless trade group CTIA and the Consumer Electronics Association support this claim. And the groups sent a letter to FCC chairman Julius Genachowski on Tuesday urging him to investigate using broadcast TV spectrum for mobile Internet use.
The measure is opposed by the broadcast TV industry. But the FCC task force noted that as the need for wireless broadband spectrum increases, the need for broadcast TV spectrum is actually decreasing. Specifically, smartphone subscriptions have increased by 690 percent since 1998, while over-the-air TV viewership decreased by 56 percent. This proposal is already generating criticism from lawmakers supporting the TV broadcast industry.
Levin and his staff acknowledged there are many other barriers that exist in providing affordable broadband access to every person in the U.S. Levin said his staff is on track to meet its February deadline, but he said the process will remain open throughout the remaining 90 days that are left to incorporate new ideas. He also emphasized the fact that the ultimate success or failure of the national broadband plan will be in the hands of Congress and policy makers who must remain committed to implementing the plan.
“In my experience and seeing what has worked in other countries, you can plan all you want, but there really needs to be a long-term commitment for such plans to succeed,” he said.
Also as part of the meeting, the five-member FCC unanimously voted to impose a “shot clock” for wireless tower applications to speed up the time it takes for wireless operators to deploy new cell phone networks.
Chairman Genachowski promised last month at the CTIA tradeshow in San Diego that the Commission would do what it could to speed up this process. And the Commission’s vote solidified that promise.
“Tower siting is a vital piece of our industry,” CTIA president and CEO Steve Largent said in a statement. “It enables mobile services, including voice and broadband, for consumers, public safety, and businesses. Both Congress and the Supreme Court recognized the importance of taking concrete steps to ensure that the zoning process does not become a barrier to the reasonable deployment of, and competition among, diverse wireless networks.”
