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Details of the Federal Communications Commission’s much anticipated National Broadband Plan are trickling out as the deadline for the report quickly approaches. But exactly who will pay for all these bold plans hasn’t yet been discussed.
The report, which was mandated as part of last year’s economic stimulus bill, will provide a blueprint for policy makers and lawmakers to provide ubiquitous high-speed Internet access to every American. It will be presented to Congress on March 17. The plan, which is expected to be hundreds of pages long, will include recommendations for new rules, such as reforms to the $7 billion Universal Service Fund. And it will also include policy recommendations for expanding network coverage, increasing broadband speeds, and encouraging competition.
FCC officials started sharing bits and pieces of the report last week after publishing a preliminary report explaining the plan. In the past several days, the agency has highlighted some specific goals such as faster broadband speeds, a new nationwide wireless public safety network, and technology that will allow consumers to monitor their electricity usage at home via the Internet.
At this point, specific details of these initiatives are still scarce, especially details about who will pay for all these ambitious plans. The government will likely chip in some, but the private sector will also be asked to foot much of the bill.
The goals
As part of its preliminary report, the FCC said it sees broadband Internet access as the way to create jobs, improve the quality of health care, reduce America’s dependence on foreign energy, improve education, and provide public safety and homeland security throughout the country.
So far much of what the FCC has said on most of these topics has been at a high level. In terms of spurring job creation, the agency sees a robust broadband infrastructure as a way to deliver job training and placement services. And the agency believes “public-private” partnerships are the way to fund these projects.
When it comes to health care, the FCC believes broadband can facilitate the sharing of medical records as well as provide remote monitoring and diagnosis. By removing some regulation, the FCC believes a robust broadband infrastructure can save as much as $700 billion during the next 15 to 25 years.
In terms of making the U.S. more energy efficient, the FCC proposes integrating the broadband infrastructure with the smart electrical grid to help consumers reduce energy consumption. Integrated broadband access, could allow people to remotely turn on and off home appliances. And these networks could be used to remotely monitor consumption and provide information to consumers to make better decisions about power usage.
As for some of the other lofty goals in the report, the FCC is already starting to release some details. For example, on Thursday it offered more details on a proposed nationwide wireless network that would be built for law enforcement and first responders.
During a press briefing, Chairman Julius Genachowski said the FCC is recommending in the National Broadband Plan that the government spend about $18 billion during the next 10 years to build and help fund operation of a national public safety wireless network. He said public money is a necessity to achieve this goal.
“The private sector is simply not going to build a nationwide, state-of-the-art, interoperable broadband network for public safety on its own dime,” he said.
Under this new plan, the government would re-auction spectrum in the D Block of the 700MHz spectrum band, which did not sell during the original 700MHz auction. The spectrum would then be shared with public safety, who would get priority for the spectrum in the event of an emergency.
Also as part of the National Broadband Plan, the FCC recommends improving broadband access for primary and secondary schools. And it already unanimously voted to tweak the rules of the Universal Service Fund so that schools that receive funding from the program can offer after-hours access to their computer centers to their communities. Under current FCC rules, schools receiving this funding are not allowed to do this.
Genachowski has also said that broadband speeds should be faster. And last week he said he expects 100 million U.S. households to get Internet service of at least 100 megabits per second by 2020. These speeds are at least 10 times faster than Internet speeds most U.S. residents get today.
The FCC’s ambitious plans are meant to help pave the way for the U.S. to be a leader in broadband. The U.S. has often been criticized for lagging behind other nations when it comes to broadband services and infrastructure. While some parts of the U.S. have robust broadband networks and services, others do not. And even in areas where broadband is available, many Americans still choose not to subscribe.
The FCC recently published results from a survey that indicated 93 million Americans, or nearly one-third of the population, don’t have broadband Internet at home. A major reason for this had to with the cost of service and a lack of education and knowledge of how services would benefit consumers.
Universal broadband access doesn’t come cheap
Getting the necessary infrastructure built, lowering the cost of service, and educating consumers about the benefits of broadband won’t be cheap. In September, the FCC estimated it could cost more than $350 billion to build the necessary infrastructure and fund programs to get Americans connected.
Exactly, how much of this will be paid for with tax dollars versus how much will be paid for by private industry investment is not yet known. Part of the National Broadband Plan will also address how regulation or deregulation can be used to encourage investment and foster adoption which spurs innovation and forces affordability.
So far, the FCC hasn’t said much about on these issues. For example, it hasn’t said what policies it will change or enact to encourage competition. And it hasn’t discussed other major issues such as reforming the Universal Service Fund, which is funded by extra charges on phone bills.
Phone companies and cable operators say they’re concerned the FCC is considering changing how Internet lines are regulated. Some of the largest broadband providers, including AT&T and Verizon Communications, sent a letter to the FCC earlier this week arguing that regulation on this front should not be changed.
FCC officials have said the plan won’t include a proposal to require phone and cable companies to share their broadband infrastructure with competitors, as some consumer advocates had hoped.
But some network-sharing requirements could part of the plan, the Wall Street Journal recently reported. For example, one proposal would require phone companies to lease parts of their networks at retail rates to rivals that want to service small businesses.
Phone and cable companies say that any new requirements forcing them to share infrastructure would stifle investment, which is exactly the opposite of what the FCC hopes to achieve with its regulatory policies.
More details of the plan are likely to trickle out in the next couple of weeks as the agency prepares for its big unveiling before Congress. So stay tuned for more updates.
