NY Times
March 12, 2010
Vast F.C.C. Effort to Widen U.S. Internet Access Sets Off Battle
By BRIAN STELTER and JENNA WORTHAM
The Federal Communications Commission is proposing an ambitious 10-year plan that will reimagine the nation’s media and technology priorities by establishing high-speed Internet as the country’s dominant communication network.
The plan, which will be submitted to Congress on Tuesday, is likely to generate debate in Washington and a lobbying battle among the telecommunication giants, which over time may face new competition for customers. Already, the broadcast television industry is resisting a proposal to give back spectrum the government wants to use for future mobile service.
The blueprint reflects the government’s view that broadband Internet is becoming the common medium of the United States, gradually displacing the telephone and broadcast television industries. It also signals a shift at the F.C.C., which under the administration of President George W. Bush gained more attention for policing indecency on the television airwaves than for promoting Internet access.
According to F.C.C. officials briefed on the plan, the commission’s recommendations will include a subsidy for Internet providers to wire rural parts of the country now without access, a controversial auction of some broadcast spectrum to free up space for wireless devices, and the development of a new universal set-top box that connects to the Internet and cable service.
The effort will influence billions of dollars in federal spending, although the F.C.C. will argue that the plan should pay for itself through the spectrum auctions. Some recommendations will require Congressional action and industry support, and will affect users only years from now.
Still, “each bullet point will trigger its own tortuous battle,” said Craig Moffett, a senior analyst at Sanford C. Bernstein & Company.
For much of the last year, Julius Genachowski, the F.C.C. chairman and the plan’s chief salesman, has laid the groundwork for the Congressionally mandated plan by asserting that the United States is lagging far behind other countries in broadband adoption and speed. About a third of Americans have no access to high-speed Internet service, cannot afford it or choose not to have it.
In a speech last month, Mr. Genachowski observed that the country could build state-of-the-art computers and applications, but without equivalent broadband wiring, “it would be like having the technology for great electric cars, but terrible roads.”
The plan envisions a fully Web-connected world with split-second access to health care information and online classrooms, delivered through wireless devices yet to be dreamed up in Silicon Valley. But to get there, analysts say the F.C.C. must tread carefully with companies like Comcast and AT&T that largely control Internet pricing and speeds. Already, there are questions about the extent to which the F.C.C. has jurisdiction over Internet providers.
The F.C.C. says it can make some important changes on its own. They include reforms to the Universal Service Fund, which spends $8 billion a year from telephone surcharges to ensure that rural and poor people have phone lines at home. It also supplies Internet access to schools, libraries and rural clinics.
By reducing the phone subsidies over time, the fund could instead “support broadband access and affordability,” especially in remote locations where private companies have little incentive to build networks, said Colin Crowell, a senior counselor to Mr. Genachowski.
In recent weeks, the most-talked-about idea in the television industry has been a voluntary auction of over-the-air spectrum for future mobile broadband uses. In total, the F.C.C. is hoping to free up roughly 500 megahertz of spectrum, much of which would come from television broadcasters, which would be compensated if Congress acts.
The proposal already faces resistance from the TV industry. Stations say they still serve a valuable public service, especially during emergencies, and say the F.C.C. proposals could cause gaps in signal coverage.
But F.C.C. officials assert that the spectrum changes are necessary given a looming spectrum shortage. “It isn’t a crisis tomorrow, it’s a crisis in five or six years,” Mr. Crowell said, but allocation “literally takes years.”
The plan will advise that some of the spectrum become unlicensed, so it can serve as a test bed for new technologies.
Also notably, the plan will include an initiative the chairman calls 100 Squared — equipping 100 million households with high-speed Internet gushing through their pipes at 100 megabits a second by the end of this decade. According to comScore, the average subscriber now receives speeds of three to four megabits a second.
The government is “setting a stake in the ground by setting a standard for broadband speeds in order to be a competitive nation,” said Dan Hays, director of PRTM, a global management consulting firm in the telecommunications industry.
He said the plan could place “significant pressure” on incumbent providers to improve their networks.
Mr. Genachowski also argues that broadband expansion can be an economic stimulant, a crucial selling point in a time of high unemployment. “Broadband will be the indispensable platform to assure American competitiveness, ongoing job creation and innovation, and will affect nearly every aspect of Americans’ lives at home, at work, and in their communities,” he said Friday.
According to officials briefed on the proposals, the plan will also call for a “digital literacy corps” to help unwired Americans learn online skills, and recommendations for $12 billion to $16 billion for a nationwide public safety network that would connect police, fire departments and other first responders.
In a move that could affect policy decisions years from now, the F.C.C. will begin assessing the speeds and costs of consumer broadband service. Until then, consumers can take matters into their own hands with a new suite of online and mobile phone applications released by the F.C.C. that will allow them to test the speed of their home Internet and see if they’re paying for data speeds as advertised.
“Once again, the F.C.C. is putting service providers on the spot,” said Julien Blin, a telecommunications consultant at JBB Research.
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