The Business of Broadband

After a year of research and meetings, the FCC formerly debuted the National Broadband Plan yesterday as part of a regularly scheduled FCC Open Meeting. I have to give the commission their due for taking on this challenge, and for the way that they have done so. It’s been an open process, and they’ve sought comments from all sides, including holding 36 meetings with 2,500 participants, issuing 31 public notices, and wading through 74,000 pages of public comments. They have also transformed the communication paradigm in the agency with their broadband.gov Web site, and the use of social media like video and Twitter. In fact, Chairman Julius Genachowski noted that the FCC Twitter account has over 330,000 followers, more than William Shatner, and that the “FCC is boldly going where no Commission has gone before”.

No new information was given at yesterday’s meeting. As I wrote about last week, the relevant details of the broadband plan were already leaked in dribs and drabs over the last month. It seems the official announcement was primarily to stress the importance of broadband and the need for a coherent, national plan, as well as for congratulatory statements on the hard work of those involved (which I’m sure was the case with the 356-page plan).

Regulatory Access and Broadband Adoption

There was the expected ideological posturing yesterday on the part of the commissioners concerning the extent to which government should or should not be involved in the actual process, and the need for regulation to accomplish the commission’s goals. Commissioner’s Baker and McDowell emphasized that they wanted to see a continued light regulatory touch, which they said has fostered broadband growth:

“95 percent of Americans, or 290 million people, have terrestrial broadband access—a remarkable achievement in a country as large and diverse as ours. Broadband competition is healthy and vibrant. The Plan finds that over 80 percent of households have access to more than one broadband provider today providing service over 4 Mbps. Tens of millions more have access to competing mobile broadband providers.” Meredith Baker, Commission Member

Commissioner McDowell agreed that access to broadband services has come a long way:

Commissioner Robert McDowell

“Out of 114 million households in America, only 7 million lack access to broadband. Seven years ago, only 180,000 homes had access to fiber-based broadband. By the middle of last year, that figure spiked to over 17 million households.” Robert McDowell, Commission Member

Commissioner McDowell also stressed that the commission should “first and foremost do no harm”. He cautioned against the government becoming a hindrance to broadband adoption, noting that 92 percent of American households have access to cable modem service, and the expected upgrade of cable systems to DOCSIS 3.0 will give over 104 million American homes up to 100 mbps.  He said “unless the government provides disincentives to investment, the Plan’s goal of reaching 100 million households with 100 mbps services should be attained well before 2020 if we allow current trends to continue in an unfettered manner.”

Commissioner’s Copps and Clyburn, as expected, emphasized the current digital divide, and the need to include more Americans to ensure everyone has equal access to opportunity. Copps went so far as to call broadband a civil right.

“This is not something that would be nice for us to do; it is everyone’s right. And I think of it as a civil right to have this kind of access, because access denied is opportunity denied. America can no longer tolerate having digital divides between races and ethnic groups, between haves and have-nots, between those living in big cities and those living in rural areas or tribal lands, between the able-bodied and persons with disabilities.” Michael Copps, Commission Member

Commissioner Clyburn agreed that the issue is broadband adoption and access for all Americans.

“Nearly one-third of Americans – or 93 million – have not adopted broadband at home, meaning they cannot easily apply for most jobs offered by Fortune 500 companies, nor take advantage of essential educational, health care, or small business opportunities available on the Internet.” Mignon Clyburn, Commission Member

In addition, she indicated that some level of regulation will be required to ensure “near universal adoption” and cautioned against succumbing to “the familiar blanket assertions that all government involvement is negative.”

Universal Service Fund

All commissioners agreed that the Universal Service Fund needs to be transitioned to a broadband fund within ten years; however, Commissioners Baker and McDowell stated that the size of the fund should not be expanded. Both noted that the contribution factor next quarter will be the largest it has ever been at 15.3 percent, and consumers ultimately are the ones who pay that price.

Open and Neutral Access

Two items of that have been a concern for broadband providers are notably absent from the plan at this point–Open Access and Net Neutrality.  Open Access rules would require that facilities-based broadband providers share their networks to foster competition. While the plan is currently silent on this issue, Chairman Genachowski calls it “a living, breathing strategic blueprint that will be reviewed and revised in light of experience and growing knowledge”, and commissioner Clyburn said that the Commission “must stand ready to act where competition is lacking and be willing to use all available tools to protect consumers and to inject meaningful competition into the marketplace.”

The controversial topic of Net Neutrality, which could significantly limit broadband providers ability to manage traffic on their own networks, is also not covered in the plan. Perhaps in response to the possibility that it might be a topic for another day, Commissioner McDowell did not miss the opportunity to emphasize his belief in a hands-off approach regarding Net Neutrality when he said “Although the Plan does not take a position on that proceeding, I take this opportunity to reiterate my serious concerns regarding this agency embarking on such a regulatory journey.”

Next Steps

Now that a plan has been presented, the hard work of seeking the necessary approvals and implementing the plan begins. The agency will be issuing dozens of notices of proposed rulemaking (NPRMs) in coming months on items that could be implemented without congressional approval. In addition, Congress is ready to begin evaluating the details of the plan next week, as a Senate committee and House Subcommittee have scheduled hearings on Tuesday and Thursday.

As far as paying for the plan, Genachowski claims that the plan will be revenue neutral, with funds coming from a revamped Universal Service Fund and the auctioning off of wireless spectrum.  This, of course, remains to be seen, as both of these items are expected to be contentious.

Want to know more?  You can read an HTML copy of the entire plan on-line, or download each section in PDF format.