FCC Staff Hint at Some Likely Findings in Plan
The FCC’s National Broadband Plan probably will conclude that Americans are getting less broadband than they pay for, judging from hours of presentations Tuesday at the commission’s monthly meeting. Another likely conclusion is that universal broadband won’t come cheap: The cost could soar to $350 billion, based on commission estimates.
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“If we get this right, if we develop a sound plan for ensuring access to high-speed Internet for all Americans, broadband can be our country’s platform for prosperity and opportunity in the 21st century,” FCC Chairman Julius Genachowski said to open the session. The meeting is the beginning of a several-week process “to make sure we're asking the right questions, identifying the relevant facts, and looking at the right issues,” he said.
Blair Levin, the director of the FCC’s broadband effort, warned that there’s no ready answer for how to pay for universal broadband. “The challenge we all have to recognize is the task we're being asked to do cannot really be done with the current resources,” he said. “If you take a look at the private investment and you add to that universal service, you add to that the grant programs … they simply are not sufficient to solve all the problems of universality, adoption, affordability, and the national purposes that Congress asked us to do.”
FCC staff provided some hints at likely conclusions of the plan, due in February. The commission is almost certain to conclude that it needs much better information from carriers. “While the record is full of material there is often a lack of complete data sets in a form that we can fully analyze,” said Erik Garr, managing director of the FCC’s Broadband Taskforce. The commission has enough information to develop a “very credible” plan, but “over the long haul” the commission needs better data, Garr said.
The FCC is also finding that many Americans are paying for broadband at speeds “materially lower” than advertised speeds, said Carlos Kirjner, senior broadband adviser to Genachowski. “Specifically, the data we have suggests that the median American end user subscribes to services with maximum speeds of 6 Mbps, while the median average speed delivered is 3 Mbps,” Kirjner said.
Kirjner also said speed, and the kinds of applications that will be supported, mean the cost of universal broadband could vary widely. Those costs range from $20 billion to reach the 5 million or so unserved by service at 768 kbps, he said. If the FCC decides that broadband is service at 10 Mbps or higher, about 35 million homes are unserved and the cost to serve them would be about $50 billion, he said. To offer universal service at 100 Mbps would cost $350 billion, Kirjner said. Ensuring that Americans have a choice of providers also could drive up costs sharply, he said.
Office of Strategic Planning Chief Paul de Sa said most regulations are designed for the old PSTN. Policymakers must “actively reshape” regulatory frameworks designed for old technology, he said. That includes overhauling the universal service and intercarrier compensation systems, he said.
John Horrigan, consumer research director for the plan, said education and income are the strongest indicators of whether someone is likely to have broadband. Blacks and Hispanics are below the national average in adoption, but blacks are more likely than average to make use of mobile devices to go on the Internet, he said.
Carol Mattey, a member of the FCC’s broadband team, said virtually everyone agrees that the current USF system needs an overhaul and will become unsustainable in the broadband world. Major incumbent wireline carriers have the largest number of rural access lines, but they aren’t deploying broadband in more-rural areas and are concentrating investment in urban parts of their service territories, Mattey said.