Broadband Fund: What I Would DoThursday, January 15, 2009
As the new FCC begins to take shape and the lobbyists circle the Hill in large numbers, it appears as though a broadband fund will be created from the bailout package. Various reports put this fund at between $30 and $50 billion, and the goal is to make sure everyone who lives in the United States has access to broadband.
Activity is high and opinions run the gamut of possibilities. Intel is busy on the Hill promoting its idea that WiMAX is the right solution for a network, M2Z, of course, wants to use the AWS-3 spectrum, others want the 700-MHz D Block, which is the shared commercial/first responder spectrum, but they want to use it to extend broadband to all, and I recently wrote a white paper suggesting we address the economic issues rather than establish a single, new network.
Once the money is allocated, and I think it will be, we will find out who will administer the fund. Rumors are that it will be the NTIA (the federal agency that oversees all government spectrum), but it could be any number of agencies. There will be more demands for the funds from more interested parties that believe they can provide broadband to all.
I would use the money in a variety of ways. According to data Twice collected from the FCC website and other sources, 75.8% of the landmass and 99.8% of the U.S. population has access to at least one wireless voice network. I think that number is too high, but even if the correct number is 90%, that would mean that more than 272 million of the nation's 303 million have wireless voice coverage today.
We should use this as a starting point, spending some of the money on adding 3G technology to all cell sites that are currently capable of voice and slow-speed data. In order to do this, we have to find a way to provide cell site equipment to the network operators, pay for its installation and opex expenses and, even more difficult, provide backhaul capable of carrying high-speed broadband from each cell site back to the network. This could be done in a number of ways. We could add more T-1 lines capable of 1.544 Mbps-a typical rural site might need 2-4 lines. Where possible, we could use fiber, microwave, or even satellite for backhaul, and instead of a blanket choice, we would use the appropriate solution depending on the location and the capabilities available in the area. We would also need in-home wireless modems that could be deployed with or without a truck roll (many rural power companies and telephone companies already have trucks in the field if a truck roll is necessary).
This would give much of rural America home and business access with data speeds in the 1-2 Mbps range as a start, which is a lot better than what they have available via dial-up. At the same time, we would look at extending the range of DSL, perhaps cable and, where needed, deploy two-way satellite links either directly to the home or to a cell site, and the last mile or so could be via WiMAX or some other point-to-multipoint service.
To extend our coverage beyond that, we would make use of right-of-ways held by rural power companies, telephone companies, railroads, and perhaps even pipeline systems that crisscross our nation. Without too much trouble, we could add cell sites where needed quickly and less expensively than having to build out a complete network of new cell sites. Broadband to small towns could be supplied by providing backhaul and then extending the voice wireless systems or by deploying WiMAX to provide service to the homes and businesses along Main Street USA.
With a combination of funding and tax credits for the companies involved, all of this could be done in only a few years. And because we will be starting with existing voice networks and enhancing them rather than building new networks, the costs for this stage of extending broadband would be significantly reduced. Again, the idea is not to build one super network taking ten years to deploy, but to take advantage of what is already in service and extending it in a more cost effective way, with backhaul services being the most expensive element.
Once this is in place, the next step would be to upgrade the broadband service to next-generation speeds over the course of the next few years as the equipment becomes available and prices come down.
If the public safety/commercial D Block is auctioned, the commercial winner should be incented to build out rural locations, preferably working with incumbent operators in each area. Shared networks are being put together in the UK and elsewhere. If we can get past the politics and a few business issues, with network sharing, we could speed up broadband deployment here.
So rural America would start with 3G as an extension of today's networks and then migrate over time to next-generation services, but that only solves part of the problem. The second group of underserved customers is made up of those who live in areas where one or more types of broadband are already available but they have chosen, usually for economic reasons, not to avail themselves of the services.
These people have broadband running down their street or floating around in the air, but they don't have the economic means to purchase a computer or other Internet access device and they cannot afford to pay the monthly fee, which today can be a low as $20 per month. The question as to how to connect this segment of the population is purely economic. The government could subsidize the device and service and it could incent broadband operators to offer service at an even lower rate or, in some cases, for free. But there must be a way to underwrite these costs. Ad-based services won't work because the population base we are talking about here is not one of the demographics sought after by the advertising community at large, so it will boil down to crafting several different economic packages to connect as many of these people as possible.
There is one final segment of the U.S. population that will never have broadband-those who don't want it and don't think they need it. For the most part, these people don't have wireless phones today, preferring to live in a less connected world than the rest of us.
Providing broadband to all in people the United States who want it is an important goal that we can accomplish. But it will be less expensive and faster to reach if we use funds allocated for broadband for all in a variety of ways to enhance and expand existing networks instead of spending it all on one new network that will take ten years to build and still will not reach everyone.
For more on this subject, see my new white paper, "Broadband for All Americans."
Andrew M. Seybold