How to Spend the Infrastructure $$ in the U.S. Stimulus Package (Part 1): Broadband for All?

As the U.S. government wrestles with the final shape of its economic stimulus package, there is much talk about investing in infrastructure, including technology infrastructure, as a way to jumpstart our economy.

One of the key themes that Barack Obama has promulgated is providing broadband access to all Americans. The Obama/Biden position is laid out on the barackobama.com Web site:

“Deploy a Modern Communications Infrastructure

Deploy Next-Generation Broadband: Barack Obama believes that America should lead the world in broadband penetration and Internet access. As a country, we have ensured that every American has access to telephone service and electricity, regardless of economic status, and Obama will do likewise for broadband Internet access. Obama and Biden believe we can get true broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation’s wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.”¹

There are over 100 million people in the U.S. that do not have broadband Internet access. Although Americans are usually credited with “inventing” the Internet, we have fallen woefully behind most of the rest of the developed world in household deployment of broadband Internet access. I agree with the Obama team that making broadband Internet access available to all U.S. residents (and visitors) would help stimulate our economy. There are both short-term and longer-term benefits. In the short term, there’s the investment in computers, cabling, towers, set-top boxes, and jobs for smart local people to hook everyone up. By bringing broadband Internet access to more people, we’ll empower young and old, rich and poor, urban and rural. We’ll give small businesses in rural areas the opportunity to thrive locally while selling globally, and we’ll make it easy for more people to work from their homes. In the longer term, we’ll improve the level and quality of education and knowledge of our citizenry.

It’s one thing to have an intention; it’s another to have a plan. The best plan I’ve seen to-date, IMHO, is the one being promulgated by my brother, Andy Seybold! Andrew Seybold is a leading expert in mobile and wireless communications. His opinions and his track record are well-respected by executives in the world’s mobile phone companies, by emergency communications professionals in local and state governments, and by many of the leaders in the IT industry. One of the things that makes Andy’s advice so valuable is that he is very involved with the emergency communications practitioners—the so-called “first responders” in our nation’s communities.

My Brother’s Advice to the FCC re: U.S. Broadband Access

You can find Andrew Seybold’s plan in his white paper, Broadband for All Americans, published on December 30, 2008 and in his Open Letter to Acting FCC Chairman Michael Copps, published in Andy’s blog on Tuesday, January 27, 2009.

In his white paper, Andy describes the complicated thicket of intertwined issues in this way: “We have a number of issues that have to be addressed: making access available where it is not, making it affordable to more of our citizens where we already have it, and how to equip those who want to take advantage of broadband with devices so they are able to use the service.”

He goes on to say: “Each of these varies according to the situation. Inner city citizens probably already have [physical but not economic] access to broadband over cable, DSL and wireless services if they can afford to pay for it and understand how important it has become to have access not only for themselves but for their children. Many who live in rural America are limited to access via standard dial-up services or two-way satellite services, which are expensive, and even satellite service is not available to everyone.”

He points out that “those who look at these issues from the Internet side of the fence,” [Andy looks at things from the wireless providers’ point of view], are convinced that being able to provide low-cost or free Internet to the entire U.S. population would solve the problems in both metro and rural areas, and they blame the cable, wired and wireless network operators for making broadband too expensive where it is available and for not being willing to build it out where it is not yet available.”

We Need to Address Two Separate Issues: As Andy explains, there is an urban problem and a rural problem. The two are different and need different solutions.

1. “The first [typically urban/suburban] problem is how to make broadband available to those who already have access to it, but, for whatever reasons [cost, lack of computers, lack of training or interest], have not taken advantage of it.”

2. “The second problem is how to deploy broadband in rural areas where the number of people per square mile makes deploying any technology economically unfeasible.”

Debunking the Technical Alternatives. Andy calls his plan “a fresh approach that focuses on economics, not technology,” yet you’ll find answers to many of your questions about technology in his plan. For example, I found useful answers to these questions:

• Why have all the municipal WiFi initiatives failed? (No economic model, deployed on unlicensed spectrum, need constant upgrading, too much interference.)

• Why can’t we deliver broadband over power lines? (Expensive to deploy, too much interference with other radio services.)

• Why can’t we use mobile telephony to deliver Internet access in rural areas? (2G networks; upgrading to 3G is expensive, need more cell towers to handle wireless broadband, population density doesn’t justify the investment.)

• Can we use the “white space” from unused TV channels to provide free or low-cost broadband? (Equipment will need to be smart and highly localized and therefore expensive, unlicensed spectrum leads to interference issues.)

• What’s all the fuss about AWS-3 spectrum? And will it really enable us to provide broadband access to 95% of the country with 25% free (no cost) broadband in 10 years? (The data speed for the free broadband will be limited to 786 Kbps and probably won’t be available until the end of the 10-year period.)

• Can we leverage the spectrum to be used by rural first responders to piggyback broadband Internet for rural geographies? (Yes, these two services could co-exist, taking advantage of existing towers, by using 700 MHz spectrum.)

What I like about Andy’s approach are three things:

1. It’s immediate—there’s no waiting around for new technology or regulatory relief.

2. It’s not dependent on a single player or a single technology; so it’s a win/win for most of the incumbent players—phone companies, wireless companies, cable companies, satellite companies and alternative approaches (including the little guys).

3. It makes important distinctions between economic issues and technology issues, and between solutions for rural and urban users.

Here’s my oversimplified gist of his recommendations:

Leverage Existing Services and Assets in Rural Areas

Andy Seybold believes that rather than a “one size fits all” solution for rural America, a more realistic solution is to inventory and leverage the services and assets that are most economic in each rural region. He provides a list of 10 different types of services and assets that can be used alone or in combination to provide cost-effective approaches to broadband Internet access for rural areas. One that Andy describes in the most detail (and is obviously enthusiastic about) is the use of the 700 MHz D-Block of spectrum for rural America. “The network could be built using towers and right-of-ways already in place. These would include existing cell sites, power companies’ high-tension electric towers, existing railroad right-of-ways… The network could also be co-located with existing local first responder systems, statewide communication systems, and federal radio systems where available.”

Don’t Increase the Number of Providers in Metro Regions; Increase Subsidies for Access by the Economically Disenfranchised

Today, most of the attention in Congress and the FCC is on enabling more competitors to enter urban markets in order to reduce costs through competition. However, Andy points out that in most urban markets, there are (or will soon be) 14 to 16 providers vying for consumers’ Internet business. “The question that should be asked is not how much lower will having fourteen to sixteen providers in a given area drive the price of service, but rather how long can fourteen to sixteen suppliers competing for the same customers survive, and how will having fourteen to sixteen suppliers of broadband in a given city help those who are not able to pay for service? If the object is to make broadband access free to those who cannot afford it, then the federal government should be able to find a way to enable existing broadband companies to provide this level of service. It could be through tax incentives, direct payment for these services by the government, or some other method.”

1) http://www.barackobama.com/issues/technology/#modern-communications

Comments

[Erik]

In respect to broadband access and the "need" to subsidize it shouldn't you be asking whether, in the basket of goods that could be subsidized, whether broadband access of all things gives you the most economic opoortunity for the buck? One might argue that, for example, it would be FAR better to provide urban poor with subsidies for high quality childcare, offering partents greater flexibilyt to find and retain employment.