Broadband plan debate: federal bureaucracy or local initiative?

U.S. ranks 15th in the world in national broadband penetration

President Barack Obama stirred what was already a brewing cauldron during his recent State of the Union address when he called for all Americans to have access to high-speed broadband Internet connections.

The rhetoric of the statement is easy to understand: Better Internet across the nation can be a key factor in social and economic growth. The reality of the infrastructure of the United States is another issue.

The directive for ubiquitous broadband comes from Congress as a segment of the American Recovery and Reinvestment Act of 2009 (the National Broadband Stimulus) when it mandated the Federal Communications Commission to create the broadband plan. The FCC delivered its plan in March 2010, and since then the issue of how to go about bringing high-quality Internet to people has been hotly debated in policy and technology circles.

A debate between the architect of the NBP, Blair Levin, and a broadband industry consultant, Craig Settles, took place Feb. 7 at the New American Foundation in Washington, where a clearer picture of the concerns regarding the plan took shape. The event was co-hosted by technology blog GigaOm, where Levin and Settles had been trading criticisms in a series of submitted articles. See the video of the discussion here.

The most notable issues are related to money. The stimulus law provided upward of $9 billion for broadband developments. A lot of this money has been distributed by the FCC, The Agriculture Department's Rural Utilities Service (RUS) and the Commerce Department's National Telecommunications and Information Administration. There is also the Universal Service Fund, created by the U.S. Telecommunications Act of 1996 and administered by the Universal Services Administrative Company. Funding for the USF comes from telecommunications providers through taxing of phone, Internet and cable bills to consumers.


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“The Universal Service Fund is broken,” Rep. Terry Lee (R-Neb.) said, according to a tweet from the FCC. “It must be fixed – modernized and streamlined."

At an FCC open meeting Feb. 8, the commission voted on the proposal to transform the Universal Service Fund and Intercarrier Compensation rules from programs designed to support 20th Century voice networks to a force for expansion of 21st century fixed and mobile broadband and voice networks, while eliminating waste and inefficiency, according to the FCC’s blog. The ruling would help build the Connect America Fund to accomplish these goals.

The RUS had distributed approximately $2.6 billion to broadband initiatives through 126 plans in 38 states as of August 2010.

The NBP was originally slated to cost $33 billion, but the actual amount has become nebulous as numbers get bandied about. Part of the original number supposedly factored in $14 billion that would only go to the last 250,000 households in the plan, a high cost because of terrain difficulties in extending networks to remote areas.

“If you look at the last 250,000 homes, it was about $14 billion of it,” Levin said at the New American Foundation debate. “Huge cost to it. And, we were comfortable saying that we think that could be done later or by satellite or whatever. We are just not going to have a plan for that. So, then we had a gap of about $10 billion and we found a way to cut about $15 billion from the existing system over a 10-year period, which would pay for what we suggested to do.”

Part of the NBP calls for subsidies in poor areas to help pay for broadband from the USF.  Settles argued that each community should be able take that subsidy money in a pool, rather than dividing it among the residents, and figure out exactly what its needs are and work with the telecommunications companies to figure out a plan.

“We are talking cities, towns and counties,” Settles said. “Or it could be a group of towns or a group of counties. But it doesn't have to be the local governments. It could be the businesses come together and form a co-op. It could be that the government owns the network.”

The ways and means of connecting the country to acceptable broadband (which the NBP defines as 4 megabits/sec downlink and 1 megabit /sec uplink) is a secondary argument at this point until the issues surrounding the stimulus and USF are figured out. This is where challenges come for various agencies that could help with rollout of service or are in need for particular areas. Outside of the FCC, RUS and NTIA (which are more focused on implementation), there are the Housing and Urban Development, Health and Human Services, and Education departments.

In Settles’ view, it would make sense if HUD were a player in the NBP, as infrastructure and support for local areas fits right into its core missions, especially in the case of organizing communities. HHS and Education fit as often the “trunks” of broadband – fiber lines, coaxial cable lines, wireless solutions – in an area are focused at hub destinations such as hospitals and schools.

The fear here in the community-based approach is the bloating of an already hefty federal bureaucracy. Both NTIA and RUS grew larger when they had to deal with stimulus funds, and organizing separate communities (from series of counties or towns, as Settles said) on an individual basis would require a large workforce. But that's not necessarily the case, as Settles said in an interview Feb. 7.

“Do we have to create a monster bureaucracy?” Settles said. “The reality is that maybe it is another bureaucracy, maybe it is not. If you establish some type of uniform criteria for what it is you are looking for, you don't necessarily have to create a grandiose bureaucracy.”

There are examples on the local level of towns coming together to create broadband initiatives. Settles pointed to a number of localities that have worked with regional telecommunications company at the New America Foundation event and specifically mentioned Keene, N.Y., in the Adirondack mountains as a town with a unique challenge that solved it without federal intervention.

“Keene, N.Y., is a good example,” Settles said. “The town got together and said that 'We want these broadband services, No. 1. No. 2, we want to save our telecom company from struggling because it is a local company and if we can save them by somehow paying them to build a network, then that means the service is still a local service even if it is privately held.' The people who lived there literally passed the hat, they took up a community collection to raise money for the telco to start building a broadband network.”

Keene, a town of roughly 1,000 homes and businesses, raised approximately $563,000 to bring broadband, primarily, to every home that had a student or teacher in its school system. The details of Keene’s plan can be found here, but essentially the town banded together to raise money from the local Internet service provider with private donations and construction fees (42 percent and 23 percent of overall funding, respectively) mixed with state development funding (17 percent) and the partnership with the local telecommunications company -- Keene Valley Video and Internet (19 percent).

In creating the project itself, Keene was able to keep the cost of T1 (“last mile”) fiber connections down by being cost-conscious with material and using non-union labor. The town laid miles of coaxial lines at nearly $11,500 a mile, or about a third of the federal estimation of $36,00 a mile. The town hopes that its example, which took four years to plan and implement, can be an example for other rural areas in the country.

Outside of implementation, Levin argues that there is more to bringing broadband to the people than just raw data speeds. After all, the four megabits down and one megabit up speed goals are really not that fast in comparison to urban areas that can see more than 25 times those rates. Where Levin and Settles agree is that areas should have the infrastructure but also the knowledge and planning of what they want to do with broadband.

“I would say that the thing we are going for is a ubiquitous, diverse and constantly evolving ecosystem of networks, applications, devices and most important, perhaps forgotten in it all, are people who know how to use it,” Levin said.

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Reader comments

Wed, Feb 9, 2011 Dennis Mobile, AL

I don't believe in using taxpayer money to develop infrastructure that is handed over to the private sector to own and operate.

Wed, Feb 9, 2011 RayW

The people have tried local initiative, however the big commercial concerns who claim that there are reasons why they can not do the job tend to get laws passed prohibiting or creating ruinous rules that make local initiatives next to impossible. And if they can not, then they use the areas where they have a monopoly and charge as much as they can to subsidize below cost rates to ruin competition.

Having the Federal Government involved will not help, they tend to go with the groups that can afford to provide 'perks' (aka bribes) to funnel the money 'appropriately', just like we have seen with the Universal Service Fund as mentioned in the article. And at the Federal level, this type of activity has a much harder time being held accountable than if it worked at a local level, assuming certain industry paid for laws are repealed to allow a true system to be setup and maintained, not just cherry picked.

Also, codifying the speed of "High Speed" limits implementation of new technology and requirements and encourages the established monopolies to maintain status quo based on the "official" rules. 4/1 Meg is actually outdated based on what Microsoft and the various video rental streamers want to do. Plus look at the picture taking ability the common folks have today and is coming and the size of files that can be created just to email grandma the latest and best baby pictures/movies.

Wed, Feb 9, 2011 martyqick

Yeap. In fact, did you know that Currently, many insurance companies do not allow adult children to remain on their parents' plan once they reach 19. Companies cannot do that any more. Search onilne for "Wise Health Insurance" and you can insure your kids if you are in the same boat.

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