Who Will Buy … a National Broadband Plan?

FCC Workshops, National Broadband Plan October 6th, 2009

, Reporter-Researcher, BroadbandBreakfast.com

WASHINGTON, October 1, 2009 – For the national broadband rollout, the big question is who will pay for it? Phil Bronner, of Novak Biddle Venture Partners, challenged investors to make the national broadband happen at an October 1 Federal Communications Commission workshop.

“We have been on innovation and we must see the fundamental shift that will make national broadband a reality. Technology is a risk, but even business is a risk too. We cannot stop now.”

Other panelists echoed calls for investment in the national broadband plan. FCC Chairman Julius Genachowski said that every dollar invested in broadband leads to tenfold returns in the economy.

There is tremendous potential for free speech and free enterprise through broadband, and high speed network will bring a robust communication, said Thomas Aust, a senior analyst at GE Asset Management.

“The issues around broadband are subtle, with investors asking for surety before they put their money,” Aust added. The notion that the government can and should make broadband better though regulatory management is not enough.

Also at the panel, investors voiced concern about the need for capital commitment because they want to know the new telecom rules,  and that those rules will not change.

“Larger telecommunications companies and cable [operators] have publicly complained regarding reporting requirements and restrictions associated with the current stimulus plan,” said Christopher King, a principal telecom analyst at Stifel Nicolaus. He also stated that long term regulatory certainty should include Net neutrality mandates.

Still, Anna-Maria Kovacs, president of Regulatory Source Associates LLC, called broadband a high-risk investment. Investors would want to know if they can make money out of investing in broadband. The problem of investing in broadband is mainly in the rural areas – which is where most capital would be needed.

“If you cannot raise capital and pay expenses of providing network, you cannot provide services to consumers,” she said.
Monish Kundra, venture partner at Columbia Capital, agreed that attention needed to be paid to unserved areas.

“Part of FCC policy can be to allow for a single point of access for those in rural areas,” said Kundra.

He advocated positive regulation which would free up a lot of spectrum for users. He opted for investing in broadband, citing the 10-fold multiplier effect that Genachowski referred to earlier.

Workshop presentations and video.

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