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Obama’s Third Generation of Broadband Policy and the Universal Broadband Imperative

in Broadband Stimulus/Broadband's Impact/FCC/National Broadband Plan/NTIA/Rural Utilities Service/Universal Service by

WASHINGTON, August 22, 2011 – The beauty of the internet has always been the disconnection of content and infrastructure.

Landline phone service was a one-to-one medium. It required the phone company’s infrastructure of wires and switches and telephones. Broadcast television was one-to-many. It relied upon the towers and transmitters of the broadcasters, plus a standard-issue television.

Let alone the fact that today we largely watch televisions connected to wires, and largely talk into mobile phones untethered to Ma Bell’s cords. There is the wealth of many-to-many communication through the multiplicity of applications that make the internet what it is today.

None of this, of course, is new – until one considers Washington’s subsidization schemes.

What’s new is what’s next. And in the evolution of telecom and technology policy in Washington, a big debate is coming about the modernization of the Universal Service Fund into a Universal Broadband Fund.

Why the Internet’s Layers Need Each Other

There may be some yawns among those of you reading this. But think: we spend time online because of the content, the games, the Facebook updates and iPhone utilities that make us more productive or entertained or engaged. This is content. Think of it as the good stuff at the top of the internet layer cake.

Cut through the candles and the icing and we’re surrounded by internet protocols and open standards that, thank goodness, generally work well together. This is the “glue” that keeps us online.

All of the content and software and internet protocols rest on a physical base. This is the layer of wires, cell towers, “middle mile” connectivity and of transceivers that make all the connectivity possible.

This is infrastructure, and we need more of it. We need better and faster infrastructure. We need it to get us to universal broadband connectivity. And because broadband’s capabilities are always increasing and evolving, we’re going to get more good stuff on top of a layer cake with a bigger platform.

Obama’s First Two Broadband Eras

What about to happen is nothing less than a new era in Washington’s broadband policy.

There is no doubt that the 2008 presidential campaign opened up a dialogue on broadband. This was followed in early 2009 by congressional and executive branch action on broadband. And if we follow the guide of Moore’s law, in which technological progress marches forward with a new generation of processing power 18 months, we’re now entering Obama’s third generation broadband policy.

First, from the election until early 2010, we saw the “broadband stimulus.” The American Recovery and Reinvestment Act, passed February 17, 2009, allocated approximately $7.2 billion for broadband investment. Although about $300 million of these funds were later rescinded by Congress, the vast bulk of these dollars were appropriated for infrastructure investments.

In particular, the U.S. Department of Commerce put a focus on high-speed “middle mile” connectivity through comprehensive community infrastructure investments that are now rolling forward throughout the states. The U.S. Department of Agriculture, which was already experienced in administering broadband loans as part of its Rural Development portfolio, received significant new funding for remote-area broadband projects.

The Recovery Act also put in place the seeds of the next phase of Obama’s broadband policy — the National Broadband Plan. Issued in March 2010, the Federal Communication Commission’s plan had many critics. Some called it too ambitious, or at least too long at 376 pages. Others insisted its speed and coverage goals were not aggressive enough.

I think the plan’s brilliance lies in its framing. Its Part I on “Innovation and Investment” hearken to competition and spectrum policy. I’ll discuss Part II, “Inclusion,” and its focus on universal broadband in a moment. But in Part III, the National Broadband Plan put “national purposes” into a broadband focus. By linking Health Care, Education, Energy and the Environment, Economic Opportunity, Government Performance, Civic Engagement and Public Safety to better broadband, the plan did a real service. It set the agenda for the infrastructure of public and private institutions that are seeking to ensure that broadband is meaningfully used by all.

In turn, the FCC relied upon the work performed organizations such as the U.S. Broadband Coalition led by Jim Baller, by the Benton Foundation, and by the now-defunct Knight Center for Digital Excellence.

The Next Broadband Policy Topic: The Universal Broadband Fund

The next major battle over broadband policy will be over the future of the Universal Service Fund. It’s telling that the Universal Service Fund spends more than $8 billion each year on providing telephone connectivity to rural areas, and also to low-income individuals. Two other components of the Universal Service Fund offer internet connectivity to schools and libraries, and to hospitals and health care centers. This amounts to more, on an annual basis, than Obama’s one-time investment in broadband infrastructure.

How the Universal Service Fund should be reconfigured is, as of now, up for grabs. The existing mechanisms in the Universal Service Fund have been criticized by academics and by economists. In their eyes, it wasn’t cost-effective at meeting its telephone-connectivity mandate. Now the mandate itself needs to be different.

At the Broadband Breakfast Club last month, “Making the Universal Service Fund into a Universal Broadband Fund,” BroadbandBreakfast.com hosted experts from a range of stakeholders, including Russell Hanser of Wilkinson Barker Knauer, Hank Hultquist, vice president of federal regulation for AT&T, Joshua Seidemann, director of policy for the National Telecommunications Cooperative Association, Michael Spead, senior technical specialist for broadband at ICF International, and Darrell M. West, vice president and director of governance studies at the Brookings Institution.

Three key points emerged from the debate.

First, unlike plain old phone service, there is a multiplicity of technologies, and a multiplicity of business models, in broadband connectivity. That means the government needs to be clearer about what it wants when it comes to universal broadband, said Hank Hultquest of AT&T.

Second, not every consumer is going to wants or needs a land-line phone. A new broadband connectivity fund may identify consumer and offer them a choice between land-line phones, mobile phones, or broadband access, said Darrell West of Brookings.

Finally, several panelists alluded to the possibility of a new digital divide: between low-speed broadband, such as 5 Megabits per second (Mbps) or less, and higher-speed broadband, such as 45 Mbps.

Watch the debate online.

Remember that getting to universal broadband connectivity, by itself, won’t do anything. Just as telephone wires and broadcast towers’ value was limited by the people with whom you could talk, or the shows that you could watch.

But because of the internet’s protean nature, and because of the vastness of its nooks and crannies of content, it is and will remain far more useful and important for individuals, for businesses and for the anchor institutions of our society.

Making sure that the good things offered by the internet are available and accessed by all is the true next challenge for our nation’s broadband policy.

Drew Clark is the Chairman of the Broadband Breakfast Club. He tracks the development of Gigabit Networks, broadband usage, the universal service fund and wireless policy @BroadbandCensus. He is also Of Counsel with the firm of Best Best & Krieger LLP, with offices in California and Washington, DC. He works with cities, special districts and private companies on planning, financing and coordinating efforts of the many partners necessary to construct broadband infrastructure and deploy “Smart City” applications. You can find him on LinkedIN and Twitter. The articles and posts on BroadbandBreakfast.com and affiliated social media are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

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