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Broadband's Impact

Obama to Outline High-Speed Wireless Plan Thursday in Michigan

WASHINGTON, February 10, 2011 – President Obama is scheduled to deliver a speech at Northern Michigan University, Thursday, detailing his plan to catalyze his State of the Union pledge to deliver wireless Internet to 98 percent of Americans within five years.

In addition to spurring businesses to reach the 98 percent goal, the administration’s Wireless Innovation and Infrastructure Initiative (WIII) aims to free up radio spectrum to alleviate an impending spectrum crunch, create a nationwide interoperable wireless network for public safety and drive innovation in the wireless broadband sector.

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WASHINGTON, February 10, 2011 – President Obama is scheduled to deliver a speech at Northern Michigan University, Thursday, detailing his plan to catalyze his State of the Union pledge to deliver wireless Internet to 98 percent of Americans within five years.

In addition to spurring businesses to reach the 98 percent goal, the administration’s Wireless Innovation and Infrastructure Initiative (WIII) aims to free up radio spectrum to alleviate an impending spectrum crunch, create a nationwide interoperable wireless network for public safety and drive innovation in the wireless broadband sector.

The President will deliver his speech in Marquette, a town in the upper peninsula of Michigan, where businesses have found success as a result of their access to broadband networks.  He will also see a demonstration of Northern Michigan University’s WiMAX-enabled distance learning program.

To reach the 98 percent goal, the President is expected to propose a $5 billion investment in Fourth Generation – commonly known as “4G” – wireless network infrastructure build out in rural areas.  Additionally, this investment is intended to facilitate the establishment of a nationwide interoperable public safety network, spur the development of higher-speed wired and wireless networks, and extend currently-available 3G wireless service from 95 percent of Americans to 98 percent.

With the accelerating growth of radio traffic from wireless devices such as smartphones and wireless networking devices, experts anticipate that traffic will soon outstrip the airwaves capacity to transmit that traffic, causing a “spectrum crunch.”  In response, the administration, through the National Broadband Plan (NBP) unveiled last March, vowed to free up 500Mhz of spectrum – nearly double that currently available – to alleviate the potential glut.

The administration’s plan to free up spectrum is composed of a two-fold approach.  First, it intends to use advancing technologies to help government agencies make more efficient use of spectrum.  Second, the NBP recommends so-called “voluntary incentive auctions,” whereby the government offers private licensees of spectrum financial incentives to voluntarily give up some of their unused spectrum for re-auction to wireless internet carriers.  The administration anticipates raising a projected $27.8 billion through these auctions, after incentives are paid to current licensees.

The plan also calls for investment in a nationwide interoperable public safety network, as recommended by the 9/11 Commission more than 7 years ago.  The Federal Communications Commission has been steadily working toward the rules for such a network for some time and just last month established Long Term Evolution (LTE) – one version of a 4G network – as an operating standard.  The WIII would dedicate $10.7 billion toward building the network, including $7 billion to build out the physical network, $500 million for research and development and $3.2 billion to reallocate the D-block for exclusive public safety use.

The D-block is a segment of spectrum in the 700Mhz range – considered prime real estate for mobile broadband use – that the FCC attempted to auction off in 2008, but bids failed to meet the Commission’s reserve price.  Currently, the swath is allocated for use by public safety, however, Congress is expected to consider competing plans, one to re-auction the D-block to commercial licensees to share with public safety and another to reallocate it primarily to public safety.

The administration only recently threw its support behind reallocating the D-block to public safety, an about face from the NBP recommendation that the swath be re-auctioned to raise a budgeted $2.5 billion and help contribute to the spectrum crunch solution.  Regardless of the administration’s recommendation, Congress holds the power to determine the fate of the D-block through legislative action.

The final piece of the plan includes a $3 billion investment in a Wireless Innovation (WIN) Fund, which will support research and development of technologies to take advantage of the 4G rollout in areas such as public safety, education, energy, health, transportation and economic development.

Overall, the administration projects that in addition to updating the nation’s broadband infrastructure, the plan will also reduce the deficit by $9.6 billion over the next 10 years.

Jonathan began his career as a journalist before turning his focus to law and policy. He is an attorney licensed in Texas and the District of Columbia and has worked previously as a political reporter, in political campaign communications and on Capitol Hill. He holds a B.A. in Journalism from the University of Washington and a J.D. from Villanova Law School, where he focused his studies on Internet and intellectual property law and policy. He lives in Washington, D.C., where he roots for Seattle sports teams and plays guitar in his free time.

Broadband's Impact

House Bill to Make Broadband Grants Non-Taxable Introduced

Sen. Mark Warner said last month he is working to pass a companion bill by year’s end.

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Photo of Rep. Mike Kelly, R-Penn.

WASHINGTON, December 7, 2022 – Reps. Mike Kelly, R-Penn., and Jimmy Panetta, D-Ca., on Wednesday introduced the Broadband Grant Tax Treatment Act, the companion of a Senate bill of the same name, which would make non-taxable broadband funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act.

The bill’s supporters say it will increase the impact of Washington’s broadband-funding initiatives, the largest of which is the IIJA’s $42.45 billion Broadband Equity, Access, and Deployment program. The IIJA allocated a total of $65 billion toward broadband-related projects.

Kelly said the proposal “ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment.”

“This legislation allows for existing grant funding to be spent as effectively as possible,” Kelly added.

Sen. Mark Warner, D-Va., sponsored Senate’s version of the bill in September and said last month he is working to push it through by year’s end.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” said Jonathan Spalter, president and CEO of trade group US Telecom. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose.”

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Digital Inclusion

Broadband is Affordable for Middle Class, NCTA Claims

According to analysis, the middle class spends on average $69 per month on internet service.

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Photo of Rick Cimerman, vice president of external and state affairs at NCTA

WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association. 

Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”

During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.

According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.

Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.

Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.

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Broadband's Impact

Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels

The FCC also mandated that internet service provider labels be machine-readable.

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Federal Communications Commission Chairwoman Jessica Rosenworcel

WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.

The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.

The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.

In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.

“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,”  FCC Chairwoman Jessica Rosenworcel said in a statement. 

“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products.  We’re now requiring internet service providers to display broadband labels for both wireless and wired services.  Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”

Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.

“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.

The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.

“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”

Image of the FCC’s sample broadband nutrition label

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