May 4, 2009

National Broadband Policy needs concrete goals to succeed

On April 8, 2009 the FCC issued its Notice of Inquiry (NOI), "A National Broadband Plan for Our Future", seeking input to inform the development of a national broadband plan. The focus of the plan is to enable the build-out and utilization of high-speed broadband infrastructure with the goal of enabling every American citizen and every American business access to robust broadband services. This National Broadband Plan is required as part of the American Recovery and Reinvestment Act (ARRA) of 2009 and must be delivered to Congress by February 17, 2010. The NOI is allowing 60 days for comments and an additional 30 days for reply comments, leaving the Commission just seven months to develop a plan that will undoubtedly have a profound impact on the entire Telecommunications industry.

Based on the volume of requested input it seems unrealistic that the FCC could develop such an important piece of legislation in such a short period of time. Additionally, it seems impractical to develop a National Broadband Plan without the benefit of data collected by the Broadband Data Improvement Act (BDIA), which will not be available until early 2011. But perhaps the more relevant issue is the continuing lack of focus. Is the goal to increase availability of broadband or to increase the usage and adoption of broadband?

Successful National Broadband Policies across the globe have three distinct features: (1) Definitive goals to provide "x" bandwidth to "x" percent of population by "x" date; (2) some form of government financing; and (3) telecom policy that supports the goals of the plan. In addition, many of the plans also have specific goals related to broadband adoption, not just availability, and develop government policy and programs to support those goals.

Another key element of most National Policies is the fact that a market analysis detailing the competitive environment, the market position of the incumbents, availability and affordability of broadband has been undertaken ahead of policy making.

Although the United States is tackling some of these issues, the components are out of synch. The broadband mapping component is absolutely critical to the development of any plan or policy – yet it will not be available until February 2011. Furthermore, there is no current agreement on exactly what type of data should even be collected.

Without a clear understanding of the true "state of the market" how is it even possible to decide what needs to be done? Additionally, unlike most countries which developed their policies during the early stages of broadband deployment, the United States has chosen to undertake theirs when over 70 million broadband lines have already been deployed and penetration is at 60 percent. This is a massive undertaking considering that the United States is the second largest broadband market, the 3rd largest housing market and has a geography that is one of the most diverse in the world.

The broadband stimulus has been a catalyst for the U.S. to revisit its broadband programs. Although the FCC and Congress have long recognized the value of broadband to the economy, its regularly changing broadband policy over the last decade has done little to reduce prices and/or increase the quality of broadband services. In fact, my own monthly broadband fee has steadily increased over the last 10 years.
 

What is the role of the states within this National Broadband Plan? Will the FCC be given authority to overrule any regulation that impedes a National Broadband Plan, such as the varying rules related to municipal telecommunication networks?

At this stage, there are more questions than answers. Nonetheless, the FCC and the U.S. government have the rare opportunity to press the restart button and finally set a policy and plan that can truly place the U.S. in a leadership position.

A U.S. National Broadband Plan must focus not only on the fixed broadband infrastructure, but fully account for the ongoing developments in wireless broadband, particularly LTE and WiMAX. As such, this plan must detail near, mid and long-term goals with respect to not only the desired services, but the infrastructure and associated parameters required to support them. This plan must focus beyond the last-mile and take into perspective the entire end-to-end broadband infrastructure. Similar to Korea, any network that is part of the National Broadband Plan should be a Quality of Service-guaranteed multi-media network that offers integrated services of communications, broadcasting and Internet ubiquitously, continuously and securely.

Given the large investments most likely to be required, it will be important for the FCC and Congress to clearly define the roles of both Government and private industry, because any National Broadband Plan will require some form of public-private partnerships to work and must be supported by ubiquitous policy (same across all states) to insure its success.

From a financial perspective, the National Broadband Plan will require tax incentives, such as credits or accelerated depreciation schedules, to spur the necessary investment required for what will likely be a highly advanced next-generation broadband infrastructure. An example is Malaysia, in which the Government recently approved a 100 percent investment allowance on capital expenditure incurred by the last mile network facilities providers for broadband infrastructure to provide broadband services. This incentive is applicable for investment made and equipment purchased from 8 September 2007 until 31 December 2010 – the time frame for the build out of its National High Speed Broadband Network.

While broadbandtrends applauds the FCC's effort to deliver a national broadband plan that seeks to ensure that every American has access to broadband capability, it must take further steps. Access itself is not enough; it must focus on increasing adoption as well.

Instead of sifting through what is likely to be thousands of pages of comments, perhaps the FCC should have establish a blue-ribbon task force with participants from all facets of the broadband industry – equipment vendors, broadcasters, CPE manufacturers, Internet Service Providers, ILECs, CLECs, MSOs, etc. to develop its plan.

Additionally, it would be prudent for all parties involved to delay the delivery of such a plan until data from the BDIA is available so that the FCC has the most accurate inputs before setting any benchmarks.

Without this, the FCC should instead focus on delivering a framework for a National Broadband Plan rather than the plan itself.

Teresa Mastrangelo is principal analyst with broadbandtrends.

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