Speedy Internet Service Is an Issue Moving Fast for Incoming Administration
Tuesday, January 13, 2009
President-elect Barack Obama's plan to give the entire country speedy Internet service while creating thousands of telecom jobs as part of his stimulus package has come up against a seemingly simple but contentious question: How fast is fast enough?
The Independent Telephone and Telecommunications Alliance, a trade group representing mid-sized carriers such as Qwest, is pushing for stimulus aid to build networks in rural areas offering download speeds of 1.5 megabits per second. Such a speed would do little to cure the herky-jerky quality of YouTube clips and would make transfers of e-mail with large attachments slow at best.
Labor union Communications Workers of America has called for tax credits or other incentives in rural and other underserved areas for speeds not much faster -- at 3 mbps, not enough to do video conferencing.
Members of the National Cable and Telecommunications Association, which includes Comcast, already had such upgrades in their business plans for this year, even though they have called for tax and other incentives that would help them extend their fastest service that would provide 50 mbps downloads, enough to watch high-definition video over the Web.
That has provoked complaints from public interest groups such as Public Knowledge and Free Press that networks should not use stimulus money for expansion they had already planned, but instead should use it to pursue Obama's goal of the "finest and most modern communications infrastructure in the world."
To achieve that, the groups say, means a stimulus plan with clear oversight, which would also encourage smaller competitors to giants AT&T, Verizon and Comcast to build new networks at speeds as fast as those offered in better-wired nations such as Japan and South Korea and much of Scandinavia.
"You just can't shovel money at the incumbents because these companies will take advantage of the situation and turn this into a boondoggle," said Art Brodsky, a spokesman for Public Knowledge. "They aren't even willing at this point to extend the most minimal broadband service to people so how can we believe them now?"
The trade groups argue that they need the incentives -- which may come in the form of tax breaks, grants or bonds -- because carriers otherwise wouldn't have the capital to build out to rural areas or upgrade existing networks to offer speeds comparable with leading broadband nations, where high-definition video teleconferencing and multiplayer online gaming are available to most residents. Through their trade groups, the companies say stimulus aid would be used as a first step toward providing cutting-edge broadband service.
"Establishing too high a bar for eligibility in these areas could have the perverse effect of deterring any investment there, depriving those areas of jobs in building out broadband and perpetuating the lack of broadband service rather than remedying it," NCTA president Kyle McSlarrow wrote in a Dec. 22, 2008 letter to Susan Crawford, Obama's transition official overseeing the review of the Federal Communications Commission.
Lawmakers are wary of any incentives that would appear to bail out an industry that is still cash-rich compared with other sectors such as banking and automobile manufacturing.
"The commercial providers can do better and if they are going to receive any government resources to deploy broadband, they need to meet higher standards," said Rep. Rick Boucher (D-Va.), the new chairman of the House Subcommittee on Communications, Technology and the Internet.
Obama's transition team hasn't weighed in specifically on the speed debate. "The president-elect is committed to renewing America's leadership in broadband. Obama and Biden are working with their technology advisers and members of Congress to determine how the economic recovery package can advance that goal as they also develop a comprehensive strategy for making broadband accessible to every community in America," said Jen Psaki, a spokeswoman for the transition team.
In Japan, residents have access to speeds of least 50 mbps and in many cases 100 mbps at an average cost of $30 a month. In contrast, the FCC defines broadband Internet as 768 kilobits per second, the basic speed for standard e-mail and basic Web surfing but too slow for clear video streaming.
Verizon offers 50 mbps with its fiber optic network called FiOS, and Comcast has plans to upgrade networks to offer similar speeds through its Docsis 3.0 technology. Wireless technology won't offer comparable speeds but many wireless companies are calling for stimulus aid to include wireless high-speed data networks, which may be less costly to deploy to rural and other underserved areas, analysts said.
"Speed is being talked about a lot and is tough to legislate because the policy goal is to stimulate what wouldn't otherwise happen without government intervention," said Rebecca Arbogast, a telecommunications analyst at investment firm Stifel Nicolaus. "But you also have to balance speed with heft in a way that doesn't solidify a particular market structure like telecom and cable and make it more difficult for new entrants."
Public interest groups and some high-tech companies warn, however, that by simply calling for incremental upgrades that don't require major rebuilds -- digging new trenches to lay down fiber and putting up thousands of new cell towers for the fastest wireless connections -- stimulus aid would not result in massive creation of new jobs that Obama has promised.