FCC plan would greatly expand broadband Internet connections

By Cecilia Kang
Washington Post Staff Writer
Tuesday, March 16, 2010; A01

The Federal Communications Commission announced on Monday its long-awaited plan to bring broadband Internet connections to every home and business in the United States, part of an ambitious, multibillion-dollar attempt to create a new digital infrastructure for the nation's economy.

The national broadband plan outlines dozens of policy recommendations aimed at raising the portion of people with high-speed Internet connections to 90 percent, from the current 65 percent, over the next decade and significantly increasing the connection speeds of homes with such service.

Mandated by last year's stimulus legislation, the plan will be presented to Congress on Tuesday and is widely expected to set the FCC's agenda for years to come. It would move the commission squarely into the age of the Internet, creating a federal mandate for installing thousands of miles of new fiber-optic cable and erecting many cellphone towers.

Many of the FCC's proposals are short on details, and lawmakers and the agency can accept or reject any number of the ideas.

"The real test begins now, and the final grade will depend on the commission's execution of future proceedings that will be required to transform the national broadband plan into reality," said Andrew Schwartzman, president of Media Access Project, a public interest group.

The proposal drew praise from some industry leaders and public interest groups, who said the plan could introduce more competition into the market for broadband services and help bridge a digital divide that has excluded low-income and rural residents from the Web. But analysts and telecommunications scholars said carrying out the dozens of recommendations will be difficult, particularly if companies argue that new regulations will hurt investments and jobs.

Mid-size broadband providers, such as TW Telecom and Cbeyond, are shaping up to be the plan's biggest beneficiaries, gaining access to more subscribers and the rights to federal funds to expand their networks. Makers of network equipment, such as Cisco, and creators of Web-based content, such as Google, could also experience significant boosts in their business. And cellphone carriers could reap big gains from a proposal to allocate a large chunk of airwaves for the next generation of smartphones and portable devices.

Major providers, such as AT&T, Comcast and Verizon Communications, would gain broader subscriber bases, but they could be forced to share their wireless and fixed-wire networks with smaller rivals.

The plan could hurt broadcasters, who are being asked to give up the airwaves destined for wireless broadband use. Some reforms that would introduce more competition among Internet service providers could also force them to share their wireless and fixed-wire networks with rival newcomers. Even major Internet service providers could face stiffer competition.

Comcast's senior vice president of external affairs, Joe Waz, wrote in a blog post that the company agrees with most of the ideas in the plan. But the nation's largest cable and Internet service provider said the plan needs to "maintain the light-touch regulatory environment essential to promoting investment."

Rep. Cliff Stearns (Fla.), the ranking Republican on the House Energy and Commerce communications, technology and the Internet subcommittee, told the agency to stay focused on bringing access to people who don't have it.

"I am concerned, however, that the plan may contain stalking horses for investment-killing ideas, such as so-called net neutrality mandates or a return to outdated, monopoly-era regulation," he said.

The FCC said it would fund its proposals by tapping an existing $8 billion annual fund for providing phone service to rural areas. In the past, rural carriers that rely on the fund successfully opposed attempts by lawmakers and the agency to redirect its resources.

The agency would also seek up to $16 billion from lawmakers to build and operate a dedicated network for public safety responders. The agency said it could raise more money from auctioning the spectrum intended for wireless use.

The United States has fallen behind other developed nations in the deployment of high-speed Internet. Some global rankings put the United States at 16th in terms of access, speed and affordability behind nations such as Japan and Australia. South Korea offers 100-megabit-per-second connections to nearly all of its population; most U.S. broadband subscribers have connections that average 3 to 4 megabits per second. The FCC's plan envisions bringing 100-megabit-per-second access to 100 million homes by 2020, as well as 1 gigabit-per-second connections to libraries and schools.

Looming over the agency's months-long effort to come up with the plan has been a threat to its authority over broadband services stemming from a court challenge by Comcast. The case is before a panel of federal appeals court judges, who recently questioned the FCC's jurisdiction during arguments in the case. The agency has said it will continue to defend its authority and would consider formally reclassifying broadband as a common carriage service, like phones.

"There are big elephant-in-the-room issues like reclassification," said Rebecca Arbogast, head of research at Stifel Nicolaus. "Reclassification won't affect every component of this plan, but it's a broadband plan, and reclassification goes to the heart of the commission's ability to regulate broadband."

Arbogast noted that the proposals to increase competition and adoption rates among low-income and minority communities will be well received by Congress.

The FCC has proposed creating a free wireless network for lower-income users to access the Internet. It would also collect market data on prices and connection speeds to verify whether broadband providers are living up to their advertised promises.

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