By Cecilia Kang
Washington Post Staff Writer
Thursday, February 10, 2011; 10:41 PM
MARQUETTE, MICH. - In this remote snow-swept college town rejuvenated in part by Internet commerce, President Obama outlined a plan Thursday to create similar economic stories through the expansion of super-fast wireless Internet connections.
Speaking at Northern Michigan University, Obama said he would use $18 billion in federal funds to get 98 percent of the nation connected to the Internet on smartphones and tablet computers in five years.
To get there, the federal government will try to bring more radio waves into the hands of wireless carriers to bolster the nation's networks and prevent a jam of Internet traffic. He said he hoped to raise about $27.8 billion by auctioning airwaves now in the hands of television stations and government agencies.
And with that auction money, the government would fund new rural 4G wireless networks and a mobile communications system for fire, police and emergency responders. The remaining funds raised - about $10 billion - would go toward lowering the federal deficit over the next decade. The Congressional Budget Office has said the deficit will climb to $1.5 trillion this year.
First outlined in Obama's State of the Union speech, the plan is part of a push to reshape the nation's infrastructure of deteriorating roadways and manufacturing plants into one with high-speed railways and high-speed Internet networks that the president said are essential for the United States to compete in the global economy.
"To attract the best jobs and newest industries, we've got to out-innovate, out-educate, out-build and out-hustle the rest of the world," Obama said in his speech.
The president chose to visit Marquette because of the town's success in attracting commercial partners such as Intel to build a mobile broadband network based on WiMax technology on the university campus. Northern Michigan University partnered with towns nearby to expand cell towers so elementary schools, police and residents could also access wireless networks fast enough to access streaming videos without a wired connection.
Experts say Obama's plan is ambitious and complicated and relies heavily on the participation of cautious television broadcasters, who are loath to give up their greatest asset: spectrum.
Specifically, $10.7 billion would fund a new public-safety network so first responders from various emergency services can communicate on one system, sending video files and e-mails during disasters and national security threats.
The administration also plans a one-time allotment of $5 billion from a federal phone subsidy to expand wireless broadband in rural areas. About $3 billion would go to a government research program that would develop methods for using mobile Internet access for emerging technologies and for health, education and energy applications.
The plan does not detail how much money it would return to broadcasters who give up airwaves in voluntary "incentive auctions." The administration has promised that those television broadcasters would get a cut of the proceeds but hasn't offered more details.
But broadcasters want more guarantees that auctions will be voluntary.
"We aren't against the plan but want to make sure this is truly voluntary, and we want to hold harmless those who don't want to participate," said Gordon Smith, president of the National Association of Broadcasters, a trade group.
The broadcasters are sitting on what is considered beachfront spectrum that is ideal for hosting powerful Internet connections from the flood of Droids, iPhones and Xoom tablets hitting the market.
"It is not at all clear that incentive auctions will take place," Gigi Sohn, president of the public interest group Public Knowledge, said in a statement. She praised the federal attention to mobile broadband technology but said that "even under circumstances of familiar auction procedures, estimates of revenue can vary greatly from what is actually achieved."
Derek Turner, research director for the public interest group Free Press, said the focus should be on ensuring that rural communities will adopt broadband Internet connections over wireless devices. He said that means lower costs for some and more competition among national carriers.
"Spectrum is a valuable public resource, and we need public service commitments from companies in exchange for it," Turner said.
Some lawmakers note that federal programs to expand broadband connections have a questionable track record.
As Obama toured Getz's Clothiers, a retailer that has expanded its business on the Web thanks to broadband Internet for Marquette's population of 20,000, the House Energy and Commerce Committee held a hearing on oversight of recent funding for broadband programs.
More than $7 billion in stimulus funds has been distributed to broadband grants in rural areas, and lawmakers grilled recipients and government officials on the economic gains from those grants.
"Before we target any more of our scarce taxpayer dollars for broadband, it is critical to examine whether the money already being spent is having an impact, as well as how we can minimize waste, fraud and abuse," said Rep. Fred Upton (R-Mich.), chairman of the committee.
Because the funds for new mobile broadband networks would come from auctions and not from the U.S. Treasury, Obama's plan "has a better-than-even chance of happening," said Paul Gallant, an analyst at the investment firm MF Global.
The White House said the auction proceeds would mean that funds won't come out of taxpayer pockets.
In his campus speech, Obama expressed the same enthusiasm for pumping up state economies that he has shown during visits to other swing states ahead of the 2012 election: "If you can do this in the snowy wilderness of the Upper Peninsula, we can do this all across America," Obama said.