The FCC's National Broadband Plan: A First Look

The FCC released an executive summary of its "National Broadband Plan" yesterday (more details are expected today), which it has been developing for most of the last year at the direction of Congress. Regardless of your political beliefs, when the government decides to weigh in on key telecommunications issues, it's important to understand its positions and their potential implications. This is particularly true given how dynamic the digital, broadband and mobile landscapes are.

Based on my reading of the Executive Summary, here are my first reactions to some of the most important parts of the plan:

Spectrum reclamation/mobile use - One of the most anticipated pieces of the plan is what the FCC would propose to do with spectrum currently allocated to local broadcasters. Many believe that with the shift to digital delivery, broadcasters should give back some of their spectrum for more pressing uses - mobile being at the top of the list. On the other hand, broadcasters are seeking to keep their spectrum for HD and mobile TV services.

The FCC's proposal, to free up 500 megahertz of spectrum within 10 years, of which 300 megahertz would be used for mobile within 5 years, seems like a good starting point. It pragmatically recommends that the spectrum be freed up through "incentive auctions," with some of the proceeds going to broadcasters. This means broadcasters should be able to run business cases and economic comparisons on the pros and cons of keeping or giving back some of their spectrum, with the government tweaking the incentives to accomplish its bandwidth goals. Given the exploding interest in mobile devices and video apps (e.g. March Madness on iPhones), more bandwidth for mobile use is crucial to achieve.

Competition/transparency - While the FCC makes a host of transparency recommendations for broadband service providers, it wisely did not include "open access" mandates, where broadband ISPs' networks would be opened up for others to use. That would have upended broadband ISPs' business models, likely leading to years of litigation and little progress toward desired goals. The FCC's recommendation for things like market-by-market price and service benchmarking and service disclosures are consumer-friendly and not onerous to broadband ISPs. To the extent that consumers gain access to the information they'll help fuel competition as well.

Promote rural access - The FCC correctly wants to address the issue of broadband "haves" and "have nots," brought about by the hard economic realities of wiring less dense, rural communities. Much as the government sought to subsidize prior infrastructure projects like electricity and telephone service, the FCC now seeks to shift necessary money from the Universal Service Fund to support broadband buildouts in rural America. So long as the FCC policy doesn't spread to more suburban or urban markets that already have robust broadband infrastructure, this seems like sound policy.

Expand digital literacy - A small item in the overall summary, but one which could be quite impactful is the idea of creating a "National Digital Literacy Corps" to teach digital literacy and raise broadband adoption. The practical reality is that even the fastest broadband pipes mean little if citizens on the receiving end don't know how to use a computer or a web browser. Many people today live their lives digitally, but many others still don't. Incenting some of the former group to channel their energy and knowledge to the latter group is in everyone's interest.

The FCC understands how crucial broadband is and also articulates 6 longer-term goals (e.g. 100 million homes with 100 mbps access) which set the bar high for America to keep pace with other countries. Video delivery is already one of the key areas impacted by broadband adoption and under the new FCC plan it is poised for still further change. Overall, the FCC seems to recognize that broadband fuels further innovation in our economy and that it is important to be supportive of its continuing buildout. The Plan now has to make its way through reviews and approvals.  

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Categories: Broadband ISPs, Broadcasters, Regulation

Topics: FCC