From his first day, the top mandate of FCC Chairman Julius Genachowski — an Internet-savvy industry veteran — has been a vast expansion of broadband services for the United States. Now, with a newly hired staff and several newly appointed FCC commissioners, the agency is gearing up to tackle broadband issues in a major way.
The swearing in of Meredith Attwell Baker and Mignon L. Clyburn as FCC commissioners last month finally brought the agency back to its full slate of five members. Genachowski has named his senior adviser on broadband technology and selected a staff and a slate of senior technologists to work on the development of a comprehensive national broadband plan.
Together, this group will tackle one of the largest new communications initiatives in modern U.S. history. Among the key issues are net neutrality, helping narrow the digital divide, providing universal service, ruling on intercarrier compensation, establishing rules regarding broadband access and VoIP, security, fair use and more.
In August, Genachowski named Carlos Kirjner as his senior advisor on broadband technology. Kirjner, an engineer who has worked for McKinsey and Co., semiconductor firm Telegent Systems and Vodafone Group, will play a leading role in the creation of a national broadband plan.
Other key players at the FCC include Blair Levin, executive director of the Omnibus Broadband Initiative; Julius Knapp, chief of the FCC’s Office of Engineering and Technology and a 35-year commission veteran; Stagg Newman, chief technologist, who has worked for Bellcore, BellLabs, Frontline Wireless, McKinsey and Co. and Pacific Telesis; and Byron J. Neal, chief engineer and former employee at Intermedia Communications, Syniverse Technologies, Transglobal Communications, Trinsic Communications and 2nd Century Communications.
The first major step taken by the Obama administration in communications policy was including funding for an expansion of broadband services in the American Recovery and Reinvestment Act of 2009. This action will have a significant impact on both traditional telecommunication carriers and on any business that relies on broadband access to develop, produce and market their products.
The Recovery Act, passed shortly after President Obama’s inauguration, was an economic stimulus package designed to strengthen the economy now and to invest in the country’s future. Having used the Internet so successfully during his presidential campaign, President Obama has placed central importance on broadband technology. “Modern technology is critical to the expansion of business, education and health care opportunities in rural areas and the competitiveness of the nation’s small towns and rural communities,” he said.
The Recovery Act provides $7.2 billion to expand the nation’s broadband infrastructure to underserved areas and directs the FCC to develop a national broadband plan. Disbursement of the initial funds, a total of $4 billion, began on July 1 when the departments of Commerce and Agriculture detailed the rules and criteria for fund distribution. The recipients of the first round will be announced on or about Nov. 7, and the funds will be released in early 2010.
The act provides for two additional disbursements in 2010, with the total $7.2 billion to be disbursed by Sept. 30, 2010. Much of this money is designated for broadband improvements in small towns and rural areas, traditionally viewed by communication carriers as less profitable. The law mandates that all projects be fully completed within three years.
In addition, the law calls for the FCC to develop a comprehensive national broadband plan by February 2010, which ”shall seek to ensure that all people of the United States have access to broadband capability and shall establish benchmarks for meeting that goal.” The FCC must report to Congress by Feb. 3, 2010, and submit the full plan by Feb. 16.
The FCC will hold nearly two dozen broadband-related workshops in the coming weeks. At the first, Genachowski noted that nearly 40 percent of American households do not have broadband access — a figure that rises dramatically for minorities and households earning less than $50,000 per year or in rural areas.
Blacks and Latinos are much less likely to have access to home computers than are white, non-Latinos (50.6 and 48.7 percent compared to 74.6 percent in 2003). They are also less likely to have Internet access at home (40.5 and 38.1 percent compared to 67.3 percent).
Among the issues is whether a mechanism should be in place to ensure affordable broadband access (similar to the role universal service funding plays in promoting the availability of traditional wireline services) and determining whether “nondiscrimination” should be added to the FCC’s existing policy. A major goal of the plan is to close the digital divide.
Another key issue at stake is net neutrality, a term that refers to the policy of preventing Internet service providers from creating a hierarchy in the transmission of data over a broadband connection. Such a hierarchy reserves bandwidth for the service provider and its favored vendors and limits bandwidth for competitors or other disfavored vendors.
Limiting bandwidth reduces or stalls the speed of the transmission, making a competitor’s Web site content slower. Net neutrality would require all service providers to treat content the same. This is expected to be a hot issue, especially with cable and telcos who also want to favor their own video services.
The FCC’s actions come with a backdrop of the United States continuing to fall behind other nations in broadband usage and access. Until the late 1990s, the United States was the leader of Internet connectivity. Ten years later, however, there has been a dramatic shift. U.S. customers now pay more for worse service, slower speeds and more limitations than other countries around the world.
“We have this broadband stimulus … and that’s $7.2 billion, which sounds like a whole lot of money on the face of it, but on the other hand, it’s a tiny fraction of what we actually need to be spending as a country to really catch up to other countries around the globe to make a competitive infrastructure for next-generation, 21st-century economies,” said Sascha Meinrath, director of the New America Foundation’s Open Technology Initiative, at a recent FCC hearing.
In an example, Meinrath said the United States, with $7.2 billion, is spending about $24 per capita, while Australia is spending $1400 per capita. “All of a sudden, one can see that the investment that we’re making is really just the tip of the iceberg in terms of what we actually need to be putting into broadband infrastructure,” he said.
The actions by the FCC in next three to six months will set a trajectory for the next decade of policies and regulations having to do with broadband in the United States, Meinrath said.