January 2008

More than Rhetoric Needed to Close Broadband Gap

January 31, 2008 On January 30, 2008, the National Telecommunications and Information Administration released Networked Nation: Broadband in America, a report that concludes that "a reasonable assessment of the available data indicates" that President Bush's 2004 objective of affordable access to broadband for all by 2007 has been realized "to a very great degree." The Administration's "mission Accomplished" rhetoric does not match reality.

More than Rhetoric Needed to Close Broadband Gap


Bush Administration's Disputed Claims that High-Speed Internet Access is Universal and Affordable

In 2004, during a campaign appearance in Albuquerque, New Mexico, President Bush set an ambitious and laudable goal, he said, "We ought to have universal affordable access for broadband technology by the year 2007."

On January 30, 2008, the National Telecommunications and Information Administration released Networked Nation: Broadband in America, a report that concludes that "a reasonable assessment of the available data indicates" that President Bush's 2004 objective of affordable access to broadband for all by 2007 has been realized "to a very great degree." The report relies on data from the Federal Communications Commission which assumes if one person in a US zip code can subscribe to a high-speed Internet access service, than everyone in that zip code has broadband service available to them. The FCC also defines broadband service as 200 kilobits per second, an inadequate speed to use the Internet's bandwidth-intensive services like streaming video.

Buried in the report is this statement: "The lack of a single authoritative data set makes it difficult to establish with certainty whether broadband has become ubiquitous."

The following statement can be attributed to Benton Foundation Chairman Charles Benton on behalf of the foundation, the Center for Creative Voices in Media, and Florida PIRG:

There is clear consensus that our nation’s ability to compete in the high speed broadband world is essential to our economic future. Unfortunately, the Administration and the Federal Communications Commission continue to rely upon inadequate, highly-flawed data to assess the marketplace for high-speed Internet access. The Administration's "mission Accomplished" rhetoric does not match reality:

  • According to a September 2007 Pew Internet & American Life Project phone survey, roughly half of all Americans don’t have broadband at home. Half is far from universal.
  • Fewer than 25% of New Yorkers in rural areas have access to broadband service and nearly two-thirds of people living in New York City lack access to affordable, high-speed broadband. Some New York City neighborhoods -- like Sunset Park, Red Hook and Hunts Point -- don't even have affordable access beyond a dial-up connection
  • Ten percent of Chicago area residents do not even have access to DSL service
  • Broadband growth in the US is slowing -- down 15 percent from last year's pace
  • The Administration has argued that while the U.S. may be behind in percentage of subscribers, we are the #1 in the world in total number of subscribers – thus we have won. But news from China suggests that it now has 122 million broadband users -- the highest number in the world.

When the Organization for Economic Co-operation and Development (OECD) first collected data on broadband penetration in 2001, the US ranked 4th among the 30 nations surveyed. In June 2004, President Bush noted that America then ranked 10th amongst the industrialized world in per capita broadband penetration. "That's not good enough," he said at the US Department of Commerce. "We don't like to be ranked 10th in anything. The goal is to be ranked 1st when it comes to per capita use of broadband technology. It's in our nation's interest. It's good for our economy." According to OECD June 2007 data, After several years of steady decline in the rankings, the US ranked 15th among industrialized nationals in broadband subscriptions per 100 inhabitants..

We shouldn't be complacent with 15th or even 2nd place in the world.

So why has so little progress been made, despite the Administration's aggressive statements in 2004 in support of a competitive broadband marketplace?

The Administration launched this mission, lacking intelligence about the status of broadband -- a weapon of massive empowerment. Rather than offering an exit strategy for getting us out of the bottom of the world rankings, the Federal Communications Commission several years ago proposed a surge of deregulatory actions that have yet to shown any progress. In fact this surge may have actually contributed further to our declining world rankings. Rather than putting any new proposals on the table, too often the Administration have attacked the messenger (OECD) while assured us that we are making progress, and suggesting we stay the course. For example, the current U.S. duopoly of telcos and cable companies and a lack of choice in broadband providers in some areas were forged by a misguided 2002 Federal Communications Commission decision referred to as Brand X. This had the effect of shutting out competitive cable broadband providers from the market. As a result, of the estimated 58.2 million broadband connections in the U.S., seven companies -- AT&T Inc., Verizon Communications Inc., Qwest Communications International Inc., Comcast Corp., Time Warner Cable Inc., Charter Communications Inc. and Cox Communications Inc., the largest cable modem and DSL carriers -- control a whopping 45.7 million (79%) of those lines as of the end of 2006.

Despite the Administration's failure, other policy makers are attempting to forge ahead. The Wall Street Journal reported in November that -- tired of waiting for the federal government to act on President Bush's promise to make high-speed Internet connections available to every home -- a number of states have taken on the task themselves. Several proposals are now moving through Congress that would improve the way the FCC collects and measures data on broadband penetration.

In 2004, President Bush said, “It's important that we stay on the cutting edge of technological change, and one way to do so is to have a bold plan for broadband.” To restore the country’s Internet competitiveness and truly achieve a universal broadband goal, we must:

1) create a national broadband strategy with set benchmarks, deployment timetables, a commitment to demand drivers, and measurable thresholds;

2) develop federal policies to transition us from analog to fully digital communication technologies – making broadband based communication as universal as telephones are today; and

3) extend broadband's reach to those who can benefit most and harness its potential in order to boost education, reduce health care costs, encourage telecommuting, reduce greenhouse emissions, transform our emergency communication infrastructure, improve homeland security, and raise standards of living.

To do anything less leaves us ill-prepared to tackle the grand challenges that America faces over the horizon.

Our nation's commitment to ubiquitous and affordable communications has never been more important than now. Making broadband as ubiquitous as telephone service and transitioning from analog to digital networks must be key goals in the 21st century. The principle is simple, powerful, and fundamentally important to our nation's future competitiveness and to consumers' future opportunities. Standing at the threshold of an information technology revolution, we should strengthen our guarantee of universal, affordable communication access for all Americans based on reality, not rhetoric.

The mission of the Benton Foundation is to articulate a public interest vision for the digital age and to demonstrate the value of communications for solving social problems.

The Center for Creative Voices in Media is a nonprofit 501(c)(3) organization dedicated to preserving in America's media the original, independent, and diverse creative voices that enrich our nation's culture and safeguard its democracy.

Florida PIRG is an advocate for the public interest. The group has a history of standing up to powerful special interests on issues to stop identity theft, fight political corruption, provide safe and affordable prescription drugs, and strengthen voting rights.

The Federal Communications Commission has announced that, on Tuesday, April 1, 2008, it will hold a Digital Television (DTV) Consumer Education Workshop focusing on low-income consumers. The Workshop will begin at 9:00 a.m. and end at approximately 12:00 p.m., and will address issues related to ensuring that low-income consumers are prepared for the DTV transition.

The Workshop will be held at FCC Headquarters, 445 12th Street, SW, Washington, DC, in the Commission Meeting Room, and will be webcast live from the FCC’s website at www.fcc.gov/realaudio.

AGENDA

8:30 a.m. – 9:00 a.m. Pre-Program Demonstrations of Digital-to-Analog Converter Boxes

9:00 a.m. – 9:15 a.m. Welcome and Opening Remarks
FCC Commissioner Michael J. Copps
FCC Commissioner Jonathan S. Adelstein
FCC Commissioner Deborah Taylor Tate

9:15 a.m. – 10:30 a.m. How to Reach and Provide Support on the DTV Transition to Low-Income Consumers

Moderator: Catherine W. Seidel, Chief, FCC Consumer and Governmental Affairs Bureau

Roundtable Participants:

Cheri Arnott, Associate Commissioner for External Affairs, Social Security Administration

Luisa Lopez, Director of Social Work Practice, Human Rights and International Affairs, National Association of Social Workers

Lou Manuta, Senior Attorney, New York Public Utility Law Project

Marjorie Moore, President, Harlem Consumer Education Council

Quinton Robinson, Policy Advisor, Rural Coalition and Mississippi Action for Community Education

Mark Wolfe, Executive Director, National Energy Assistance Directors Association

10:30 a.m. – 10:45 a.m. Break
Attendees are encouraged to view the digital-to-analog converter box demonstrations.

10:45 a.m. – 10:50 a.m. Remarks of FCC Commissioner Robert McDowell

10:50 a.m. - 12:00 p.m. How to Reach and Provide Support to Low-Income Consumers on the DTV Transition (continued)

12:00p.m. – 12:15 p.m. Wrap Up

12:15 p.m. – 12:45 p.m. Demonstrations Continue

For more information, please contact Pam Slipakoff at (202) 418-7705, pam.slipakoff@fcc.gov, or Lauren Patrich at (202) 418-7944, lauren.patrich@fcc.gov



Networked Nation: Broadband in America, 2007


Bush Administration Hails Dramatic U.S. Broadband Growth

U.S. Department of Commerce’s
National Telecommunications and Information Administration (NTIA)

January 31, 2008

Four years ago, President Bush established a national goal of universal, affordable broadband access for all Americans. Since then, the United States has witnessed remarkable results in the growth of the broadband marketplace and the proliferation of broadband platforms and service options. The existing data indicate that broadband is available to the vast majority of U.S. households:

  • According to the FCC’s 2006 data, broadband service was available in 99 percent of the nation’s zip codes, encompassing 99 percent of the nation’s population;
  • Since President Bush took office, the total number of broadband lines in the United States has grown by more than 1,100 percent from almost 6.8 million lines in December 2000, to 82.5 million in December 2006, according to the most recent FCC data.
  • By December 2006, 91.5 percent of ZIP codes had three or more competing service providers and more than 50 percent of the nation’s ZIP codes had six or more competitors.

The report examines the comprehensive package of technology, regulatory, and fiscal polices implemented by the Administration to lower barriers to investment and create an environment in which broadband innovation and competition can flourish.

For example:

  • In the technology area, significant amounts of new radio spectrum are now available for advanced wireless services, creating opportunities for new licensed and unlicensed broadband services. Also, new technologies such as Wi-Fi hotspots and broadband over power lines (BPL) have been fostered.
  • In the regulatory arena, new broadband infrastructure was freed from unnecessary legacy rules to level the playing field among competitive platforms and promote investment.
  • In the fiscal area, the Administration led the preservation of the Internet tax moratorium and reforms for the depreciation of assets in order to reduce tax burdens and increase the flow of capital into the broadband sector.

Collectively, these actions have produced real, measurable benefits in the marketplace in the form of robust, multi-modal competition that did not previously exist. Providers across a range of platforms (cable, fiber optic, satellite, fixed and mobile wireless, etc.) are introducing new and innovative service offerings on a regular basis. Competition in the broadband marketplace is intense and growing, and this competition is helping to drive down prices and increase the quality and variety of services for consumers. With the dramatic increase in broadband availability over the past few years, consumers now have a myriad of choices.

A Blueprint for Big Broadband


Most developed nations are deploying “big broadband” networks (100 Mbps) that provide faster connections at cheaper prices than those available in the United States. The failure of the United States to keep pace is the direct result of our failure to adopt a national broadband policy.

John Windhausen Jr.
EDUCAUSE

The United States is facing a crisis in broadband connectivity. The demand for bandwidth is accelerating well beyond the capacity of our current broadband networks, especially as video traffic and home?based businesses become more prevalent. In the very near future, a single family will be watching HDTV video at the same that they engage in remote health monitoring, videoconferencing, gaming, distance education class lectures, and social networking. Moore’s Law, as well as several studies of future Internet growth, predicts that homes and businesses will need a minimum of 100 megabits per second (Mbps) of capacity within the next three to five years and will need even greater capacity going forward.

While other nations are preparing for the future, the United States is not. Most developed nations are deploying “big broadband” networks (100 Mbps) that provide faster connections at cheaper prices than those available in the United States. Japan has already announced a national commitment to build fiber networks to every home and business, and countries that have smaller economies and more rural territory than the United States (e.g., Finland, Sweden, and Canada) have better broadband services available.

Why is the United States so far behind? The failure of the United States to keep pace is the direct result of our failure to adopt a national broadband policy. The United States has taken a deregulatory approach under the assumption that the market will build enough capacity to meet the demand. While these steps may have had some positive influence, they are not sufficient. The profit/loss statements of individual firms fail to take into account the positive externalities from a widely deployed broadband network, including economic growth, lower?cost health care, and higher?quality education. In contrast, most other nations treat broadband services as necessary infrastructure; their governments adopted explicit broadband stimulus plans at the turn of the century, and their countries are now reaping the benefits.

The United States needs to take aggressive action to significantly expand our broadband connectivity. Now is not the time for incremental improvements; we are behind, and we must adopt a comprehensive strategy this year if we are to address the growing needs of our citizens and our economy. U.S. policy must be forward?looking—we must “skate where the puck is going to be.”

For these reasons, this paper proposes the creation of a new federal Universal Broadband Fund (UBF) that, together with matching funds from the states and the private and/or public sector, should be used to build open, big broadband networks of at least 100 Mbps (scalable upwards to 1 Gbps) to every home and business by 2012. U.S. state governors and foreign heads of state have found the resources to subsidize broadband deployment; the U.S. federal government should as well.

Building a local fiber connection past each home and business will cost approximately $100 billion. The paper recommends the public?private partnership approach followed in Canada, where one?third of the funding would be provided by the federal government, one?third by the states, and the remaining onethird by the private and/or public sector. It thus proposes a federal fund of $8 billion per year for four years, to be distributed to the states once they provide their matching amount of funding. Each state would then combine the federal and state funding and award grants to individual entities (public or private) that provide the remaining one?third of the funding to build open, big broadband capacity on a community?by?community basis.

Connectivity Scorecard


Businesses and governments must make better use of their communications and computing infrastructure if they are to benefit from the full economic and social benefits of ICT

Professor Leonard Waverman
London Business School and global economic consulting firm LECG

Commissioned by Nokia Siemens Networks

The is a global information and communications technology (ICT) index that measures the extent to which governments, businesses and consumers make use of connectivity technologies to enhance social and economic prosperity.

According to the study, even the world’s best connected countries are not exploiting communications technologies to their fullest potential and in many cases policy and regulatory activity designed to promote connectivity is not having the impact intended.

The ranks the United States first in a group of 16 innovation driven economies [as defined by the World Economic Forum], although its score is only 6.97 out of a possible 10.0. The differentiated nature of the Scorecard compared to other rankings is illustrated by the fact that Korea, typically a high scorer on other indexes, is ranked 10th on the list, with a rating of just 4.78.

The measures the extent to which governments, businesses and consumers make use of connectivity technologies - the copper wires, fiber-optic lines, mobile phones and PCs that underpin today’s information economy - to enhance social and economic prosperity. For each component of the Scorecard, countries are benchmarked against the best in class in their tier; thus if a country was best in all dimensions, it would score a maximum of 10.0 Countries typically considered to be highly connected achieved only modest scores on the Scorecard – the average score for a group of 16 countries that include the U.S., Sweden and Korea was 5.05.

These results indicate an opportunity for countries to add hundreds of billions of dollars in economic benefit by rethinking how they measure and enable connectivity, according to the study authors. The authors point to a well-known study by Crandall and Jackson1 that showed a $500 billion long-term economic benefit to the U.S. just from achieving near-universal broadband penetration. Given the room for improvement on multiple measures of connectivity, there is every reason to believe that the worldwide gain from improving connectivity would be several multiples higher.

Today's Quote 01.31.08

"In rich suburban areas they're getting broadband. But in many poor and many rural areas we're not seeing the same kind of competitive marketplace that President Bush outlined in his speech in 2004."
-- Derek Turner, Free Press

U.S. tops new tech usage ranking

US TOPS NEW TECH USAGE RANKING
[SOURCE: Reuters, AUTHOR: Tarmo Virki]

Dueling Digital TV Studies

DUELING DIGITAL TV STUDIES
Consumer Reports and the National Association of Broadcasters released studies on Americans' awareness and understanding of the digital television transition in advance of a consumer workshop to be held by the Federal Communications Commission today.

* Digital Transition Still Foreign To Many TV Viewers
[SOURCE: Multichannel News, AUTHOR: R. Thomas Umstead]

Spectrum Auction Update: FCC Hits $10B Mark

SPECTRUM AUCTION UPDATE: FCC HITS $10B MARK
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]