Stanford Progressive

FCC Promises Universal Broadband Internet

By Ilias Karim, published January, 2010

Can Stanford students imagine life without high-speed internet access? Of course, but most would prefer not to, and they don’t have to: Wi-Fi signals blanket the campus and Ethernet jacks are taken for granted in every dorm room. However, broadband-speed access on Stanford’s campus—nestled securely in Silicon Valley—is hardly representative of broadband access in the entire United States. Though the U.S. is among the leaders of the world’s high-tech economy, it is only ranked 20th in the world in household broadband access according to a survey from Strategy Analytics. As Stanford students know, broadband internet, once a luxury, is becoming a necessity as more and more data is available online.

The Obama administration has given the Federal Communications Commission (FCC) the task of preparing a National Broadband Plan, to provide broadband internet access to the 40% of households that do not currently have access. Former FCC chief of staff Blair Levin, working under FCC Chairman Julius Genachowski, will present the plan to Congress on February 17th, 2010. Genachowski, appointed by Obama June, 2009, brings new promise to an organization with a reputation for relying on bad data and being plagued with lobbyists and lawyers. Genachowski, who has an entrepreneurial background working with internet start-ups, said in a interview that he wants to bring more engineers, economists, and people like himself into the mix: “I’m convinced that for the agency to succeed it is equally important that the FCC have great engineers, strong economists, and people with entrepreneurial backgrounds.”

The largest obstacle to universal access to broadband internet is geography. High “middle mile” infrastructure costs keep cable and DSL internet providers from connecting to rural areas. Income and race are also issues for broadband internet access. While 65% of urban white households subscribe to high-speed internet, only 40% of Hispanic and 46% of African American households in urban areas do. Access on Native American reservations is still lower, 30% of households in Indian Country do not have access to basic telephone service.

90% of households with incomes of $100,000 or greater subscribe to broadband internet, and only 30% of those with incomes of $20,000 or less do. Broadband internet providers provide better service to higher income areas, but do not have the same profit incentive to serve low income areas. While the income discrepancy in broadband access is unsurprising, broadband internet is especially important for economically and geographically challenged households because many government, educational, and informational resources are easier to find online than anywhere else.

Most of the National Broadband Plan will be financed by telecommunications companies. The FCC estimates that blanketing the entire United States with high speed internet access that will be fast enough for today’s—and hopefully tomorrow’s—bandwidth-intensive web applications will cost more than $350 billion. Obama’s $800 billion economic stimulus package included $7.2 billion to extend broadband internet access into underserved areas. Another annual $7 billion is available from the FCC’s Universal Service Fund (USF), which subsidizes telecommunications services in rural areas. The rest of the funding will come from investments by private corporations seeking to profit from serving more customers broadband access.

Since Genachowski was appointed, the FCC has already demonstrated some entrepreneurial ingenuity. Part of their solution to bring broadband to households everywhere is enabling internet access in set-top television boxes. Nearly all Americans have television and could potentially have broadband internet access if cable and satellite providers, or set-top box manufacturers, innovated to bring the internet to Americans’ televisions. This kind of thinking shows promise for the future work of the FCC. The commission has a slew of important high-tech issues—like use of the wireless spectrum and net neutrality—to determine, which will have a great influence on the U.S. high-tech economic sector.. Genachowski’s goal for a “fact-based and data-driven” FCC is a promising one, but whether or not the FCC can deliver on its promises will be seen by whether it can ensure every American can access broadband internet.

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