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100-Meg Price Tag: $350B

Jeff Baumgartner
9/29/2009
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Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check.

Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17. (See FCC Boots Up National Broadband Plan .)

Some perspective: Only $7.2 billion has been set aside for the "broadband" component of the American Recovery and Reinvestment Act (ARRA). (See Recovery Act: WiMax Hunts for Broadband Bucks, Recovery Act: Cable Bids for Broadband Funds, and Recovery Act: Round One Brings 'Nearly $28B' in Bids.)

That's not even enough for universal broadband under the FCC's current definition (768 kbit/s downstream and 200 kbit/s upstream). Carlos Kirjner, the senior advisor to FCC Chairman Julius Genachowski, said early estimates suggest it would cost about $20 billion to deliver universal broadband services in the range of 768 kbit/s to 3 Mbit/s across the board.

The price tag climbs to $50 billion for a 50-Mbit/s service and $350 billion for 100 Mbit/s, he said.

Today's meeting, expected to include more than a dozen presentations and run about four hours, was meant to provide the Commission with the latest data on broadband deployment and adoption levels as well as some forecasts it can use in formulating the national plan.

The FCC estimates that 3 million to 6 million U.S. residents are unserved by broadband connections providing speeds of at least 768 kbit/s. Blair Levin, the FCC's executive director of the Omnibus Broadband Initiative (OBI), stressed that the combination of broadband stimulus funds, the Universal Service Fund, and even private sector investment won't provide enough to deliver basic broadband services to that group.

The FCC is also seeking comment on whether it should update its definition of broadband. Some parties, including the National Cable & Telecommunications Association (NCTA) and Verizon Communications Inc. (NYSE: VZ), say it shouldn't, and Verizon also argues that the speed targets for fixed and mobile broadband services should be separate. (See Defining 'Broadband'.)

In weighing the question, the FCC is taking applications into account. A user who sticks to email and Web browsing can probably get by with 700 kbit/s, said Peter Bowen, the applications director for the OBI. But someone who accesses larger files and uses two-way videoconferencing might need more than 7 Mbit/s.

"The demands on the network today will only increase as applications become more and more bandwidth intensive," added Shawn Hoy, a business analyst with the FCC's OBI.

The FCC also appears to be leaning toward having actual speeds, rather than advertised speeds, factor into its final analysis. On that point, it says the majority of consumers who subscribe to a 6-Mbit/s service tend to get median speeds closer to 3 Mbit/s.

"We feel good about this analysis," Hoy said, noting that the U.K.'s Ofcom also found that consumers typically got 57 percent of the speeds advertised by broadband ISPs.

The FCC said it has received more than 20,453 responses (and more than 36,000 pages of data) since issuing the original notice of inquiry on the National Broadband Plan.

— Jeff Baumgartner, Site Editor, Cable Digital News




Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.


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rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:55:26 PM
re: 100-Meg Price Tag: $350B


The figure seems about right to me.  Is there a link to the report?  It would be interesting to see the PPE&E vs. labor cost break out. 


Also, if we're sinking that much (roughly $1K per home) it seems much wiser to install gig links.  Considering the median price of a home is $246K (2006 data) this is really not too expensive and is worth the investment.  Sadly where I live (which happens to be the technology center of the world) all the government officials are busy convincing the public that building more sports stadiums is the way to go.


 


 

acohn
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acohn,
User Rank: Light Sabre
12/5/2012 | 3:55:26 PM
re: 100-Meg Price Tag: $350B


Why not just outsource the whole project to some asian vendor.  They can bring in thousands of migrant workers to complete the job.  Worked for the railways in the 1850's.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Sabre
12/5/2012 | 3:55:26 PM
re: 100-Meg Price Tag: $350B


The FCC pushed out some of the info they were presenting on sometime during this four-hour-plus meeting. Here's the official announcement summarizing what was presented.  And here's a PDF of the 168 slides that were presented. I had to duck out after the first half of the meeting, so looks like I'll be spending some time poring over some more data....


Jeff 

Light-bulb
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Light-bulb,
User Rank: Light Beer
12/5/2012 | 3:55:23 PM
re: 100-Meg Price Tag: $350B


RJ, why don't you break-down the cost benefits to the government for investing this money vs a stadium that actually can make real money.  


 


I don't believe anyone has shown conclusively how fast broadband makes the world better, outside of delivering questionable content faster...


 


The government needs to stay the hell out of this.  This is not a function of government, and as such should be left to those who actually know what the hell they are doing.  


 


Yea... that's just what we need the Fed's trying to run something like this... can you imagine the bloat and the ungodly government salaries for something like this to "manage"...


This is pure insanity.

rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:55:22 PM
re: 100-Meg Price Tag: $350B


LB:  On benefits the FCC powerpoint slides posted by Jeff is a decent starting point.  Have a look at that.


Or think of it this way.  Imagine you're assigned by God to help a kid out from a very poor neighborhood.  You are given a choice of two options.  Option one is to build an infrastructure allowing that kid to connect to the world and the world's information.   Option two is to build  a stadium where the odds that the kid would actually get a job from that stadium are  less than 1/200,000 while the cost for his family to attend a game is $759.


"The increase was fueled largely by the steep prices at the Cowboys' new stadium,"


"The sticker shock doesn't end with the cost of tickets, however. The Fan Cost Index -- what it takes to bring a family of four to a game -- is $759 in Dallas, by far the highest in the league."


Now, get this wrong and you've doomed that kid and any kids he or she might bring into this world to a continuous decline in their standard of living not to mention other quality of life factors.


 


 

Light-bulb
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Light-bulb,
User Rank: Light Beer
12/5/2012 | 3:55:21 PM
re: 100-Meg Price Tag: $350B


RJ,


 


There you go thinking that this is a static 1:1 relationship.  


Fact is that kid can go to ANY library in the city if so inclined and have access to all the information in the world.  Access to Internet, checkout DVD's, checkout books, participate in free learning programs and volunteer to an amazing amount of different service activities...


 


Or...


 


We can have more of the same BS...  We can plug his home up to a fast link, and say "Now you can learn" and watch him play his multiplayer games day in day out, or just continue to live in solitude.  And while we are at it, jeez we probably should buy him/her a computer, then maybe he needs a mobile device so he/she has it everywhere...


 


I for one believe we need the opposite to occur and people need to come together and learn in a social environment that rewards those willing to put in the time, and the energy to seek answers with real opportunity.  I think people are dillusional to think that this, THIS is what we've been lacking if only we had this we could be better at x...  It's all mindless dribble.  


 


So your young hoodlum you brought up... well last I checked the poor have access to a hell of a lot more resources than the (fewer and fewer of us) who pay our taxes and are middle-class.  In fact... I bet that kid would just have to show up at any number of public places and be ready to learn and the world would be his/her oyster, he/she just needs the motivation to do so.


 


A stadium... has massive direct immediate LOCAL economic impact.  It brings in fans from across/around the world, allows people to socialize and get out doors, it sells alcohol, hotel rooms, Fine meals, shirts, and misc slag, etc etc.  It's real $$ delivered right to the community.


How much in taxes does the NFL pay?  How about NHL?  NBA?  MLB?  Home shows?  Different community shows etc?  I'm willing to bet it's a massive MASSIVE number.  The property taxes alone on the Stadium has to be a large number.


Until someone makes a very legitimate case about how a high speed connection promotes something tangible it's just dribble.  Useless nonsense that some bureaucrat thinks will help without a plan.  HOPE is not a strategy it never wins, yet somehow it can never bring change either... funny how that works out.  


You or I don't doom kids, their parents do.  Want to make a difference go volunteer and put real resources (your time, and commitment) don't try to take my $$ because you "THINK" this could help.  It's not my responsibility to provide for the poor, nor is it my responsibility to provide for any other outside of my family.  People are responsible for their own actions, kids become victims of their parents and have to make a Choice whether they will choose to live in poor circumstances or decide to change their fate. 


 


This discussion could be a very long one, but I have reviewed the slides and wow... shocker the Internet is... convenient. 


 


The figure of 350B is a joke by the way.  I know one small little community (Grant County) that has spent in excess of 140M already for coverage of fewer than 10,000 people.  Granted this was Fiber to the home, so maybe if we just deployed Wi-Max, or 4G... well maybe then you could get there, but you'd have some serious congestion...

drewcwsj
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drewcwsj,
User Rank: Light Beer
12/5/2012 | 3:55:12 PM
re: 100-Meg Price Tag: $350B


There isn't enough spectrum to service even a very small fraction of households with 50 to 100 Mbps via wireless, whether 802.11, WiMax or LTE. State of the art today yields about 2.5 bits/hertz/second. LTE Advanced with 4x4 MIMO might get to 4. Using all of the spectrum below 5 Ghz (above 5 Ghz is not very useful as the attenuation through walls gets severe) for internet access would yield 12.5 gigabaud of bandwidth. Divide that by 50 Mbps equals 250 households. Of course that means turning off everything else broadcasting below 5 Ghz so no more police radios or broadcast TV. 4G will only work in very rural areas. Oh and current state of the art for LTE shows pretty rapid drop off in throughput above 1 kilometer.


 

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