FCC Explains Its Broadband Plan

MENLO PARK, Calif. -- The important thing to remember about the U.S. National Broadband Plan is that it's not going to fix everything.

Blair Levin, a former Federal Communications Commission (FCC) chief of staff who's returned to run the FCC's broadband initiative, and Carlos Kirjner, senior adviser to the FCC chairman, spoke at an informal gathering of about 50 people this morning, organized by Silicon Valley's Churchill Club. Everyone crammed into a cozy conference room at the law offices of Goodwin Proctor to get an update on just what this Broadband Plan includes and why the FCC deems it necessary.

The FCC has to submit the plan to Congress by Feb. 17, and Levin and Kirjner have been soliciting public input, through in-person forums and 27 public notices requesting comment. This being Silicon Valley, both men were quick to mention, repeatedly, how much they view and crave the opinions of the technorati.

It wasn't just a techy kiss-up session, though. The tone was candid as Levin and Kirjner summed up the major areas the Plan is addressing so far:
  • The need for more wireless spectrum
  • IPTV and other IP-related changes to TV markets
  • Developing ways to let users quantify how well broadband is working
  • Security and privacy
  • "Universalization," bringing broadband to institutions like schools and hospitals
  • Lowering broadband costs by addressing issues such as right-of-way

But the broadband plan won't fix every contention that exists around broadband issues. Net neutrality is a good example. It came up in audience Q&A, but Levin and Kirjner said the plan won't be answering that issue simply because that's the job of other people at the FCC.

One audience member raised a more thought-provoking question: Can the broadband plan create some long-reaching infrastructure that will benefit people for decades, the way the national highway system did?

In some ways, it doesn't seem likely.

"We struggle with this a lot, because there are a lot of people saying, 'Be visionary. Be big,'" Levin said. But analysis kills off some big ideas. He cited the FCC's contention, which he said is backed by other studies, that it would cost $350 billion to bring fiber broadband to every American.

In fact, much of the ground the broadband plan will cover will be more practical than glamorous: rights of way and the Universal Service Fund, for instance.

"Fixing Universal Service is something which must be done. It's not sexy," Levin said. "But we're spending $7 billion a year inefficiently."

A more exciting area that the plan will address is the set-top box market. Levin and Kirjner cited disappointment that a retail set-top market hasn't emerged in force; there are only 14 retail set-top models on the market compared with 879 mobile-handset devices, they said.

The part that's likely to get the most attention is the wireless spectrum. There's a pervasive concern that the U.S. is going to run out of spectrum for broadband, and the FCC is trying to develop market-driven ways of making sure spectrum can be allocated where it's needed.

Another audience member was concerned about the lobbying power of big operators like AT&T Inc. (NYSE: T), wondering if they'll manage to override any parts of the plan they don't like. Levin addressed that by noting that the FCC will have to do a sell job on the plan, since ideally, it's not going to be 100 percent pleasing to any particular entity.

"There are parts of this plan that AT&T is going to like and there are parts it's not going to like," Levin said.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:51:42 PM
re: FCC Explains Its Broadband Plan

Actually, I left out the best quote:  "CableCard has not succeeded in creating a retail market, which was our mandate," as Kirjner said.

The stat they showed was: Between July 2007 and August 2009, there were 16.7 million operator-leased set-top boxes installed, versus 400,000 deployed via retail.

"We are looking for solutions to open it up, to get the fact of CableCard working, to get retail," Kirjner said.

Jeff Baumgartner 12/5/2012 | 3:51:39 PM
re: FCC Explains Its Broadband Plan

That is a good one...and it's interesting to see the FCC come around on this issue. I think the possible (likely?) death of the CableCARD in a going-forward fashion won't get too many complaints from the cable industry or anyone else...though Moto and Cisco may not be so wild about it...they get paid whether they sell the set-tops paired with the cablecard, or just sell the cablecard. in fact, the margins on just the cablecard are believed to be even better for them. Anyway, i got lots cookin' on this  topic for Monday. Jeff

Tesla_x 12/5/2012 | 3:51:36 PM
re: FCC Explains Its Broadband Plan

"Fixing Universal Service is something which must be done. It's not sexy," Levin said. "But we're spending $7 billion a year inefficiently."

"it would cost $350 billion to bring fiber broadband to every American."


And we're running out of wireless spectrum, 3G/4G/etc.....a "Wireless Spectrum Crisis"....so that is a dead end.


The solution is fairly straightforward....add the USF to the stimulus for rolling out the fiber plumbing, every year till everyone is connected with a combination of Fiber, DSL, wireless, heavily weighted to the wired portions.


Continue the stimulus every year and lever all the funds with more loans using the base $14-15B as grants, assumes ~20% applicant funds, 30% grant, balance loans to get it closer to $~$50B and in 7 years we're all a connected low carbon economy.


This is long lasting permanent infrastructure which would be the backbone of the small business and telecommuting populace for DECADES afterward, would have the consequent commerce facilitating effect on the nation, similar to how the railroads and other modern transportation did in days past.


Tesla_x 12/5/2012 | 3:51:35 PM
re: FCC Explains Its Broadband Plan



In a research note this morning, Bernstein Research analyst Toni Sacconaghi considers the issues the iPhone has created for AT&T (T) and other carriers. He writes that the iPhone has proven to be a mixed blessing for AT&T and other carriers, accelerating adoption of wireless data plans, but also triggering severe network performance degradation, customer dissatisfaction, higher capital spending and lower return on invested capital.

Sacconaghi estimates that the average iPhone users consumes 5x-7x as much monthly bandwidth as an average wireless voice subscriber, and more than 2x the amount used by the average 3G smartphone user. He says the average iPhone user consumes 250-350 MB/month including voice, which is above the 200-250 MB entry level data plans Verizon and AT&T offer. He notes that some heavy users gobble 1-5 GB a month; he calculates that some of the heaviest users effectively have a net present value to the carriers of zero (emphasis added).

bollocks187 12/5/2012 | 3:51:34 PM
re: FCC Explains Its Broadband Plan

The FCC can go a long way in the cellular market by forceing carriers to not lock their phones to the network. The USA  needs a policy of "any carrier SIM card with any cell phone/PDA". 



Tesla_x 12/5/2012 | 3:51:31 PM
re: FCC Explains Its Broadband Plan

While that might make things more competitive, and lower subscription prices/fees, how does that solve a bandwith/spectrum and margin/profitability problem?



bollocks187 12/5/2012 | 3:51:22 PM
re: FCC Explains Its Broadband Plan

Carrier profitbalility - The end consumer does not care if they are profitable.

 Folks are paying way over what they where paying for land line services by $100+ a month and for wireless on aglobal open scale they are being gouged big time. If they are not profitable then they should not be in the business just like any other business venture. The FCC should be  working to protect the end consumer and not making the carrier profitable !

Make the spectrum OPEN that should rock the boat - anyone can use it- lol



Sign In