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100-Meg Price Tag: $350B

Giving 100-Mbit/s broadband to every US home sounds nice, but the FCC says it won't come cheap

Jeff Baumgartner

September 29, 2009

3 Min Read
100-Meg Price Tag: $350B

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.

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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