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Cover Story: More, Better, Faster

After digesting 26 workshops, testimony from 230 witnesses and nearly 41,000 pages of written comments, the Federal Communications Commission clearly sees a need for speed.

That was one remedy that emerged at a public meeting last week as the agency tries to craft a strategy for “delivery of universal, affordable, widely adopted broadband to serve vital national purposes” as part of the American Recovery and Reinvestment Act of 2009. The national broadband plan is due to Congress by Feb. 17, 2010.

At the FCC meeting, chairman Julius Genachowski offered a state-of-the-industry update, rather than strong recommendations. Still, the need for faster Internet lines complicates another key agency mission: service to the about 3 million to 6 million people are who are unserved by basic broadband, defined as a speed of 768 Kilobits per second or less.

As the FCC increases the minimum broadband speed in its definition, the number of “unserved” subscribers also goes up. And that, of course, means more money must be spent. By the government’s own estimates, the total investment required could go as high as “$350 billion for 100 [Megabits per second] or faster.”

The National Telecommunications & Information Administration and the Agriculture Department next month will start to hand out grant and loan money to begin that process. Meanwhile, the NTIA last week introduced interactive online maps to applicants seeking to help close the broadband gap.

The FCC’s broadband task force concluded that it was not getting enough information from providers on where and how broadband service was being deployed, and so it was probably underestimating the number of people who did not have access to high-speed connections — a figure it put at 5 million households.

After several presentations at the meeting — dubbed “broadbandapalooza” by commissioner Meredith Attwell Baker — it became clear that the definition of broadband would depend on which applications the FCC decides are necessary to support.

If the baseline standard is set for just e-mail and Web browsing, said the FCC’s broadband task force, then 300 Kbps would suffice. But the clear thrust of their presentations was that wouldn’t be fast enough for a forward-looking plan that would allow for such high-bandwidth functions as monitoring heart patients, tracking home-energy consumption or proffering two-way video education. They cited billions of dollars in savings from such bandwidth-hungry telemedicine applications, which they pointed out could help bring health-care costs down — another obvious hot-button issue for the administration.

Genachowski said it was only the start of a weeks-long process of reviewing the findings, but task force members seemed to be clearly hinting at a path to higher speeds.

Carlos Kirjner, senior adviser to Genachowski, said, “If we take download speeds as a proxy for performance,” there are some applications that require only a few Kilobits per second, while others require 10 Mbps.

“If your vision of universal broadband for America is that every American home can do just e-mail and basic Web access, then that leads to a certain set of requirements for performance, a certain set of requirements for private investment, and potentially a certain type of universalization process,” he added.

Then he painted the other picture: “However, if your vision is that every home and business in America should be able to have access to high-quality video for education, access to telecommuting and access to online video for potentially a medical consultation,” that will drive a different set of requirements. The same went for a 100-Mbps threshold that would allow for new applications “in the fullness of time.”

The FCC changed its definition of high-speed Internet last year and the National Telecommunications & Information Administration used that new, faster definition in its stimulus broadband grant rules. Even though the FCC served as an adviser on that call, then-chairman Michael Copps said the agency would not necessarily stick with that number for the broadband plan.

How broadband is defined will have huge cost implications, according to Kirjner. To bring speeds of only 768 Kbps to the roughly 5 million U.S. homes without broadband would cost about $20 billion in capital and operating expenditures. Throttle up to 10 Mbps, though, and 35 million homes are “not passed by appropriate infrastructure” — and costs jump to $50 billion. Building out to 100 Mbps would cost an estimated $350 billion.

Whatever the cost, FCC broadband consultant Blair Levin conceded that private industry will foot most of the bill.

“We have to recognize that most of this [broadband] ecosystem is funded by the private sector, and we expect that to continue,” said Levin, But government has a role to move whichever levers are necessary to improve the health of that ecosystem, he said.

For cable, one upside from last week’s meeting was the potential to grow its subscriber base. The FCC called for the first-ever study into the factors preventing some 33% of potential broadband subscribers from signing up.

The National Telecommunications & Information Administration has only one more year to hand out $7.2 million in broadband-stimulus money in concert with the Agriculture Department. Last week, the NTIA posted an online mapping tool that shows the areas the 2,200-plus bidders for the first tranche of that money said are unserved and underserved.

Incumbent network operators will check those maps to find out where they may face government-subsidized competition. Those incumbents will have 30 days to comment on the maps, including making their case for whether their region should be classified as unserved or underserved.

The NTIA and RUS will start handing out the first tranche of the $7.2 billion in stimulus money in November.