President Obama Announces Steps for Affordable Universal Broadband: Competition and Local Choice Part of the Plan

January 14, 2015
By: Peter Bernstein

It has become an indisputable fact that broadband connectivity and economic vitality go hand in glove. In the digital age it has become increasingly apparent to everyone that you literally can’t have one without the other. It is why so much attention is being paid by governments around the world to assure that broadband is not just universally available but also really fast and affordable. 

The path to broadband ubiquity has been different around the world with some combination of government investments, a host of incentives and public/private partnerships employed to get the job done. Indeed, the emphasis has been to do so sooner rather than later given the globalization of the economy and competitive necessities, but finding the billions of dollars it is going to take has become a challenge along with picking those who get funding and those who must fend for themselves. 

Here in the U.S., which is a somewhat surprising laggard when it comes to both broadband coverage and average speeds, the sense of urgency to be competitive on broadband just got an interesting shot in the arm from none other than President Obama. 

In a multimedia, video (see below), press release and a detailed report, The White House, in front of the president’s State of the Union speech, put President Obama front and center to make his case for why and how getting affordable high speed broadband connectivity deployed needs to be an urgent national priority. As will be seen below, and as has already stirred the passions of various interested parties, municipal broadband is contemplated as a key part of the mix.  

This latest focus is a follow-on to the president’s net neutrality plan to keep the Internet open to new competition while safeguarding the interests of the industry and consumers whose audience including the Federal Communications Commission (FCC (News - Alert)) which will be voting on their yet to be released proposals on February 26. 

The challenges of getting to ubiquitous broadband

If nothing else this latest salvo, as detailed in the report released as part of all this, Community-Based Broadband Solutions: The Benefits of Competition and Choice for Community Development and Highspeed Internet Access, does identify a problem. 

It notes that:

Unfortunately, competition does not extend into every market and its benefits are not evenly distributed. While the U.S. has an extensive network “backbone” of middle-mile connections (long, intra- or interstate physical fiber or cable network connections) with the capacity to offer high-speed Internet to a large majority of Americans, many consumers lack access to the critical “last-mile” (the last legs of the physical network that connect homes and businesses to the broader system), especially in rural areas. It is these last-mile connections that make higher speeds possible. For example, 94 percent of Americans in urban areas can purchase a 25 Mbps (megabit per second) connection, but only 51 percent of the rural population has access to Internet at that speed.

Competition has also been slow to emerge at higher speeds. Nearly forty percent of American households either cannot purchase a fixed 10 Mbps connection (i.e. a wired, land-based connection), or they must buy it from a single provider. And three out of four Americans do not have a choice between providers for Internet at 25 Mbps, the speed increasingly recognized as a baseline to get the full benefits of Internet access.     

What’s a country to do?

As the authors explain, competition has also been slow to emerge at higher speeds. They cite the data that says nearly forty percent of American households either cannot purchase a fixed 10 Mbps connection (i.e. a wired, land-based connection), or they must buy it from a single provider. In addition, it is noted that three out of four Americans do not have a choice between providers for Internet at 25 Mbps, the speed increasingly recognized as a baseline to get the full benefits of Internet access, and that this means they suffer with inferior service with no options in many places because competition does not exist.

The report uses the graphic below to illustrate the problem.

Here is where things get interesting, which readers probably have surmised from the title of the report. In an effort to increase competition and accelerate high-performance and high-speed broadband deployment the Obama administration is offering steps to help more communities, “Achieve these results, support economic growth, and promote a level playing field for all competitors.” 

As the release says, the administration is:

To buttress the need to get municipalities in the game, the report highlights how various cities around the U.S., including Chattanooga, TN, Wilson, NC and Kansas City, MO have enjoyed the benefits of either going it alone or, as is the case in Kansas City, working with Google (News - Alert) on having very high-speed broadband. The goal is literally and figuratively to bring every part of the country up to speed.

Consumer groups were quick to voice their support of the initiative and called on the FCC to preempt state laws that block municipalities from entering the high-speed Internet business. The voices of incumbent service providers are yet to be heard as they are studying the proposals, but there is an almost 100 percent probability they will be less than enthusiastic.  In fact, look for statement in the coming hours and days that support the president’s goal but disagree with the means to attain it. And, those will be the kind reactions.

Whether the proposals will have legs in the politically charged and highly toxic Washington, D.C. environment is to say the least problematic.  After all, embracing the theory of competition is one thing but being able to deter it and build barriers to entry is another, and incumbents have so much riding on this that the lobbying and legal dollars spent on this should it move forward will be enormous.

The real facts of the matter are that getting from here to universal, affordable and high-speed competitive (locally, nationally and internationally) broadband, deserves to be a matter of urgency.  It demands a plan of action that can be implemented sooner rather than later.  The more all of the stakeholders that are involved the better.  We can only hope partisan politics and gridlock do not get in the way.  If nothing else, between net neutrality and now municipal broadband, 2015 is certainly shaping up as one great year for watching the public policy process.  




Edited by Maurice Nagle