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Saturday, 17 October 2009 17:32 |
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Eliminating Internet backhaul ripoffs is by far the most effective step the FCC can take to increase broadband availability, it became obvious at the broadband hearings. Some other choices I think important, not in a strict order.
- Upgrade rural cablecos which offer TV but not data. About 4M U.S. households (SNL Kagan figure) can't get cable modems although they can get TV. Many, probably most, can be upgraded for less than $500. It's a major failure they weren't identified in the first funding wave. Upgrading 1M homes would cost less than $500M, 8% of the $7.2B in the stimulus. The whole $7B probably won't reach thet many if they don't get things together.
- Find the waste in the $20B ICC and USF programs, much of which is ill-spent. That will provide more than enough money to fund a further broadband buildout, subsidies for the poor, and the other priorities in the plan. I strongly believe in universal service, but not the level of subsidies that allow the RLECs to come to wall street and claim they are twice as profitable as the bells. They exagerrate, but much of the money is shoveled in the front door from the government and out the back door to certain "rural" telcos. Among other things, we still spend $hundreds of imllions every year for "high cost switches" when no one has bought a high cost switch for the better part of a decade.
- Make sure not to pay retail for any subsidies.
- Make far more spectrum effectively available. While opening more spectrum is a good thing, there's five or ten times as much potential for improving present uses. Mike Calabrese has some ideas here and I written how to create more spectrum.
- "Use it or lose it" on renewal
- Get serious about not subsidizing things the companies will pay for anyway
- Recognize that a small number of homes - perhaps half a percent or 1.5% - are brutally expensive to reach terrestrially and consider satellite. We can get to around 99% of the U.S. for half of the $20B and $35B estimates in the FCC slides; $10-20B for 99% may be more realistic than $20-40B first projected. New generation satellites can deliver 5 meg or more to many, with reduced but still poor latency. Not the best, perhaps, but perhaps a better choice than a subsidy of $10,000/home. Research on just where the highest costs are is crucially important if the budget requires drawing a line.
- Recognize that 5-10% of the U.S. will not have high speeds without government action and target that group. 90% will soon have 50 megabits available from DOCSIS or telco fiber, but many of the remainder will only be offered low megabits. "Action" doesn't mean subsidies, of course; there are plenty of other tools to encourage incremental buildout.Tie up the Comcast-NBCU merger until they reach most of their 200K unserved, for example, and they'll cooperate.
- If the incumbents don't build, fund some who will. Stephen Timms started doing this in Britain, and suddenly BT discovered it was economical to reach 99.6%, included Welsh highlands and Soctish Islands.
- Regular press conferences make it harder to duck important issues.
- Some crucial data is missing, including the details of what it will take to reach the "unserved" that might have a strong impact on decisions. Other information - yet another demand model - should fall to lower priority if needed to get answers to the crucial questions.
I jotted down an outline of these thoughts on the train to D.C. to meet with some of the folks working on the Broadband Plan. I didn't do a "presentation" but in the spirit of disclosure I wanted to review them publicly. I wrote this quickly in that spirit. If I have any errors, please let me know ASAP to correct them. These are my comments, not theirs. On October 16, I had the chance to talk with Blair Levin, lead economist Scott Wallsten, and several staffers. |