Who Will Stimulate Broadband Growth, and How?
Who Will Stimulate Broadband Growth, and How?
Two weeks ago, the Wall Street Journal reported that cable and telephone companies were gearing up for a clash with the Federal Communications Commission over how best to spend the $7.2 billion slated for broadband improvements as part of the Obama administration’s stimulus package. In what FCC chairman Michael Copps described as the “biggest responsibility given to the FCC since the Telecom Act of 1996,” the package stipulated that the FCC would be the agency charged with providing a road map that dictated how tax dollars would be spent to build or upgrade internet lines across the United States. It also was charged with showing how every American could have access to broadband and service that runs much faster than the service currently available.
Not surprisingly, this mandate raised the hackles of those in the business of providing internet service to customers. “If the government were to suddenly suggest it will get into the business of deciding how networks should be designed, that would be chilling,” said Walter McCormick, president of the US Telecom Association, as quoted by the Wall Street Journal. Phone and cable companies—typically the largest of the internet providers—argue that imposing government regulations in this arena might stifle investment and be counterproductive. The FCC has until February 2010 to submit its recommendations.
Now that money from the stimulus package is starting to flow, the waters are only getting murkier. The Wall Street Journal reports that officials from 38 states have told the Obama administration that they should have a big say in how broadband stimulus money is allocated in their states. Not only that, they want stimulus money to hire full-time employees to help them review applications from private companies looking for a piece of the stimulus package.
While billions have already been spent through existing programs like Medicare, Community Development Block Grants, and highway funding mechanisms, stimulus funds will now be handed out based on competitive proposals, not existing formulas or programs. And the federal government didn’t exactly provide any criteria for picking out the winners. States feel like they have a more intimate knowledge of their communications environment, geography, and demographics, while others feel that the feds should exercise more control, fearing that otherwise, money may flow to the best politically-connected companies, not necessarily the best companies for the job.
All this may have significant implications for the wireless industry as well, as people are using wireless more and more to access the internet. In a new advertising campaign, Sprint Nextel, for example, is touting its strengths as a data network, not just a voice network. In one television spot, Sprint Nextel brags that at any point in the day, 1,041,667 emails and 233,000 Twitter “tweets” are flying through its 3G network.
After all, when it all comes down to it, the next big revolution in broadband is simply this: get rid of the wires altogether. Here’s hoping the FCC takes that, and other things, into consideration as it formulates its plan—and decides to stay out of the censorship game altogether.
Who Will Stimulate Broadband Growth and How - To learn more about this author, visit Robert Pothier's Website.
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Internet service providers fighting with the Federal Communications Commission. The feds grappling with the states. This is what you get when you wave a $7.2 billion dollar bill around—did you expect anything less? And the stakes involved are no less than the future of America’s information technology infrastructure.
Two weeks ago, the Wall Street Journal reported that cable and telephone companies were gearing up for a clash with the Federal Communications Commission over how best to spend the $7.2 billion slated for broadband improvements as part of the Obama administration’s stimulus package. In what FCC chairman Michael Copps described as the “biggest responsibility given to the FCC since the Telecom Act of 1996,” the package stipulated that the FCC would be the agency charged with providing a road map that dictated how tax dollars would be spent to build or upgrade internet lines across the United States. It also was charged with showing how every American could have access to broadband and service that runs much faster than the service currently available.
Not surprisingly, this mandate raised the hackles of those in the business of providing internet service to customers. “If the government were to suddenly suggest it will get into the business of deciding how networks should be designed, that would be chilling,” said Walter McCormick, president of the US Telecom Association, as quoted by the Wall Street Journal. Phone and cable companies—typically the largest of the internet providers—argue that imposing government regulations in this arena might stifle investment and be counterproductive. The FCC has until February 2010 to submit its recommendations.
Now that money from the stimulus package is starting to flow, the waters are only getting murkier. The Wall Street Journal reports that officials from 38 states have told the Obama administration that they should have a big say in how broadband stimulus money is allocated in their states. Not only that, they want stimulus money to hire full-time employees to help them review applications from private companies looking for a piece of the stimulus package.
While billions have already been spent through existing programs like Medicare, Community Development Block Grants, and highway funding mechanisms, stimulus funds will now be handed out based on competitive proposals, not existing formulas or programs. And the federal government didn’t exactly provide any criteria for picking out the winners. States feel like they have a more intimate knowledge of their communications environment, geography, and demographics, while others feel that the feds should exercise more control, fearing that otherwise, money may flow to the best politically-connected companies, not necessarily the best companies for the job.
All this may have significant implications for the wireless industry as well, as people are using wireless more and more to access the internet. In a new advertising campaign, Sprint Nextel, for example, is touting its strengths as a data network, not just a voice network. In one television spot, Sprint Nextel brags that at any point in the day, 1,041,667 emails and 233,000 Twitter “tweets” are flying through its 3G network.
After all, when it all comes down to it, the next big revolution in broadband is simply this: get rid of the wires altogether. Here’s hoping the FCC takes that, and other things, into consideration as it formulates its plan—and decides to stay out of the censorship game altogether.
Who Will Stimulate Broadband Growth and How - To learn more about this author, visit Robert Pothier's Website.
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