Blog Post

Is Cheap Wireless Broadband for Real This Time?

The FCC said today that as part of its National Broadband Plan it might allocate spectrum for a free or low-cost wireless broadband network as a means to help address the affordability of broadband for poor people. If all this sounds familiar to you, maybe you recall the efforts of M2Z Networks, a Kleiner Perkins backed venture that tried to offer filtered, low-cost broadband using WiMAX.

A source at the FCC assures me that the agency’s efforts, which will be detailed next week when the National Broadband Plan comes out, are not similar to M2Z’s plan. M2Z  wanted to offer free subscribers dialup-like speeds of 768 kbps and would have provided filtered access to the web. The source said the FCC’s plan would offer speeds “that are real broadband” and would likely involve using proceeds from the Universal Service Fund reform to offset the cost of building out a network.

However, any federal involvement in the network could lead to to a return of the filtering issue that bogged down M2Z. Those in power are easily swayed by the argument that allocating a federal resource (spectrum) to provide free broadband which children could use to access porn, could lead to negative publicity. A cynic might say this offers excellent cover for the lawmakers who may also be swayed by the telecommunication’s industry’s obvious reluctance to see low-cost or free broadband.

Any company focused on free or low-cost wireless  broadband would also have to figure out how to build a network — a multibillion-dollar proposition. For example, M2Z estimated its network buildout would cost $3-$5 billion. To put that into perspective, the stimulus dollars allocated for broadband are limited to $7.2 billion, and the USF (Universal Service Fund) is currently an $8 billion program.

Getting around a filter, offering real speeds and finding the billions needed to build out a nationwide network are all essential to any FCC plan to “consider use of spectrum for a free or very low-cost wireless broadband service,” as was stated in today’s release on the topic. I wish them luck.

Related GigaOM Pro content (sub req’d):

Everybody Hertz: The Looming Spectrum Crisis

Image courtesy of Gavin St. Ours on Flickr.

11 Responses to “Is Cheap Wireless Broadband for Real This Time?”

  1. With or without govt subsidies, is there a viable business model for high-speed wireless in rural markets? Strangely, those are the customers who are the least connected (broadly speaking), as they’re far removed from urban fiber networks. If I were building a company in this space, I would steer clear of subsidies that bring potential shackles.

  2. Brett Glass

    Government should not compete with the private sector. Want to be sure that people who are in genuine financial need (not just moochers) can buy broadband service? Distribute vouchers. Don’t harm the very providers who are busting their butts trying to roll out and improve the service.

  3. It seems surreal that 93 million Americans are not connected to broadband today. I know cost is a big issue. If not for universal service approach; where would phones, highways and electric service be? Time for affordable broadband on broadcasters white space.

  4. I suggest we refrain from using terms like “free” when talking about programs of these types. As Stacey points out, even if the spectrum is free, these are very, very expensive networks to build and operate. So what Washington really means when the say “free broadband” is “broadband that someone else pays for.”

    The only question is who.

    • Amen, I think this is just another attempt for the government to try to get more control. Cost is NOT an issue it’s more about rural areas. Anyone who has broadband available in their area can get it for around $15-$20/mo. Anyone who cannot come up with that amount of money on a monthly basis, needs more help than just free internet. They might not be blazing across the pipes, but that certainly provides very usable connectivity for what most people use the internet for.

  5. Children of people benefiting from the “Universal Service Fund” for phone can use their phone to access porn/escort/etc. service too. Actually, a 16yo kid can drive on the federally subsidized Interstate to see prostitutes too…

    Come on, the whole argument “allocating a federal resource (spectrum) to provide free broadband which children could use to access porn” is bogus. You can do so much more with free broadband, that offset the supposedly bad things you could do.

    This reminds me the internet policy in my university in early 90’s. The campus admin told us that we could watch as much porn as we want (it was pictures mostly at that time), there will be no monitoring/filtering… after a while almost nobody watch porn on campus. There are so much more interesting things to do online.

    If parents are concerned about their kids internet usage (they probably should), then they have to monitor it (like they will do with their car or TV). The gov is not a parent substitute.

    Actually, a free broadband will be cheaper for the fed than a free AND filtered one. If people thinks it is not possible to monitor efficiently their connection, then cancel you free broadband connection.

    • Loic, I agree with you, but there are still people trying to ban books, legislate sexual behavoir and impose any number of filters on aspects of all of our lives simply because it offends them. And politicians listen to them, because they moan the loudest in forums that politicians pay attention too. So a debate over filters may be in the future.

  6. @Stacey,

    The free or low-cost wireless broadband aspect of the NBP seems to address the lack of affordability issue identified in the FCC’s research on broadband released previously. This plan element may be an attempt at establishing a price floor that would make broadband affordable to most americans. I happen to be of the opinion that a price floor is needed as I view broadband as a key element of the nation’s (US) infrastructure that is indeed out of reach for many. In other words, this may be the “post office” of broadband, and i’m all for it.

    My $.02,


    • by saying it’s the “post office” of broadband, are you saying it is going to be a poorly run organization that is going to lose of billions of dollars annually? Or that it’s the inefficient alternative to private sector providers? If this is the case. I totally agree.