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In Defense of the National Broadband Plan

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I’m grateful that Craig Settles responded to my offer to debate the National Broadband Plan in his column earlier this week. In such a discussion, it’s important to be clear about where we agree and disagree. In this case, the disagreements appear rooted in Mr. Settles’ apparent unfamiliarity with the National Broadband Plan, his lack of understanding the mechanics of the current Universal Service Fund, and his unwillingness to engage in the standard incremental cost/benefit analysis that Congress expects.

Mr. Settles first critiques the plan’s proposal to set the minimal level of broadband speed to be subsidized through the Universal Service Fund. He notes that I asked any critic to answer three questions: What is the minimum speed to be subsidized; how much will it cost; and how will we pay for it? He doesn’t answer any of these questions.

To the first, he says it’s a “trick question,” as the goal isn’t speed. We agree speed isn’t the ultimate goal, as he notes later. But it is an essential, rather than a trick, question. If the federal government is going to subsidize networks in areas where market forces won’t do the trick, then the government has to establish a technical standard for what is being subsidized. Mr. Settles refusing to answer the question of what that standard should be suggests he doesn’t understand that without such a standard, the government could end up subsidizing narrowband speeds, an outcome I’m sure he would not favor.

To the second question  — What would it cost? — he says, “one hellava a lot.” That answer might work for Mr. Settles’ work. I think, however, Congress and the American people deserve a more meaningful answer. For people interested in how the plan provided specific answers for a variety of scenarios, I would refer them to the 137-page technical appendix to the plan found here.

To the third question, he suggests we look at the model demonstrating how three communities found ways to build gigabit networks without federal dollars. If he means we as a country should let municipalities do the job, then it’s illogical to criticize the federal government for not providing enough support. Further, it’s odd he ignored Recommendation 8.19 in the plan that proposes Congress overturn state laws that prohibit such municipal efforts. If he’s arguing municipalities should have the power to meet their citizens’ needs as they see them, then we agree. I wish more attention were paid to that recommendation, as some municipal efforts are quite promising, and as a matter of principle, laws restricting deployment by any party are unwise.

But if, as he seems to suggest in other parts of his critique, we should use universal service to fund higher speeds to residential areas, then we do have an important disagreement. We proposed a plan that would result in everyone having access to networks at speeds (4Mbps actual down/1Mbps actual up) higher than the average user uses today and fund it through reprioritizing existing universal service funds. Mr. Settles appears to suggest we need to subsidize speeds of 100Mbps everywhere. (If I’ve misinterpreted him, I apologize and hope he will clarify.) That would cost over $300 billion in new money, and if collected through the current system, would add an additional $30 a month to every subscriber’s bill, causing broadband to become unaffordable to tens of millions of current subscribers. Surely, we don’t want to adopt a policy that results in a massive drop-off of broadband use, yet that would be the consequence of adopting Mr. Settles’ proposal. Further, we saw no evidence that the incremental benefits of increasing speeds from 4Mbps to 100Mbps for homes that don’t enjoy access to such networks is anywhere remotely close to the incremental cost of $300 billion.

Mr. Settles then goes on to suggest that 4Mbps is too low because it won’t be enough for business purposes. He’s right, but he ignores that the plan’s 4Mbps target is for homes, not businesses. The data we collected suggested that businesses today in most of America have no problem getting access to the speeds they need. (For a full discussion of the data, see the report noted above.) We were concerned about the future, which is why we proposed, as one of the six goals, a gigabit connection to an anchor institution in every community, and developed some ideas — such as eliminating rules that prohibit anchor institutions from sharing networks — to advance that goal. Mr. Settles ignored this goal — which is designed to assure business class connectivity to every community — and the policy proposals, and instead, implies that the plan recommended wireless will serve all businesses’ needs. That simply isn’t accurate.

Mr. Settles questions whether the research we did was “hands-on.” It consisted of, among other things, 36 public workshops involving over 10,000 people, 31 public notices generating over 23,000 comments and nine public hearings. We made presentations in eight public Commission meetings so everyone would know what we thought the facts were, where we saw the gaps and what we thought the solutions were.

Mr. Settles also challenges some personal statements I’ve made, as is his right. He disagrees with my prediction that “4G is going to end up being more important to more people over the next couple of years than increases in wireline speed.” I made that prediction based on a number of market trends, such as growth in smart phone purchases, use of mobile applications, investment trends in networks and consumer surveys. His response, which is,“for a great many places, broadband speeds are not pretty good” is both contrary to the prevailing data we saw and not relevant to the question of where the upside for consumers is in the next several years. I would be happy to engage in a wager as to the primary way consumers access the Internet five years from now, and will put my money on wireless.

He also challenges a statement I made as to why we didn’t recommend a new unbundling regime by saying we must protect against monopolistic behavior. While I agree we need such protections, I was responding to a specific proposal we believed would have stifled investment and competition. If he believes we should have adopted an unbundling regime, he should be clear about it, but also clear about the details of such a regime, such as what the wholesale discount rate should be.

In addition, he takes a comment I made about shifting funds from subsidizing numerous wireless carriers in a market (in some areas, the government subsidizes more than a dozen wireless companies) to instead focus the funds on areas without any broadband providers as evidence I don’t want competition. I’m not opposed to competition, but think that subsidizing construction of a 4Mbps-capable network where there is currently no broadband provider is a higher priority than subsidizing a dozen voice competitors where the market already provides multiple consumer options.

His comment is particularly surprising, as I’ve read other comments from him in which he criticizes wasteful Universal Service Fund spending. I would have thought he would agree that spending public money to subsidize multiple competitors should not be our highest priority.

We do agree on two important areas. First, we agree broadband is a critical economic development tool. There are a number of recommendations in the plan that relate to that understanding, as well as a specific chapter (Chapter 13) that details a number of proposals for improving how we can use broadband to drive economic development. In addition, I recently published a paper for the Knight Commission which called for creating a universal service fund to run a competition for local governments to come up with demonstration projects for utilizing broadband for economic development. (It can be found on pages 27-28.)

I also profoundly agree with the spirit of Mr. Settles’ headline: “Some Assembly Still Required.” The best line in the plan is the beginning of the final chapter, on implementation: “This plan is in beta and always will be.”

While I’m very proud of the work the team did to produce the plan and believe its recommendations lead us in the right direction on many fronts, I’m certain it’s far from perfect and hope that as it’s implemented, it’s constantly improved.  For that to happen, critics will have to answer the same questions we struggled with, formulate specific policies based on hard data, and acknowledge the hard trade-offs necessary to move our country forward. Mr. Settles has a distinguished career writing about community broadband, but his critique of the National Broadband Plan doesn’t rise to the standard he has previously met, nor the standard we need to improve on the plan.

Blair Levin, served as FCC Chief of Staff from 1993-1997, and returned to the FCC in 2009 to lead the team that wrote the National Broadband Plan. He is currently a fellow in the Communications and Society Program at the Aspen Institute.

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22 Responses to “In Defense of the National Broadband Plan”

  1. Longmont, Colorado; We have witnessed an interesting dance amongst the providers and can boast access across the spectrum of speed and affordability.

    Longmont Power & Communications has provided their services at some of the lowest rates in the country since the early 1900’s. They installed a fiber ring in the late 90’s, and the 2000’s saw a privately owned spur run to an exclusive neighborhood, as well as an expanded ring around the City. Schools, Government and businesses access the fiber ring.

    Comcast owns the franchise and competes with Qwest and several wireless/satellite ISP’s. A private wireless mesh network was installed and suffered the financial fate of most “muni” wi-fi efforts, resulting in several different owners. The clear solution was for the voters to allow LPC to offer Internet services which would mean assuming the mesh network assets which are on the fiber ring backbone.

    It was a brilliant plan that Comcast and Qwest killed with money and mailers. So much for supporting available and affordable access! Here is a brief timeline of the events
    Ironically, Boulder County had seized the assets and they were auctioned off a month after the election, allowing private enterprise to purchase and continue to operate the mesh network in cooperation with the City. There are far more options now from as little as a 2 hour portable hot spot to FTTH if you can afford to pull it. Comcast cable, Qwest DSL, Open Range, SkyBeam also remain and compete in the space.

    Longmont has a rich menu of options because of municipal foresight, planning and collaboration with the private sector – not enough to beat the big boys in the most expensive campaign on record for this town, but with determination and a little luck, private enterprise and the City government were able to pull off a broadband access hat trick with fiber, mesh and Wi-Max for the people.

    And, for those reasons, Craig Settles has visited this town …

  2. When will mainstream Americans be able to support a National Broadband Plan, when the “experts” are finding it so hard to focus on a common-cause?

    With the FCC’s focus now on service adoption, should the issue of broadband *affordability* move to the forefront — with speed and cost/Mbps as ingredients within this debate?

    My point: is the “real total cost” of telecom services in the U.S. a primary reason why those that don’t adopt broadband are holding back? Apparently, Gov leadership in America consider these services to be a vice — the combined taxes and mandated fees on a typical user bill (~20%) are similar to the penalties being applied to tobacco and liqueur. Why, I’m puzzled?

    Moreover, I wonder where America would be today if just a small fraction of the $300 billion that was collected via the Federal Excise tax on telecom services was actually invested in related infrastructure improvement projects.

    Universal Service Fund mismanagement and waste is a tiny misdemeanor, when compared to this fiasco

    • The experts generally do understand what’s going on with American broadband, it’s the others you have to worry about.

      The non-adopters have been profiled by a number of studies which have found the principal barriers to be lack of computer ownership, lack of computer literacy, the fear of identity theft, and cost. The nations that have high broadband use, such as Korea, created programs five years ago to address these issues and how have adoption rates over 90%. Korean broadband policy is in a phase now that they call “post net-neutrality” with tiered backbone service and massive fiber deployment. It helps that the Koreans tend to live in high-rise apartment buildings, of course, as Stagg Newman observed at one of the NBP panels.

  3. You asked about the Aspen Institute’s arrangements with people leaving the FCC. The Communications and Society Program, which I direct, has brought on the last four Chairmen of the FCC as Senior Fellows after their Chairmanships. Two were Democrats and two Republicans. The Institute itself is non-partisan and non-profit. We also offered a similar fellowship to Blair Levin after his term as director of the office that wrote the Broadband Plan. We gain the benefit of their advice, and they have a place to go after their government service without having to worry about interviewing for jobs while in the government and whether they are going to have conflicts. We pay the fellow a modest stipend for his time at the Institute.

    • Thanks for explaining, Charlie. It’s a shame that think tank fellows don’t make the magnificent salaries that the unwashed think they do.

      Blair left a perfectly decent job to go develop the National Broadband Plan, and he shouldn’t be reduced to selling pencils on a street corner for performing this public service.

  4. I guess my question to Blair would be — why’d he split?

    He re-joined the FCC, wrote the plan, then left to collect a check at Aspen Institute.

    (The Aspen Institute is an equal opportunity purchaser of FCC talent FYI, having previously hired on Republican FCC chairmen Michael Powell and Kevin Martin…)

    Maybe GigaOm could shed some commentary and light upon those arrangements…

  5. I’m often amused by the people who rant about what I do for a living or what I advocate without having a clue on either count. Geez, just do a Google search once in a while. For example, I constantly push for public-private partnerships in which communities and providers find ways to bring broadband in that’s mutually beneficial to everyone involved. Like this column here –

    Or they go off on the issue of wasting dollars on consumer use of the Net. Clearly these critics don’t realize that for 5 years I’ve preached a rather non-socialist gospel that the financial driver of community broadband is improving local economic development, increasing home-based businesses and overhauling the business operations efficiency of institutions including academic and government. With the financial sustainability that comes from these paying anchor tenants on the network, consumers will benefit, particularly underserved populations.

    And of course, there’s that favorite rant that I deny the presence of plenty of competitors. What I tell people is that communities can have several providers, but few or none able to provide the bandwidth needed to achieve the ambitious outcomes in economic development, telemedicine, education, etc. that the Nat’l Broadband Plan champions – Steps need to be taken to remedy the situation, of which there are plenty of options from all political spectrums.

    Like so much discourse on public policy, with broadband I find after some of my columns a fair number of people easily descending into sound-bite criticism and un-researched labeling peppered with inflammatory words like “socialist” “moron” and (somewhat contradictory) “profiteer.” Such empty noise. Mr. Levin and I have been reading each other’s work for a while, so we have a basis for critiquing each other. Some of you commentators need to engage in a little more homework and a lot less noisemaking.

    • You’re dodging the issue I raised with your analysis, Craig. You said the FCC report found that fast broadband is not generally available, but the report didn’t study availability, it studied adoption. 95% of American homes are passed by cable, and cable can support 160 Mbps shared with the DOCSIS 3 technology that’s in various stages of deployment and 36 Mbps share with DOCSIS 1.1 and 2.0 that’s currently running everywhere.

      High speed wired broadband is generally available to the American people.

      • Actually, I’m not dodging the issue. You challenged my statement regarding results in a report written about in an article I linked to, and you did so by referring to a report on availability. They may or may not be the same report, but the facts in the article relate to what broadband services are available to people – “About 68 percent of connections measured at the end of 2009 were below the 4Mbps download and 1Mbps upload speeds.” – NOT an article on adoption. Read that article. And if you still have an issue, take it up with them.

      • The FCC report you reference is titled “Internet Access Services: Status as of December 31, 2009.” It says on page 1:

        “First, the data track subscribership, or adoption, of services of different speeds; they do not directly measure the availability of services of different speeds. That is, if service connections of different speeds are available to a particular consumer for purchase – from one or more suppliers
        – then the only connection that will be counted by Form 477 is the one the consumer actually

        As I said, the FCC report is about adoption, not about deployment; they say so themselves. So why are you maintaining it’s not what the FCC says it is?

      • You’re linking to a news article about the FCC report, but I’m linking to the actual FCC report itself. I quoted the part on page 1 that contradicts your claim.

        Kindly admit that the FCC report does not cover the issue you say it covers and we can move on.

        It’s not about deployment, it’s about adoption. Put on your man pants and step up.

  6. The entire idea of this government intrusion is ridiculous. If anything is done, it should be only a ‘bottom limit’ (say, 1Mbps down, 384Kbps up) to prohibit ISPs ‘speed-banning’ disfavoured sites, while still allowing ISPs to profit from speed boosts for sites that pay a premium and clients who pay for faster access rates – via capitalist principles. Anything more will drive rates up in a government-controlled network and cause the Internet to collapse into a Socialist morass. Businesses are, by definition, premium clients who can pay their own way to ultrahigh bandspeed and bandwidth, so they don’t need this lame subsidy. Settles can go stick his tongue on a winter lamp-post, we don’t need him, his Socialist intrusion, or his resultant high subscription fees.

  7. Craig Settles’ article was grossly inaccurate, and I’m surprised Blair Levin took the time to react to it at all. His position – and that of “community broadband” advocates generally – is that vast swathes of America are woefully under-served by the market system and can only achieve broadband satisfaction if local government takes over the construction and operation of regional networks. To support the claim he maintains that a recent FCC report “says 2/3 of Americans do not have providers that offer the minimal speeds (4 Mbps down, 1 Mbps up)…”

    The report says no such thing, of course. It examines the *rate plans that consumers choose*, not the vast array of plans that are available to 95% of Americans. The reasons that Americans go for rock-bottom plans and that close to 30% of the Americans who could buy broadband plans choose not to buy it at all are interesting to discuss, but we have to understand the facts before we can have that discussion.

    One of the keys is the fact that most of the non-participants don’t own computers, for example; the Broadband Plan addresses that one. And it’s not just cost, because the average American pays more for cell phone service than the market price of basic wired broadband.

    The NBP recognizes that the shift to mobile broadband is on, and that mobile broadband is potentially much more transformational than faster ultra-fast wireline can ever be. You can’t take the fiber with you. But it’s not an either/or. Mobile broadband needs backhaul, and that’s where the wires come into the picture. To assert as Settles does that a national broadband plan should forget about 4G and pull fiber to every farm is simply ridiculous.

    The Plan has its shortcomings, but it was a very serious attempt at synthesizing an enormous amount of data and analyzing it seriously. Its critics would do well to approach the plan in a sober way rather than on their traditional hobbyhorses.

    I suspect community broadband advocates are less interested in developing a technical infrastructure than they are in spreading the fairy dust of “community empowerment” that generally leaves the community with a massive debt and a stagnant network five years out, after the promoters have moved on.

    Regarding Christopher Mitchell’s comment, it’s not the wires that are the problem, it’s the dearth of high-speed interconnection facilities. That’s why the communities that have overbuilt regional networks find their access to far away places is no better than it ever was.

    To speed up a network, you have to address the real bottlenecks, not the imaginary ones. The coax cable that serves American homes with triple play today is already running at 2.4 Gbps, and doesn’t need replacing, it just needs re-purposing.

  8. Trying to discuss something as large as the National Broadband Plan in a few words is quite difficult, so I’m not going to wade in substantially. But I tend to agree with many of Craig’s criticisms.

    Blair’s plan ignores competition except for noting that we can’t have the same policies here that created competition in the rest of the world because they are unpopular with powerful carriers who claim they would invest less if such policies were implemented.

    Of course, the evidence lies opposite the threats – investment is a function of competition, not the level of regulation – but this is little surprise from an Obama Administration that has generally talked tough about regulated in the public interest and then backed down when powerful interests fought back.

    As for whether or not Munis should lead the way, that is not something Craig has limited himself to. Craig has encouraged communities to work on this issue – a larger group of actors than just local government. And he has encouraged smart partnerships — after all, the most rural folks have no muni to help them.

    As for 4G – well, wireless is great for mobility, but for economic development and rural health care and the other important uses of broadband — we need wires. Specifically, fiber-optic cables. I congratulate Blair for the Plan’s call for 1Gbps to Community anchor institutions. I hope this is implemented in a way to allow communities to use it to spur competition for existing monopolies and duopolies.

  9. The national broadband plan is awful for the industry. Mostly high frequency band spectrum has been identified which is not cost effective to build; just look at Clearwire.

    The FCC should have focused on 600 MHz to 1 GHz. Unfortunately, the commission has folded under the power of the broadcasters and Google and now the available 600 MHz spectrum is going to useless white spaces. You guys cant figure out what you are doing with the 700 MHz D block. I hope you dont waste it on Public Safety who has more than they need. The FCC’s behavior over the 800 MHz band has been deplorable over the last 6 years. Part of 900 MHz needs to be repurposed now that SMR and paging are archaic technologies.

    FCC, I am waiting for you do one thing that is actually in the best interest of the public.