As FCC details national broadband plan, hurdles emerge

In an ambitious bid to make high-speed Internet service faster, cheaper, and more widely available, the Federal Communications Commission (FCC) will unveil a “national broadband plan” Tuesday that outlines a decade-long course to bring more Americans online.

The plan that was mandated by Congress is not only an effort to increase the availability of fast Internet and boost speeds to 100 megabits per second (Mbps), about 20 times faster than the current average, but also to put the US on equal footing with nations where broadband adoption is much higher.

But the broadband plan is already raising hackles among large telecoms, many of whom view it as a first step toward government regulation of the Internet. Others are bristling over a request that broadcasters voluntarily relinquish parts of their unused broadcast spectrum to improve mobile broadband networks.

According to an executive summary of the plan released Monday, the FCC recommends:

• Boosting the amount of spectrum for broadband expansion to 500 megahertz (TV stations currently have about 300) by auctioning off unused spectrum.
• Shifting $15.5 billion from the Universal Service Fund, which was created to bring telephone service to rural areas, to expand broadband service.
• Increasing transparency in the Internet service market to “ensure consumers have the pricing and performance information they need to choose the best broadband investment.”
• Improving the infrastructure for delivering broadband.

While early cost estimates for the plan come in at $350 billion, the FCC said in the summary that the “overall plan will be revenue neutral, if not revenue positive.” It said that much of the cost of the broadband plan could be offset by auctioning off unused spectrum.

Industry analysts say the spectrum question creates the biggest hurdle for the FCC as Congress begins to weigh in on the plan this week. Broadcasters are already saying they oppose giving up their part of the airwaves, as that would hamper future broadcast innovation such as providing more high-definition broadcasting.

“If we have the political will, we can reclaim the licensed and unlicensed spectrum our wireless networks need to thrive,” wrote FCC Chairman Julius Genachowski in a Sunday Washington Post Op-Ed promoting the plan.

Redirecting billions from the Universal Service Fund (USF) will require a lot of political maneuvering, as rural telephone service providers are likely to resist the move.

As The Wall Street Journal pointed out in a Monday editorial, free marketeers are also likely to chafe at the government's broadband plan. "In 2009 alone, broadband providers spent nearly $60 billion on their networks," the Journal said. "Absent any evidence of market failure, the best course for the FCC is to report back to Congress that a broadband industrial policy is unnecessary."