- Published: 13 January 2015 13 January 2015
Program will help far fewer than 10%. Barack has a delightfully folksy video chat about needing better and more affordable broadband. http://bit.ly/WHbunkum He flew out to Ceder Falls to make a second speech. http://bit.ly/WHCedar Unfortunately, his proposals are highly unlikely to impact 5% of Americans and almost certainly won't reach 7%. (Proposal below)
The only item of apparent substance is Obama's plan to override state laws in a minority of the country that prevent cities from building municipal systems. That's the right thing to do, but won't affect many people. Even if the proportion of municipal broadband in the states affected doubles or triples, that's less than 5% of U.S. homes. Doubling or tripling would be a surprise.
If you want to help more than 10% or 20% you therefore have to make the incumbent bring down prices.
This is very hard politically in the U.S. and Obama didn't even try.
Which means that Obama's plan will help very few. I'm calling it the seven percent solution, because it probably won't have any impact on more than 7% of homes.
Almost no one in the U.S. is willing to look at the kind of policies that help even a third of the U.S. population.
To really make a difference, you have to find policies that work when competition has and will fail. Possibilities go far beyond the obvious price controls and unbundling. The FCC right now can bring the cost for a reasonable service down to ~$10/month for millions of poor people. Comcast already offers that; AT&T should as well. Wheeler should look AT&T CEO Randall in the face and say, "If you want your $50B AT&T merger, you have to match Comcast's $10 offer for the poor."
Not getting that concession from AT&T would be unconscionable.
Obama calls for a new committee and a conference. The NTIA will run some workshops and publish a few pamphlets. The Department of Agriculture will continue their (very modest) broadband grants program, with little or no additional capital. He's "calling for the Federal Government to remove all unnecessary regulatory and policy barriers to broadband build-out." Blair Levin and the U.S. Broadband Commission made the same official call five years ago. So have the last three FCC Chairman and every politician who has addressed broadband. There weren't many unnecessary barriers then and there are fewer now.
The experience in the 30 states without anti-muni laws is not much different than in those with the laws. There hasn't been a visible surge in builds even where allowed. There's no reason to expect a huge increase in muni networks because of the law change. 1-3% of U.S. homes might get better broadband in the next few years. A good thing but what about the other 95 million homes?
I strongly support muni broadband where it is likely to work. Some U.S. munis have been successful and that's great. Others have been disasters. Two big ones, Burlington Vermont and UTOPIA in Utah, went spectacularly broke. Both spent many thousands per home in neighborhoods similar to those Verizon is reaching for about $600 per. Efficiently building fiber networks is hard; few have done so without an established organization experienced in field builds.
Burlington and UTOPIA wildly overestimated the number of homes that would switch from an existing provider. The reluctance of homes to switch providers is a key reason very few new ISPs in the U.S. have been successful for many years. U.S. cable is pretty darn good, bringing 50+ megabit networks to > 90% of the country. Most people hate to switch, which requires changing the home network in ways difficult for many. Changing also brings new emails and other problems most people prefer to avoid if they are doing OK.
Here's the White House politician-speak
Last November, the President outlined his plan to keep the Internet open to new competition and innovation by safeguarding net neutrality — which will help ensure no one company can act as a gatekeeper to digital content. But there is more work to do so that every American has access to a free and open internet. This is particularly true in areas where broadband competition is lacking, resulting in high prices and slow service.
High-speed, low-cost broadband is paving the way for economic revitalization not
just in Cedar Falls, but in places like Chattanooga, TN and Lafayette, LA — which
have Internet speeds up to 100 times faster than the national average and deliver it at
an affordable price. To help more communities achieve these results, support
economic growth, and promote a level playing field for all competitors, the Obama
• Calling to End Laws that Harm Broadband Service Competition: Laws in 19 states —
some specifically written by special interests trying to stifle new competitors — have
held back broadband access and, with it, economic opportunity. Today President
Obama is announcing a new effort to support local choice in broadband, formally
opposing measures that limit the range of options to available to communities to
18spur expanded local broadband infrastructure, including ownership of networks. As
a first step, the Administration is filing a letter with the Federal Communications
Commission (FCC) urging it to join this effort by addressing barriers inhibiting local
communities from responding to the broadband needs of their citizens.
• Expanding the National Movement of Local Leaders for Better Broadband: As of
today, 50 cities representing over 20 million Americans have joined the Next
Century Cities coalition, a nonpartisan network pledging to bring fast, communitysupported
broadband to their towns and cities. They join 37 research universities
around the country that formed the Gig.U partnership to bring fast broadband to
communities around their campuses. To recognize these remarkable individuals and
the partnerships they have built, in June 2015 the White House will host a
Community Broadband Summit of mayors and county commissioners from around
the nation who are joining this movement for broadband solutions and economic
• Announcing a New Initiative to Support Community Broadband Projects: To
advance this important work, the Department of Commerce is launching a new
initiative, BroadbandUSA, to promote broadband deployment and adoption.
Building on expertise gained from overseeing the $4.7 billion Broadband Technology
Opportunities Program funded through the Recovery Act, BroadbandUSA will offer
online and in-person technical assistance to communities; host a series of regional
workshops around the country; and publish guides and tools that provide
communities with proven solutions to address problems in broadband infrastructure
planning, financing, construction, and operations across many types of business
• Unveiling New Grant and Loan Opportunities for Rural Providers: The Department
of Agriculture is accepting applications to its Community Connect broadband grant
program and will reopen a revamped broadband loan program which offers
financing to eligible rural carriers that invest in bringing high-speed broadband to
unserved and underserved rural areas.
• Removing Regulatory Barriers and Improving Investment Incentives: The President
is calling for the Federal Government to remove all unnecessary regulatory and
policy barriers to broadband build-out and competition, and is establishing a new
Broadband Opportunity Council of over a dozen government agencies with the
singular goal of speeding up broadband deployment and promoting adoptions for
our citizens. The Council will also solicit public comment on unnecessary regulatory
barriers and opportunities to promote greater coordination with the aim of
addressing those within its scope