Broadband Stimulus Applicants Hold On for a Long, Bumpy Ride

Getting a Better Read on the First Round NOFA

Broadband: Consistent with the FCC's (News - Alert) current line on broadband, the definition for broadband relative to the first round of broadband stimulus funding is at least 768 kbps downstream and at least 200 kbps upstream.

Nondiscrimination & Interconnection: As expected, the NOFA addresses the issue of nondiscrimination and interconnection, two terms when first mentioned within the broadband stimulus discussion raised the hackles of many large incumbent service providers. The NOFA's requirements around nondiscrimination and interconnection are vague, but pretty consistent with what the FCC has already said regarding these topics. Unserved Area: An unserved area is "composed of one or more contiguous census blocks, where at least 90 percent of households in the proposed funded service area lack access to facilities- based, terrestrial broadband service, either fixed or mobile, at the minimum broadband transmission speed. A household has access to broadband service if the household can readily subscribe to that service upon request."

Underserved Area: An area is underserved for "last mile" projects if no more than 50 percent of the households in the area have access to facilities-based, terrestrial broadband service at greater than the minimum broadband transmission speed set forth in the definition of broadband above; no fixed or mobile broadband service provider advertises broadband transmission speeds of at least 3 Mbps downstream in the area; or the rate of household broadband subscribership is 40 percent or less. An area is considered underserved in terms of "middle mile" networking if one interconnection point terminates in a proposed funded service area that qualifies as unserved or underserved for last mile projects.

Sizing Up Our Future National Broadband Plan
By Paula Bernier

When the American Recovery and Reinvestment Act of 2009 became law in February it sent shock waves throughout the communications industry. At first it was shock that the broadband stimulus was only $7.2 billion, a measly figure by some accounts considering various industry groups were looking for something closer to the $40 billion range. But, as anyone who's been following the Obama administration's national broadband effort knows, the $7.2 billion program is just the first chapter in this story. The plot thickens with the National Broadband Plan.

In remarks at the first National Broadband Plan public workshop on Aug. 6, FCC Chairman Julius Genachowski (News - Alert) said "Here's the challenge: nearly 40 percent of all Americans do not have broadband in the home. And if you earn less than $50,000 a year, or you are a minority or you live in a rural area, chances are better than 60 percent that you are on the wrong side of the digital divide. That is why President Obama and the Congress have taken two important actions to extend broadband's benefits to more Americans. First, they included $7.2 billion for broadband deployment in the Recovery Act. Second, they have charged the FCC with developing a national broadband plan." The FCC has less than a half a year left to put together the National Broadband Plan, which is supposed to be completed by February. The plan is expected to help make broadband more widely available in the U.S., particularly to the underprivileged, in an effort to improve efficiency, involvement and growth on a number of fronts. Service providers also hope this grand plan will offer a clearer picture of how the FCC and others in government intend to regulate various aspects of broadband.

The commission this fall has held a series of workshops on various issues related to the National Broadband Plan effort. Each workshop has focused on a different topic, such as civic engagement, public safety and education. A notice of inquiry issued by the FCC in April also offers some insight into what might be included in the National Broadband Plan. The NOI discusses a wide variety of issues and invites comment on how the National Broadband Plan should address them. It casts a wide net, seeking input on everything from how to define broadband, among other terms; to how to address universal service; to whether things like deep packet inspection and behavioral advertising might limit broadband usage.

"We certainly expect that the commission's primary focus, which will follow on the heels of what President Obama had discussed greatly on the campaign trail, is the need to ensure that there is universal access to broadband services," says Jonathan S. Marashlian, an attorney with Helein and Marashlian, LLC – the CommLawGroup, which represents Dash Carrier Services (News - Alert), a company providing wholesale carrier products and services for IP telephony rollouts. "And we believe the broadband agenda is going to drive changes in other programs [that] are fundamental to ensuring broadband access, whether that's to traditional telephone services or, in this new environment, broadband."

It would be virtually impossible to create a plan to ensure universal broadband without first addressing the problems with the Universal Service Fund, adds Marashlian. Part of the problem with the USF is that it has seen a "seismic shift" in its revenue base in recent years, Marashlian continues. That, and the convergence that is now occurring between traditional and broadband, IP-based networks as well as the emergence of over-the-top application providers, were not foreseen several years ago when Congress created the universal service provisions of the Telecommunications Act of 1996, he notes. "We're on the side of advocating in favor of any regulatory scheme being in favor of the next-generation of technologies and not one that merely is imposed to [support] the status quo of the past 100 years of traditional telephony networks," says the Dash Carrier Services' attorney.

While some look forward to the National Broadband Plan to create – or at least lay the foundation for – specific rules and regulations in hopes there will be more certainty in the marketplace, others seem to have more of a race-against-the-clock mentality in terms of government involvement. Mike Manzo, chief marketing officer of transactional intelligence outfit Openet (News - Alert), notes that government tends to only step in when there is a conflict of interests. From Manzo's view, public policy never quite gets it right; so he believes it is to the advantage of warring parties to work together – without the involvement the government – to reach tenable solutions. "Everyone loses when a fight occurs," he says.

By way of example, Manzo mentions the recent row between BT (News - Alert) and the BBC. The telecom operator throttled back the broadband connections of users who enjoyed online video services such as the BBC's iPlayer and YouTube (News - Alert), spurring a quarrelsome back-and-forth in the press between BT and the BBC, and the possibility of regulatory involvement.

Of course, similar arguments between network owners and over-the-top providers are taking place in the U.S. and elsewhere in the world. Given these discussions and the fact that we're seeing bandwidth usage go through the roof due to new user additions and the introduction of devices like the iPhone (News - Alert) (and new iterations of said devices with such capabilities as video recorders), Manzo believes the issue of net neutrality/fair use will come to a head later this year or early next. Rather than looking at over-the-top players as threats, however, network operators should try to partner with them, Manzo suggests. For example, BT would probably have been better off had it asked the BBC if it could help promote the iPlayer service and possibly even suggested the two companies forge a revenue-share agreement and bundle the application and network connectivity to provide customers with a better experience. Manzo says network operators and others with an interest in online advertising should also take a proactive approach to prevent further elevation of consumer and government privacy concerns relative to targeted advertising.

They can do that by giving consumers control over what advertising they receive, he says, noting that studies have shown more than 80 percent of people will probably opt in and provide "pretty deep" profile information for online advertising programs if they're given ample control. Creating these kinds of alliances and having such studies at the ready as regulators decide on the direction of communications policy going forward could help interested parties more effectively steer things in the right direction for the future.

Editor's Note: Richard "Zippy" Grigonis contributed to this article.