Obama's $40 Billion to Internet Providers

Cheap broadband has made possible everything from "triple play" residential service bundles to enterprise-class telepresence. Try using a unified communications suite with a 56 Kbps analog dialup connection. It isn't pretty.

That's why I'm earnestly in favor of President Barak Obama's proposed infusion of $40 billion into Internet service providers so that everyone in America has broadband access to the Internet (and each other). Whereas I tend to agree with many of my conservative-minded friends that government should get out of the way of people, I do believe that broadband is as important to our citizens' lives as air, water, highways, bridges and other parts of the core infrastructure. Just as this country would be hobbled without its highway system, our populace is subdued by the lack of broadband throughout the land. In short, the government should aid in ensuring that the U.S. is a leader in broadband Internet access.

Yes, you can point out that the telecom industry is getting broadband to the masses in metropolitan areas and many towns, but that is not enough. Broadband is strategic and allows workers to work for companies anywhere in the world. I for one believe the ingenuity and inventiveness of Americans is something we have which differentiates us from workers in many other countries. Broadband is the new baseline in communications for a civilized society, just as telegraphy was in the 19th century and telephony was in the 20th century. According to the Organization for Economic Cooperation & Development (OECD), the U.S., once ranked 4th among developed countries in terms of broadband penetration, has fallen to 15th, behind such little countries as Denmark, the Netherlands and Norway.

Back on May 23, 2008, the Economist.com (www.economist.com) noted the work of Paul David, an economist at Oxford University, who has shown that when electric power was introduced in the 1880s, it didn't immediately raise human productivity. It was not until 50 percent of America's industrial machinery was powered by electricity that you saw a real increase in productivity. His theory is therefore that a new technology needs a 50 percent adoption rate before it has a real effect.

Interestingly, although the U.S. ranking in terms of broadband penetration has fallen to around 15th among developed nations as reported by the OECD (which appears disturbing), the first six countries on the list have penetration rates of around 30-35 percent, so we could still effectively leapfrog over them and reveal the genuine benefits of broadband by surpassing 50 percent penetration.

Of course, there is more here than simply creating construction jobs to bury fiber and build WiMAX and LTE base stations. The important thing about broadband is not just broadband itself or how fast it goes, but what one actually does with it. That's why Obama's plan or something like it, if put into effect, means that a new wave of entrepreneurs could start companies like Google and Yahoo! given their access to better and faster broadband connections.

Ironically, I don't think my right-wing friends would really mind Obama's plan, since we're all for tax cuts and the plan is said to call for tax breaks for companies that extend the availability of broadband into new regions, or, in areas where it already exists, increase the speed of service.

People on the far left politically fear that any tax credits would benefit mostly the existing broadband providers such as AT&T, Verizon and Comcast, since it's easy for them to increase the size and speed of their existing networks, or serve more people in their coverage areas.

Perhaps so, but what interests us is, once again, what people actually do with the broadband - the interesting applications and services that start-ups are developing to run over fast connections. Unified communications suites will have a far greater impact when everyone can connect to them (and each other) using broadband.