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Getting a Read on the National Broadband Plan

By: Paula Bernier

The National Broadband Plan – or at least the first draft of it – has now been revealed to the world. And, as Vice President Biden might say, this is a big (fill-in-the-blank) deal.

The plan, which the Federal Communications Commission was assigned to put together per the American Recovery and Reinvestment Act, is meant to be the nation’s blueprint for making broadband more widely available, affordable and accepted within the U.S., as well as useful in meeting national goals related to the economy, education, energy, health care and more.

“The big take away for me from reading through and studying the plan is that it provides a balanced approach that is holistic and comprehensive in nature,” says Kevin Morgan (News - Alert), director of product marketing for ADTRAN, an equipment company that has been active in educating its customer base, legislators and regulators about broadband and the federal government’s efforts related to it. “The FCC (News - Alert) could have delivered a more targeted plan that focused just on broadband networks. Instead, they went above and beyond the call by tying in the entire broadband ecosystem. This is the biggest development to hit our industry since the 1996 Telecom Act, and the plan serves as the ‘starting gun’ that will guide our industry for the next decade.”

The National Broadband Plan lays out six long-term goals for the country. According to the FCC, at least 100 million U.S. homes should have affordable access to actual download speeds of at least 100mbps and actual upload speeds of at least 50mbps. The United States should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation. Every American should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose. Every American community should have affordable access to at least 1gbps broadband service to anchor institutions such as schools, hospitals and government buildings. To ensure the safety of the American people, every first responder should have access to a nationwide, wireless, interoperable broadband public safety network. And, to ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption.

“Affordability is a key theme of this plan and competition is absolutely necessary to make this happen,” Teresa Mastrangelo, principal analyst of broadbandtrends of The Windsor Oaks Group LLC, tells INTERNET TELEPHONY. “Even though the plan calls for a comprehensive review of wholesale competition – its focus is primarily to increase competition to small business and enterprise, not the consumer market that makes up the majority of broadband consumers. The FCC does focus on encouraging wireless-wireline competition for low-end packages, but there [are] few recommendations that would increase competition for services that support the 100-squared goal.”

And despite all the hub-bub over the FCC’s “100-squared” plan to bring 100mbps downstream access to 100 million homes, the universal broadband goal is to facilitate the deliveryof 4mbps downstream and 1mbps upstream “actual speeds” by 2020. The FCC also aims to implement a program to ensure no state lags significantly behind the 3G wireless coverage national average.

The FCC calls for the creation of the Connect America Fund to support the 4/1mbps effort, and the establishment of a Mobility Fund related to the above-noted 3G goal.

According the commission, the Connect America Fund could get at least part of its money from the Universal Service Fund. The FCC in the National Broadband Plan suggests that $15.5 billion over the next decade should be shifted from the USF to the CAF. The commission also gingerly notes that Congress might consider allocating additional public funds for broadband.

“If Congress wishes to accelerate the deployment of broadband to unserved areas and otherwise smooth the transition of the Fund, it could make available public funds of a few billion dollars per year over two to three years,” the FCC writes in the National Broadband Plan.

Additionally, the FCC indicates it would like to issue an order to implement the voluntary commitments of Sprint (News - Alert) and Verizon Wireless to reduce the High-Cost funding they receive as competitive ETCs to zero over a five-year period as a condition of earlier merger decisions.

“Sprint and Verizon Wireless received roughly $530 million in annual competitive ETC funding at the time of their respective transactions with Clearwire and Alltel (News - Alert) in 2008. Their recaptured competitive ETC funding should be used to implement the recommendations set forth in this plan,” the FCC says. “This represents up to $3.9 billion (present value in 2010 dollars) over a decade.”

The FCC also hopes to require rate-of-return carriers to move to incentive regulation, and to redirect access replacement funding known as interstate access support toward broadband deployment.

“… the conversion to price-cap regulation would be revenue-neutral in the initial year of implementation, assuming that amounts per line for access replacement funding known as Interstate Common Line Support would be frozen,” according the National Broadband Plan. “Over time, however, freezing ICLS would limit growth in the legacy High-Cost program on an interim basis, while the FCC develops a new methodology for providing appropriate levels of CAF support to sustain service in areas that already have broadband. This step could yield up to $1.8 billion (present value in 2010 dollars) in savings over a decade.”

The FCC also calls for long-term intercarrier compensation reform aimed at eliminating distortions created by recovering fixed network costs through per minute rates for the origination and termination of traffic. That, the commission suggests, should involve moving carriers’ intrastate terminating switched access rates to interstate terminating switched access rate levels in equal increments over a period of two to four years.

“The FCC has authority to establish a new methodology for ICC, but Congress could make explicit the FCC’s authority to reform intrastate intercarrier rates by amending the Communications Act in order to reduce litigation and expedite reform,” the commission writes.

Additionally, per minute charges should be incrementally phased out between now and 2020, according to the FCC, which adds that to offset ICC revenue decreases there should be gradual increases in subscriber line charges.

The National Broadband Plan also talks a lot about how the FCC will continue to collect information about where broadband is available, with what performance and at what prices. And the FCC in the plan calls for broadband service providers to be clearer on what exactly they’re selling. It suggests service providers need to move away from marketing their services with “up to” broadband rates and instead advertise the “actual” rates.

“Fixed broadband consumers … have little information about the actual speed and performance of the service they purchase,” according to the plan. “Marketing materials typically feature ‘up to’ peak download and upload speeds, although actual performance experienced by consumers is often much less than the advertised peak speed.”

Mastrangelo says she’s very pleased with the FCC’s recommendation to significantly increase its metrics related to data collection, including location-specific subscriber data such as advertised price vs. paid price, churn, provider, speed, termination fees, contract lengths, bundles and promotions.

“In addition, they recommend collecting information on mobile broadband, although they do not provide specifics on measurements,” she says.

“This type of collection will enable the FCC to better understand competition at a local level, to understand how operators in one market can offer significantly different packages and prices than in another, perhaps smaller market,” Mastrangelo adds.

She also expresses her appreciation for the FCC’s recommendations associated with disclosure of broadband performance and the concept of a digital label.

“However, we are disappointed that the FCC is making no recommendations regarding metering – such as requiring ISPs to provide a capability to consumers that will enable them to better understand their usage,” continues Mastrangelo. “In fact, the entire concept of bandwidth metering was not addressed at all in the plan.”

What the FCC does suggest, as Mastrangelo alludes to with her mention of a digital label, is that broadband service providers should be required to provide consumers with a better idea of what’s inside their packages, just as automobile manufacturers do with their miles-per-gallon vehicle stickers and the food industry does via nutritional labels. The FCC suggests that it should work with the National Institute of Standards and Technology to establish and update over time broadband measurement standards and methods. Key characteristics that might be measured under this new effort include actual speeds and performance over a broadband service provider network as well as end-to-end performance of the service; actual speeds and performance both at peak hours and over a set time period; and actual speeds and performance tested against to-be-decided future standard protocols and applications.

However, it’s worth noting that the FCC does not focus this transparency discussion solely on fixed broadband for consumers. The commission recommends the development of broadband performance standards for mobile services, multi-unit buildings and small business users as well.

Speaking of wireless, the National Broadband Plan also talks about freeing up and allocating additional spectrum for unlicensed use in an effort to foster innovation and more competition in broadband services.

“Currently, the FCC has only 50mHz in inventory, just a fraction of the amount that will be necessary to match growing demand,” the commission writes. “More efficient allocation and assignment of spectrum will reduce deployment costs, drive investment and benefit consumers through better performance and lower prices.”

That said, the FCC recommends that government officials make 500mHz of spectrum available for broadband within 10 years, and 300mHz available for mobile use with five years. It also talks about being more flexible with how it allows spectrum to be used, and it discusses an interest in updating rules around wireless backhaul spectrum use to increase capacity in urban areas and range in rural areas. The FCC also wants to promote wireless expansion and adoption by expediting action related to data roaming.

Another interesting part of the National Broadband Plan is the language around how the FCC and other regulators might make basic infrastructure like conduits, poles, rights of way, and rooftops more affordable and accessible for those who build new broadband networks.

“Ensuring service providers can access these resources efficiently and at fair prices can drive upgrades and facilitate competitive entry,” the FCC writes.

Plan recommendations to optimize infrastructure use include establishing low and more uniform rental rates for access to poles, and simplifying and expediting the process for service providers to attach their facilities to poles; establishing best practices around rights of way and related fees; and implementing “dig-once” policies so broadband service providers’ new network deployment efforts are coordinated with federally-financed highway, road and ridge projects when it makes sense.

Of course, all of the above is just the tip of the iceberg in terms of what is discussed on the National Broadband Plan.

As Mastrangelo notes, while the comprehensiveness of the plan is noteable, it’s also a pretty long to-do list.

“In general, I was impressed by the comprehensive nature of the plan, but I am concerned that it is too much to try to accomplish simultaneously,” she says. “There are many dependencies in this plan, in which any change could have a drastic effect on its implementation. It will have to be carefully and skillfully managed.”

Indeed. And although the plan is at once ambitious and lacking in some details (such as, according to Mastrangelo, clear definitions on what is considered robust, affordable, and high-quality), it seems like a pretty good place to start.

The National Broadband Plan as it now stands opens the dialogue on how to address some very complex challenges such as how to make broadband more accessible and appealing to a larger part of the U.S. populace, and how to reform the Universal Service Fund and intercarrier compensation, among many other important issues. It is a lot to take in all in one document. But, then again, if not now, when? IT

Government Can Influence the Broadband Ecosystem in Four Ways

  1. Design policies to ensure robust competition and, as a result, maximize consumer welfare, innovation and investment.
  2. Ensure efficient allocation and management of assets government controls or influences, such as spectrum, poles, and rights-of-way, to encourage network upgrades and competitive entry.
  3. Reform current universal service mechanisms to support deployment of broadband and voice in high-cost areas; and ensure that low-income Americans can afford broadband; and in addition, support efforts to boost adoption and utilization.
  4. Reform laws, policies, standards and incentives to maximize the benefits of broadband in sectors government influences significantly, such as public education, health care and government operations.

Source (News - Alert): The National Broadband Plan

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