US telecom regulator Federal Communications Commission (FCC) has reportedly unveiled its ambitious plan to catapult domestic broadband speeds over the next ten years. The agency seeks Internet service providers (ISPs) to offer broadband speeds of 100 megabits per second (Mbps) to roughly 100 million US homes by 2020. Existing broadband networks offer speeds in the range of 3-10 Mbps.
Announced by the FCC chairman Julius Genachowski on February 16, 2010, the proposal (called the “100 Squared” initiative) represents a part of FCC’s National Broadband Plan (NBP) which the regulator is expected to submit to the Congress on March 17, 2010. The agency is setting up strategies and an appropriate regulatory framework to promote adoption, affordability and the wider availability of broadband in the US.
Under the NBP, FCC plans an overhaul of the $8 billion Universal Service Fund (USF), which subsidizes phone services in rural areas. The regulator is likely to recommend a shift in the funding from traditional phone services to broadband in high-cost areas. This will enable more people to access high-speed broadband services in the US, especially in remote rural areas. The FCC is also working on unlocking spectrum for future 4G wireless broadband deployments.
The FCC’s proposal follows Google’s (GOOG) recent broadband strategy. The search engine giant recently unveiled its plan to venture into the world of Internet as it aims at building an ultra high-speed broadband network in the US. The network will be capable of delivering peak speeds of up to 1 gigabit per second (Gbps), nearly 100 times faster than today’s regular broadband deployments.
Roughly 500,000 Americans may benefit from this deployment. According to industry estimates, the US is currently ranked eighteenth in the world in terms of broadband speeds, behind Korea, Japan and France. Approximately 14 million US homes currently do not have access to high-speed Internet. Average throughput level offered by the existing broadband deployments is 4 Mbps, much slower than the speeds offered by ISPs in major Asian and European markets.
FCC’s ultimate goal is to make the US the world’s largest market of blazing fast Internet users. The regulators perceive that faster broadband speeds will accelerate the economic growth and foster job creation. The 100 Squared initiative will boost investment in broadband which will benefit network equipment vendors including Cisco Systems (CSCO) that supply routers and switches.
Leading US cable operators such as Comcast (CMCSA), Time Warner Cable (TWC) and Charter Communications currently offer broadband services capable of delivering theoretical speeds in excess of 100 Mbps, enabled by the revolutionary DOCSIS 3.0 platform. DOCSIS 3.0 services are already available to more than 50 million cable customers and are expected to surpass 100 million users in the next few years.
The FCC’s latest broadband plan has drawn mixed reactions from US telecom carriers. Qwest Communications (Q) has called the agency’s proposal unrealistic while Verizon (VZ) sees a clear possibility of achieving the proposed network throughput level.
Verizon stated that it currently offers peak speeds of 50 Mbps and has successfully tested a 100 Mbps network based on its coveted FiOS footprint. AT&T (T), the largest broadband service provider among the US telecom carriers, has stated that the FCC should resist stringent regulations that may throttle huge investments required to achieve the 100 Squared proposal.
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