The Federal Communications Commission (FCC) plans to spend lavishly on expanding broadband access in the U.S. The FCC’s forthcoming National Broadband Plan (NBP) will propose up to $25 billion in new federal spending to Congress to expand nationwide broadband lines and build a wireless Internet network.
The estimate includes $12 billion to $16 billion to be spent over the next 10 years to construct a wireless broadband network for police and firefighters (emergency public safety broadband system).
The FCC plans to offset the hefty spending on NBP with the revenue generated through a spectrum auction and other measures. The agency aims to auction a portion of the public-safety spectrum (airwave) called the “D-block” in 2011 to fund the spending plan.
The FCC is expected to submit the NBP to Congress on March 17, 2010. The agency is setting up strategies and an appropriate regulatory framework to promote adoption, affordability and wider availability of broadband in the U.S. However, the NBP is already under fire for being highly ambitious, unviable, lengthy and expensive.
A key recommendation that is likely to feature in the NBP is the overhaul of Universal Service Fund (budgeted at $9 billion for fiscal 2011), which subsidizes phone services in rural areas. The FCC is likely to recommend a shift of funding from traditional phone services to broadband in high-cost areas.
This would facilitate the rapid expansion of broadband services in rural regions. Approximately 14 million U.S. homes currently do not have access to high-speed Internet, mostly in rural/underprivileged areas.
The FCC recently unveiled its ambitious plan to vastly increase domestic broadband speeds over the next 10 years. The agency seeks Internet service providers to offer broadband speeds of 100 megabits per second (Mbps) to roughly 100 million U.S. homes by 2020. Existing broadband networks offer speeds in the range of 3-10 Mbps.
Another major challenge which FCC seeks to address through the NBP is more effective use of the available spectrum, which is facing impending shortages. The growing popularity of next-generation wireless devices such as smartphones and associated bandwidth-hungry data applications has boosted demand for spectrum among carriers. The FCC foresees that demand for wireless broadband services will soon exceed the supply of spectrum.
To address this need, the FCC is exploring all options to free up unused airwaves currently held by broadcasters and other licensees which could be auctioned to top-tier U.S. carriers such as AT&T (T), Verizon (VZ), Sprint Nextel (S) and Deutsche Telekom’s (DT) U.S. unit, T-Mobile USA.
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