How Cutting-Edge Technology & Science Are Powering The Future TPM Idealab
In his speech, Obama likened his push for broadband access to the building of the first transcontinental railroad, the electrical grid and the highway system.
"Today, more than 90 percent of homes in South Korea subscribe to high-speed broadband. Meanwhile, in America, the nation that created the internet, only 65 percent of households can say the same. When it comes to high-speed internet, the lights are still off in one-third of our households. For millions of Americans, the railway hasn't come yet. For our families and businesses, high-speed wireless service is the next train station; the next off-ramp. It's how we'll spark new innovation, new investments, and new jobs."
Officials have been mum for weeks about the details of exactly how they will amp up infrastructure and free up spectrum to offer wireless broadband connectivity to 98 percent of the country within five years. And it's not just a question of "how," but also, with the deficit creeping to an estimated record high of $1.5 trillion in 2011, "how much."
The government has committed $10.7 billion to establish an interoperable public safety network for first responders, and more will come from the Federal Communications Commission's Universal Service Fund, an $8 billion annual budget earmarked to improve telecommunications in under-served rural areas. There are also plans to seek legislation for a one-time $5 billion increase to that fund. The rural buildout will be coordinated with the public safety use, said Jason Furman, deputy director of the National Economic Council. "Some of this is dual-purpose. The same dollar can build the same tower," he said.
The initiative will eventually pay for itself, Furman said. "We can reduce our deficit, expand our wireless access and expand our public safety. It all fits together."
To free up spectrum space, the government will offer compensation to government agencies who make their spectrum use more efficient, and the FCC will hold incentive auctions in hopes of claiming broadcasters' spectrum.
The White House's Office of Management and Budget predicts that the auctions will net $27.8 billion after incentives. Much of that will be reinvested to pay for the nationwide 4G rollout, with $9.6 billion leftover to cut the deficit and $3 billion to start the Wireless Innovation Fund to support the research and development of new technologies.
Danielle Coffey, the vice president of governmental affairs at the Telecommunications Industry Association, called the plan "a very deliberate, well-established and really thoughtful effort on the part of the White House and the FCC."
"The more incentive and financial support that we can get, that's obviously pleasing to us, because we count on federal funding to reach hard-served areas where there's a lot of dirt between cell phone poles," she said.
Telecom analyst Jonathan Schildkraut at Evercore Partners agreed that, though the expansion won't be very noticeable in major urban areas already saturated with wireless, "the ability to access that broadband on a seamless basis as you move around the country" will benefit everyone.
"This can have active impact on the broad economy. Broadband capability is a vast step forward," he said. "When you couple that with other technology shifts that are going on, pushing more of the workload into the internet and getting smarter devices, like tablets and smart phones, it should lead to a major productivity jump. Providing funding to get all that done makes a big difference."
Chief Technology Officer Aneesh Chopra said the expansion is about "our ability to tap into that entrepreneurial spirit" and spoke extensively Wednesday about how broadband will allow startup companies in rural areas to compete and thrive.
"It's about an economic story of empowerment, it's about small business owners," he said. "They will all be enabled, increasingly, by this infrastructure."