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posted by Steven Listino on March 16th, 2010 at 8:17 PM

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Is Cheap High-Speed Internet Heading to Your Faraway Corner of the Planet?

According to a recent article in the Wall Street Journal, those in rural and other high-speed-Internet-deprived areas of the US could soon feel more connected to the outside world, thanks to a Federal Communications Commission (FCC) National Broadband Plan that would provide many with inexpensive broadband options.Resources


FCC chairman Julius Genachowski officially proposed as much as $25 billion in federal spending to be allocated to high-speed Internet lines, along with an official wireless network for police and firefighters that would also create new broadband and wireless customers and pump new money into the wireless industry. If approved, the National Broadband Plan will unfold over the next decade and strategically increase the availability of cost-effective high-speed Internet access to users throughout the US.
For the past week, the FCC has been posting official releases on its Web site further detailing the conversation surrounding the proposed plan, including transcripts of discussions about how it would expand opportunity and benefit many rural small businesses previously unable to fully compete in the marketplace due to slow connection speeds. The full details of the plan are set to be released mid-March, though Genachowski already revealed his suggestion for Congress to spend $12 billion to $16 billion for the police and firefighter wireless Internet network alone.

According to the FCC, approximately 4% of American households are without high-speed Internet service, mostly because Internet Service Providers (ISPs) and other like companies have deemed setting up shop in their rural communities too expensive. Genachowski has cited a goal of delivering 100 megabit per second service to 100 million new homes by the year 2020.

Many economists, government officials, and industry experts are concerned, wondering how much this Internet service expansion would really cost and if massive spending is smart in a time of huge federal deficits. Regardless of whether Congress goes for Genachowski's initiative, the National Broadband Plan supports a major promise of the Obama administration: to connect more Americans by expanding Internet service to all of them. Wireless giants AT&T and Verizon Communications publicly celebrated the concept in their blogs last week.

Despite the many advantages of better-connecting American rural communities, FCC spokespeople don't think Congress will approve of $9 billion in broadband spending, especially considering $7.2 billion was already added to the recent economic stimulus package.

Obviously, large phone and cable companies are already buzzing about the National Broadband Plan, which according to insiders, also does not imply regulations forcing industry competitors to share broadband lines. Some other "unofficial" details of the plan include:

- Intent to do an official, "comprehensive" review of competition among broadband providers and determine how to get better data to set fair pricing.
- A need for clarification of the policies concerning cable and phone companies' data transfer capabilities.
- A suggestion to allow the FCC to take action on smaller phone companies' outstanding complaints about the high rates they currently pay for high-volume business data lines as well as for roaming rights beyond areas of coverage.

As the National Broadband Plan has been evolving, FCC officials have had to reject quite a few ideas from other organizations. For example, some public interest groups suggested that the FCC force large phone and cable companies to share networks with competitors, which would cause major problems for many TV stations and wireless companies, causing potential service disruptions. Genachowski determined that this option to share airwaves would be voluntary; the plan would dictate that station owners would receive a portion of auction proceeds of their airwaves, a process which would require approval of Congress.

Those living and running businesses in rural America will especially benefit from the plan, since one of its biggest components is the creation of a new broadband account in the federal Universal Service Fund, an $8 billion annual program paid for by ratepayers that subsidizes the high cost of phone service in rural areas for low-income families. These same people would finally be able to enjoy the same broadband service as those in more heavily populated and urban areas. The hope, according to FCC spokespeople, is that the money in the Universal Service Fund will not have to go up from $8 billion; much of the proposed plan involves careful analysis and surveying that would help expunge much of the waste inherent in the current system. Genachowski also suggests redirecting some of the phone service funding -- which has continued to grow each year in spite of attempts to set limits -- to Internet service starting in 2012.

The National Broadband Plan, which will be neither drafted nor approved by the FCC's five-member board, is set to go to Congress in late March.


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