New year, new policy push for universal broadband

Newly apparent D.C. focus centers on widespread and faster connectivity, seemingly at the expense of strict Net neutrality regulation, Stanford law fellow Larry Downes observes.

Larry Downes
Larry Downes is an author and project director at the Georgetown Center for Business and Public Policy. His new book, with Paul Nunes, is “Big Bang Disruption: Strategy in the Age of Devastating Innovation.” Previous books include the best-selling “Unleashing the Killer App: Digital Strategies for Market Dominance.”
Larry Downes
6 min read

Editors' note: This is a guest column. See Larry Downes' bio below.

I'm finally recovering from the case of information overload I caught at the Consumer Electronics Show in Las Vegas earlier this month. A great deal of policy was discussed at gadget central, thanks to the hard work of Tech Policy Central, which, for the first time at CES, put on a partner conference focused on information law and policy.

Boiling down my notes from the entire week, it's clear that the White House is developing an ambitious new plan to support information technology that previous administrations simply didn't have. The emerging emphasis on IT could lead to very positive developments, particularly for Internet companies and users.

Over the next few months, the details of this policy will become clearer. But for now, the federal government is trying hard to communicate its belief that IT has become a key driver of economic performance. Expect more announcements and initiatives aimed at stimulating efforts to accelerate IT adoption by businesses, consumers, and the government itself.

The push for universal broadband
The new policy is centered around a National Broadband Plan currently being drafted by the Federal Communications Commission. (The original delivery date of February 17 has been delayed a month.) Although the plan was mandated by Congress as part of the 2009 stimulus bill, the commission and the White House have taken the opportunity to rethink many old assumptions about technology policy.

Although there are some grumblings, notably by Rep. Darrell Issa (R-Calif.) of the House Oversight and Government Reform Committee, about a lack of transparency in the preparation of the document, the Obama administration and FCC speakers at CES were all enthusiastic about the so-far undisclosed contents. Meanwhile, FCC Chairman Julius Genachowski praised the FCC staff and outside experts who have been working on the plan over the past year, noting that the scope of the project was "unprecedented" in the history of the agency.

There's no doubt that the plan will make universal broadband access for all Americans a national priority. Universal access will be defined as affordable, high-speed Internet availability throughout the United States and will rely on a combination of fiber, cable, satellite, copper, and high-speed wireless. (I heard no mention of broadband over power lines, a technology that has shown promise but has so far been held back by regulatory inertia.) Set-top box technologies that will make televisions act more like computers are also critical, particularly to lower-income Americans.

The administration believes that an aggressive rollout of higher speeds and full coverage will translate to faster economic recovery and increased competitiveness for U.S. businesses. Although broadband Internet access is currently available in 90 percent of the United States and installed in roughly 73 million homes, as a percentage of population, the U.S. currently ranks eighth in overall broadband penetration.

The big question is how to fund the investments needed to achieve this ambitious goal. Leading companies in the communications industry have made multibillion-dollar investments in broadband infrastructure throughout the dot-com crash and the current recession, but it's clear that a great deal more money is needed to fill the gaps in coverage and increase transmission speeds overall. The U.S. faces geographic, economic, and sociocultural challenges to universal adoption that smaller and more urban countries don't.

Neil Fried, minority counsel to the House Energy and Commerce Committee, repeated a much-cited figure that making 100Mbps broadband available to every American home will cost an additional $350 billion in infrastructure upgrades. By comparison, the stimulus bill allocated only $7 billion for broadband projects. The proposal process contained so many restrictions on how the funds could be spent that none of the major players even applied.

So the vast majority of this investment is going to have to come from the private sector, which spent an estimated $60 billion just in 2008. Indeed, private-sector investment became a major theme of the conference. Genachowski, by my count, used the phrase "private investment" seven times in his comments at CES.

The fate of Net neutrality
One casualty of the National Broadband Plan, it seems, will be Net neutrality regulations. In October, the FCC issued a Notice of Proposed Rulemaking, as promised by Genachowski the month before, that would codify existing FCC policy and extend it, notably to wireless Internet providers.

The proposed rules, if adopted later this year, would, among other things, prohibit ISPs from offering premium, or "fast lane," service to content providers over the parts of the network they control (that is, the last mile to the consumer). The deadline for initial public comments on the proposed rules expired last week.

Although most of the major ISPs have written publicly and in their comments to the commission that they support the principles of Net neutrality, there is strong opposition to at least some of the rules the FCC has proposed and to the idea that it should fall to the FCC to implement and enforce these principles. Many key features of the proposal remain undefined, including which exceptions to neutrality will be permitted in the interest of "reasonable network management." On enforcement, the proposal eschews specifics in favor of operating on a "case by case" basis.

In a piece I wrote for CNET during CES, I argued that the push to make the National Broadband Plan a reality was leading the administration to back away from its proposed Net Neutrality rules--or at least from the militant language that accompanied their introduction. (Genachowski, for example, initially called for an FCC that would act as a "smart cop on the Internet.") The proposed rules were seen by investors as limiting their ability to make back the billions of dollars they were putting into Internet infrastructure, I wrote, and that, in turn, was making the White House nervous about the prospects for its ambitious broadband goals.

This is not to say that the FCC is abandoning the proposed rulemaking. But the tone of the rhetoric has changed markedly, both in comments made at CES by White House, FCC, and Department of Commerce speakers, and in recent filings by, in particular, the Justice Department and the Commerce Department as part of the National Broadband Plan. How that change translates in a final decision on the proposed rules and their enforcement, if they--or some more moderate version of them--are ultimately approved by the FCC, remains to be seen.

Also in play
The fate of Net neutrality may also depend on the outcome of an important development that took place during CES--but on the other side of the country. On January 8, hours before Genachowski took the stage at CES, the D.C. Circuit of the U.S. Court of Appeals heard oral arguments in an appeal by Comcast over sanctions the FCC issued against the company in 2008 for throttling customer speeds when using certain peer-to-peer applications, notably BitTorrent.

As was widely reported, the three-judge panel considering the appeal questioned government lawyers severely, leading many media sources to predict that the sanctions would be reversed. Such questioning, however, may signal nothing more than concern about the legal footing on which the FCC based its authority to issue the sanction. And the court's decision and opinion could be months away.

But if the court rules broadly that the FCC has no authority to regulate ISPs under current law, the focus of the Net neutrality debate will shift from the FCC's rule-making back to Congress. Since 2007, several bills have been floating around committees that would give the commission explicit authority and a mandate to enforce some version of Net neutrality. There are also bills, notably one introduced in October by Sen. John McCain (R-Ariz.) that would prohibit the agency from proceeding.

Given the other priorities in Congress, no one would place bets right now on which bills may move forward, or when. How Congress responds to the National Broadband Plan and the White House's increased emphasis on the Internet as the engine of economic recovery are the more interesting developments to watch.