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Executive Summary

The communications policy environment carries great expectations for broadband’s transformational potential, yet accompanying these hopes are potential risks on the horizon. Over the past two decades, the Internet has evolved from a hobbyist’s technology into a bedrock infrastructure for communications, commerce, civic activity and social life. Society is at a point where those impacts will deepen further. The Internet transports more data faster than ever before and our ability to put that data to use promises huge changes in how we manage our personal health, households, education and work life.

Yet within the swirl of change and expectation come uncertainties. Technological innovation drives economic change, but it does not negate the possibility for market concentration in networked industries. Equity concerns—who has access to the latest gadgetry and who does not—is an abiding worry and may take on new consequence as digital tools become more pervasive in society. With data about people’s behavior, health, learning habits and households driving new applications, new consumer protection issues arise around data privacy and security.

This context served as the backdrop for the 30th Annual Aspen Institute Conference on Communications Policy, entitled “The Future of Broadband Competition.” The question that animated discussion was: How can broadband markets continue to deliver economic and social benefits that improve the quality of life in America? The answers fell into three categories:

Breaking down bottlenecks in the marketplace. For consumers, the ideal future broadband market will have at least two “gigabit plus” providers in addition to one or more 5G wireless providers. This should provide sufficient competitive pressure to avoid the pitfalls of a stagnant broadband marketplace, but this outcome is not inevitable. In many areas of the United States, multiple gigabit plus providers will be economically infeasible.

Ensuring inclusion. The level of home broadband subscriptions in the United States is not sufficient to ensure an equitable distribution of the benefits of digital applications. The evolving market will help solve this problem, but the market by itself will not be sufficient to address the scale of the remaining digital divide.

Enhancing information security. The benefits of pervasive data notwithstanding, it has created a sense of vulnerability among consumers about the data they share with business and government. Action is needed so that the bad actions of a few in the data environment do not have wider repercussions for consumers and innovation.

To give substance to each of these topics, conference participants made the following recommendations:

1. Improve the investment climate for fiber networks
Wireline broadband networks are capital intensive, which creates the possibility that a given geography may only attract one provider of multi- gig connectivity. Without the possibility of an additional provider, such areas run the risk of having a stagnant monopoly as their sole broadband provider. Policy should work to prevent the stagnant monopoly case, while recognizing that no more than two wireline networks may be economically viable in a given region (and in some regions, even a single multi-gig network may not be economically viable). Even in that case, the resulting duopoly should have incentives to upgrade networks and compete for customers.

To realize the vibrant duopoly case, government and industry must develop a playbook to lower the cost of network deployment. This means compiling the necessary data to make network deployment cheaper; such data would, for example, facilitate permitting to access rights-of- way and represent an inventory of utility pole and conduit information. Municipalities should also have the legal authority to build their own fiber networks; while this may make economic sense in a limited number of cases, having that authority could establish a credible threat of entry that would drive network upgrades by incumbents. Places that prohibit municipal broadband should be ineligible for Connect America Fund network subsidies.

2. Ensure the availability of spectrum for 5G wireless networks
Although 5G wireless remains ill-defined, its potential to change the market is great. It holds the potential to change network architecture and draw market entry in broadband from non-incumbents (i.e., adjacent market entry). This underscores the urgency of ongoing initiatives to increase the supply of spectrum for commercial and unlicensed use. These initiatives include the incentive auction for broadcast spectrum and methods to share government spectrum with the private sector.

3. Develop “smart vouchers” to promote broadband adoption
Current campaigns to promote broadband adoption do not address the scale of the problem. Public funding has dried up as Recovery Act dollars have expired and well-crafted private initiatives, such as Comcast’s Internet Essentials, do not extend nationwide. At the same time, public and private programs have resulted in a “community of practice” that represent viable models for increasing broadband adoption.

The development of a Smart Voucher program would give low- income populations the financial assistance to subscribe to broadband. Developing the program would start first with a pilot project to deter- mine the size of the voucher—though the likely level would be greater than the current $9.25 per month level for the FCC’s Lifeline program for telephones. Given the size of the non-adopting population in the country, eligibility would extend beyond very low-income populations. The voucher would be good for purchasing service that supports key applications, such as two-way video and real-time voice, though supported service levels would not be the highest speeds offered in the market.

4. Invest in training on the Internet and computers for eligible populations
Smart vouchers should also be coupled with funds for training to assist eligible populations to acquire the digital skills to take advantage of the Internet. Voucher recipients could receive larger voucher amounts if they complete digital skills training. Funding for training programs should be channeled to community institutions through a new block grant program.

5. Think expansively in promoting information security for consumers
Urgency was the watchword to describe deliberations on the need to provide people the assurance that their personal data is secure enough so that they can embark on the emerging next generation of digital applications. Steps stakeholders should take to do this proved difficult to specify. To better marshal forces at the federal level, a new entity—the Federal Information Security Council—is worthy of consideration. Yet, given the time to ramp up such an entity, it may make sense instead to give the Federal Trade Commission more resources to address information security. And whatever actions are taken at the federal level should not supplant state action on information security. An alternative mechanism—namely a less formal collaborative platform that serves as a forum for all stakeholders to respond to information security challenges—has promise. But this approach leaves open important details such as governance and enforcement.

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