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CHAPTER II - BROADBAND POLICY IN THE OBAMA ADMINISTRATION

The arrival of the Obama Administration added a new energy to U.S. broadband policy at a time of economic crisis. Broadband itself, with adoption approaching two-thirds of all households and network speeds improving, had arrived at a maturity that made it central to economic and social life. As a force in the economy, high-speed networks (both wireline and wireless) were widely seen as crucial to economic competitiveness. In social life, the Internet had established itself as a “new social operating system” that was central to many people, to personal interactions and community life.1

In this context, the Federal Communications Commission (FCC) embarked on the National Broadband Plan (NBP), which made a number of recommendations on how to expand deployment of broadband networks, expand the supply of spectrum (for both commercial and unlicensed uses) and increase the number of households with broad- band subscriptions. Even though the recession made it difficult to put federal dollars behind many policy goals, overarching telecommunications policy themes in the Obama years have been to:

  • Foster investment
  • Stimulate competition
  • Close the digital divide

There is progress on each of these fronts, including $260 billion in public and private investment in networks over the past several years, with the vast majority of it from the private sector. Fast fourth generation (4G) wireless networks now cover nearly all (98%) of the country. The demand for spectrum is evident, as witnessed by the $41 billion in revenues generated in 2014 in the FCC’s Auction 97, also known as the Advanced Wireless Service 3 (AWS-3) auction. The Congressional Budget Office projected that the auction would not raise any appreciable revenue, which proved to be far off the mark. Additionally, there are a number of developments on the network deployment front— from fiber to cable network upgrades—that suggest robust competitive activity, at least in some parts of the country. And the advent of smartphones, along with steady (if not spectacular) growth in home broadband adoption, shows progress in getting more people online.

Notwithstanding these positive developments, there is reason to be wary of what R. David Edelman, Special Assistant to the President for Economic & Technology Policy at the White House National Economic Council, called a “digital disconnect.” First, the consumer experience is not always what it should be, as evidenced by how poorly Internet Service Providers (ISPs) rate in customer satisfaction surveys. The origin of this dissatisfaction is not always clear. Some of it may be as simple of some consumers finding response times from ISPs too slow in the face of service outages. Some discontent may pertain to price. The monthly fee for access may seem high for some households—and the perception that service is too costly may take hold where consumers do not have much choice among ISPs. The “digital disconnect” may even extend to some consumers’ sense of insecurity about the personal data they share online.

A second issue is the widespread sense that broadband connectivity to U.S. schools is too slow to support next generation educational needs. Although recent years has witnessed progress—77% of school districts met the 100 Mbps minimum speed goal in 2015, up from 30% two years earlier—more must be done on advancing network speed and affordability. With this rationale the Obama Administration has launched the ConnectEd initiative to invest $10 billion over five years to improve broadband network speeds at schools.

Finally, home broadband adoption among the urban poor and in some urban areas lags behind national averages significantly, as Julia Johnson, President of Net Communications, said. To address this, the Administration is implementing its ConnectHome program to expand connectivity in public housing units, which could, in time, reach more than 200,000 households. Though this initiative may be a good start on the broadband adoption issue, the stakes on this issue are high. Nuala O’Connor, President and CEO of the Center for Democracy and Technology, stated that access is a matter of “digital dignity,” and Opeymi Akanbi, Ph.D. student at the Annenberg School for Communication, University of Pennsylvania, noted that, with online access becoming more integrated into health care delivery, being dis- connected can have deleterious consequences for people and health care providers.

However one judges progress in broadband in the Obama years— both scope and rate—a number of challenges remain. If competition is not unfolding robustly enough, what measures will spark it? Are there models that can close home broadband adoption gaps? If a “digital dis- connect” abides in consumers’ minds, what can ease worries about the security of personal information that flows through communications networks?

To answer these questions requires equal measures of aspiration and pragmatism. If a future broadband marketplace is to be competitive, it is worth asking what such a market would look like—and what it would accomplish. If it does not accomplish the goals stakeholders articulate (for example, goals relating to digital inclusion), understanding market failures is crucial. And, not least, stakeholders must contemplate challenges that may fall outside the traditional bounds of competition policy. Aspirations have to be matched with policy proposals that can bring life to visionary goals.


FOOTNOTES
1 Lee Rainie and Barry Wellman, Networked: The New Social Operating System. Cambridge, MA: MIT Press, 2012.

 
 
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