February 2009 Archives

Everyone I've talked to in DC either agrees with or won't deny that a best-case scenario timeline for broadband dollars to start being distributed as grants or loans is 4-6 months.

Here's a quick flyby of what needs to happen before money start flowing: First we have to define terms like "underserved", then we have to put together the rules that establish what kinds of projects are eligible/encouraged and open them up for public comment, then we have to give time for everyone to prepare/submit applications, then we have to review them in detail, then we have to weigh the merits of competing applications, and only then are we finally able to start handing out money.

But I have a serious problem with us accepting that half a year is the best we can possibly hope for. Why? Because I'm a Minnesotan by birth so I know that if money doesn't get out until August or September that means very little broadband's going to be deployed this year. Why? Because it gets very cold in Minnesota very early.

We need to recognize that for the northern third of the country you can't lay a lot of broadband in the winter and it's winter from at least October until April.

If we're going to get any stimulus effect out of these dollars this year we need to find a way to make capital available right away so that shovel-ready projects can start deploying immediately.

But it's going to be nigh impossible for government to vet grant and loan applications any faster than the timeline laid out at the beginning of this post without inviting a lot of waste, fraud, and abuse into the system. So the only way we can responsibly speedily subsidize deployment is through the creation of a fast-track partial loan guarantee program.

By government stepping in to share the risk we'll unleash a wave of private capital without government having to write a single check upfront. And by relying on the private capital market's to vet which projects deserve funding, we can speed up the process so projects can be funded and deploying in April rather than August.

In this way we can insure that northern states don't miss out on another year's worth of opportunities to do the good work that's needed to get our rural and unserved areas wired up.

Our economy as a whole and rural America in particular can't afford to wait for the gears of government to get up to full speed. We need to be figuring out we can turn subsidies into deployment as quickly as possible.

More thoughts to come on how we can pull off this fast-track partial loan guarantee program properly next week.

Who Cares Where We're Ranked Internationally? Not Me!

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Guess what? Turns out we're not 13th or 15th or 19th in the global broadband rankings, we're #1! Or at least so says the "Connectivity Scorecard".

But much like the OECD rankings, I find this all to be a bunch of hooey.

First off, you can tweak the rankings to produce just about any result depending on what data points you choose to include in your calculations. That's not to say the data that anyone's using is false, just that the analysis is getting in the way of the truth, which is simply that the US is lagging behind leading countries like South Korea when it comes to deploying next-generation broadband, but that we still have a lead on the rest of the world when it comes to the widespread utilization of broadband and related technologies.

To be honest, though, I find this whole exercise of trying to rank the US vs. other countries as irrelevant to the decisions facing our policymakers.

While of course there are lessons that can be learned from observing how we stack up relative to other countries, in my mind if we want to lead than we must pick our own path and not just try to follow others.

This isn't about catching up, this is about deciding what we want our digital future to be and then aggressively pursuing programs that can lead us to that end.

And for me, those goals are simple: we want to be the best we can be. We want as much bandwidth as possible; we want everyone online and educated on how to use networked technologies; and we want all facets of our society utilizing broadband to its fullest degree.

We want to enable the most robust digital economy, where all our content creators and creative class are empowered, where our service-based businesses are realizing new efficiencies and opening up new opportunities through the use of broadband, where what seemed like science fiction becomes a commonplace reality in how we communicate with others and access information.

While we can learn from other countries we need to be following our own path and setting our own standards because if we're saying that we want to be more like Japan or South Korea then we're always be behind as they're already far ahead of us.

That's why I wish we could just stop talking about how we compare to other nations and start exploring how far we've come relative to where we want to be.

And where I want us to be is simple:

- Fiber everywhere, DOCSIS 3.0 cable everywhere, and competitive wireless networks everywhere

- 100% of homes online and using broadband

- All users taking full advantage of all that broadband has to offer

- And rampant innovation occurring daily in developing new ways broadband can improve our lives

So while we should try to learn from the successes and failures of others, let us no longer attempt to gauge our success against other nations but instead compare where we are to where we want to be. Let's not settle for trying to be like other nations but instead set out ambitious goals for where we can be and then do everything we can to get us there.

We're Americans, damn it, and I can not accept that the best we can hope for is decades of playing catch up trying to follow the lead of more progressive nations.

It's high time we grab the reins and determine our own broadband destiny as I'm still a firm believer that there's more potential for greatness in this country than any other on Earth. The future of our country depends on us establishing our own broadband identity and not just following in the footsteps of others.

So let's stop fretting over how low we're ranked or how biased more friendly rankings are, and let's start determining our own future, striving to be the best that we can be.

Here's a basic principle any broadband stimulus dollars should adhere to when deciding what deployments to subsidize: don't stick rural areas with yesterday's broadband.

I'm starting to hear a lot of chatter about stimulus dollars going to plain old vanilla DSL and (gasp!) BPL deployment. That's the absolute worst use of money I could possibly think of.

First off, let's burst the BPL balloon. It's been tried but failed repeatedly; it's only promising 1Mbps with no great hope of increasing that over time; and despite these limitations it's still not cheap at $50 a month for 1Mbps of service. The only place BPL may play a role in the future is in enabling smart electrical networks for smart appliances. We can't afford to waste any more of our money subsidizing this technological deadend. And I'm not alone in this sentiment. Check out: DSLReports, TechDirt, and it's perhaps best put by GigaOm: "BPL is no step forward for the rural customers who need broadband access."

Secondly, it's a mistake to subsidize plain old vanilla DSL. If all we want to get rural America is a few Mbps then we should focus our attention on wireless, which can not only deliver those speeds but do so ubiquitously, providing access anywhere whether you're in a building or out and about.

But we also need to be doing whatever we can to get next-generation wireline access built out to all of rural America. While wireless serves as an essential extension cord, we need a robust wireline infrastructure on which to build the next generation of our economy. We need networks capable of at least 100Mbps and preferably we want competition, either between services on the same open fiber network or between fiber and DOCSIS 3.0 cable, which are the only two technologies that can deliver those speeds. DSL may some day be able to support what's needed, but for now it doesn't so we should be focusing our attention on what can work today.

The worst thing we could be doing right now is trying to be technology neutral. We must acknowledge the limitations of some technologies and direct our financial support to those that can truly deliver what's needed--the connectivity of tomorrow not yesterday--and that means ubiquitous wireless and next-generation wireline, not plain old vanilla DSL or (gasp!) BPL.

This is an open letter to all current and future members of the US Broadband Coalition.

Last week I shared how the lack of a national broadband strategy cost our industry billions of dollars in the economic stimulus package.

This week I want to throw down the gauntlet at the feet of not only the US Broadband Coalition but also all the state-level coalitions that are trying to bring together broadband players around the same table.

First off, we must all recognize how far we've already come. Just getting everyone in the same room is an accomplishment. For too long we've been talking past each other, arguing through our legislators, and not engaging in enough direct dialogue. But today that first hurdle is already being overcome.

Secondly, now that we're talking we must recognize the importance of trying to understand the needs, desires, and motivations of the other side of the table. We can't afford to continue caricaturing those with differing views from our own as being bloodthirsty capitalists or idealistic socialists.

At the same time, thirdly we must acknowledge that in order to achieve consensus no one side is going to be able to get everything they want in exactly the way they want it. Instead what's needed is to have everyone involved in this effort examine what it is they really want. What's most important to you, not in terms of specific legislation but instead in terms of the results. So for deployers that could mean getting more capital available to support deployment, more incentives to reward upgrades, and insuring that any new network management rules put in place don't hinder their ability to run and monetize their networks. For public interest groups that could mean getting the most bandwidth and the most competition out of the broadband marketplace and insuring that the public interest is protected from monopolistic providers.

Notice how I didn't mention any specifics like grants or tax credits or net neutrality legislation. We need to take a step back and focus on goals first before getting into the specifics of how to accomplish them as there may be ways of getting where we want to go that we haven't thought of yet. We're not at a point where we can say that we know all the details of what we need to do. Instead we must first come to consensus on where we want to go, and then we can figure out how to get there.

Finally, we need to get everyone involved in this process, which is why I also addressed this letter to future members of the US Broadband Coalition. The bigger we can make our tent, the more voices we can add to our chorus, the stronger we will be and the better our chances of affecting truly transformative change in the way government supports broadband. Because of this I want to encourage all current members of the Coalition to look at the current list of signatories and if there's anyone missing you think should be involved go make sure they know about these efforts and ask them to join in.

Together I'm a believer that we can accomplish anything, from bringing ultra high-speed broadband to every corner of our great nation; to getting every last man, woman, and child online to using broadband to better their lives; to resolving even the most contentious of policy issues like net neutrality.

Together our industry can not just further our own goals but in doing so help further efforts to improve all facets of our society, whether it be modernizing our education system, greening our economy, growing our businesses, or improving our healthcare system.

Together we can create a comprehensive national broadband strategy that will position America to slingshot itself back into the leadership position in the drive towards the establishment of the 21st century digital economy.

We can no longer afford to allow ourselves to be fractured and warring. Now is the time to stand together shouting one message supported by a thousand voices: Broadband is good! Broadband is great! Through broadband our future is secure! Through broadband our future is bright! And through broadband anything is possible!

I look forward to working with all of you as co-chair of the Implementation Working Group of the US Broadband Coalition with the incomparable Diane Duffy. Together we can all enable a better tomorrow through broadband, empowering generations to come to continue living in the greatest country on Earth.

Implementing the Broadband Stimulus

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Following up on yesterday's post where I highlighted Blair Levin's comments about how the lack of a national broadband strategy prevented more money from the stimulus going to broadband, I wanted to share some of my impressions from the panel he shared with Jessica Rosenworcel, senior communications counsel for the Senate Commerce Committee.

First off, Blair reiterated statements he's previously made that this broadband stimulus is not the be-all-and-end-all of broadband policy; it's only an inning, not the whole game. He then set out his hopes for how these dollars will be spent, simply stating that he'd like to see the money spent quickly, tracked accurately (which is no small feat for government or for a program of this size), and that we learn something from this process that we can apply to future decisions.

I really appreciated his pragmatism in laying out these goals. It'd be nice to say that what we want is to totally resolve the plight of being unwired in rural America but that's not realistic. Instead what's needed now is a focus on spending this downpayment on our digital future wisely so that it's easier to justify additional money in the future.

Though at the same time he does expect this money to be transformative as he stated his belief that this one-time $7 billion could have a greater impact on rural America than the $7 billion+ we spend on USF year after year. In her remarks, Jessica also alluded to the momentum building behind USF reform, which suggests that we're going to take a real run at USF reform this year, and I couldn't be happier as that's a big pot of money that could be doing a lot of good supporting the deployment and adoption of broadband.

Two key thoughts from Jessica's remarks prove her understanding of the breadth of the broadband issue.

First in reviewing what's in the stimulus she made sure to stress the funds made available for generating demand for broadband, which she lamented the press hasn't picked up on enough. While it's disappointing the mainstream media hasn't done more to celebrate the inclusion of dollars for stimulating demand, it's extremely exciting to know that our policymakers understand the importance at addressing both sides of the broadband equation.

Secondly she listed off a series of other aspects of the stimulus bill that while they may not specifically say "broadband" could still be used to further the cause, in particular health IT, education, and smart energy. One of the biggest perception shifts that I've been arguing for is to not put broadband in a little box but instead consider how it can positively impact all aspects of society. So needless to say I was overjoyed when she mentioned these as it proves a new age is dawning where we think about broadband in more holistic ways.

Three other quick hit points worth mentioning:

- I asked the question of when they thought stimulus dollars would start flowing, especially given that if it takes 6 months all deployers in northern states will miss out on this year's build season, but unfortunately they couldn't give me a definite answer. Blair suggested that it'd be faster than we can expect, though I got the sense that had more to do with how slow government tends to be rather than how fast the money will actually be coming out.

- Related to a question on how these dollars might be used by carriers, Blair admitted that he expected these funds to be used more by smaller deployers, which makes perfect sense given the argument that we shouldn't expect the big guys to deploy to rural America when neither they nor Wall St want them to be there.

- One final nugget was a comment Blair made towards the end that the more leveraged the government dollars the better, in other words the more that federal money can join with state, local, and private capital the more attractive a project will be for government support. That makes all kinds of sense as we don't want to turn this into a government handout program but instead only want to be supporting those with real projects that can attract additional funding. Plus this suggests that those states that are most progressive and aggressive in supporting broadband deployment will get the most federal support. It also plays perfectly into the program I've been advocating for of fast-track partial loan guarantees, which leverage government guarantees to unleash the clogged up private capital markets.

All in all it was an inspirational session for me. With leaders like this writing broadband policy we're in really good hands. These are people who get it, who understand the need to have big goals but at the same time be pragmatic in our attempts to achieve them. So I couldn't be more excited for the opportunity to hopefully work with both of them moving forward. There's still a lot of work to be done but I'm now more positive than ever that we have what it takes to get the job done.

Just got back from watching the first session of a great event on implementing the broadband stimulus. You can check out the agenda here: http://www4.gsb.columbia.edu/citi/broadbandstimulus

I was forced to leave early so I can catch a plane to Minnesota to address the MN Ultra-High-Speed Broadband Taskforce tomorrow, but wanted to share a quick revelatory moment I observed from that panel.

On it Blair Levin, a member of President Obama's tech policy transition team, made a very interesting comment. He lamented that because we didn't have a national broadband policy in place the stimulus package couldn't include as much money for broadband as it may have otherwise.

What I inferred from that statement is that the administration and the Hill were ready to do more for broadband, but because our industry couldn't agree on what we wanted that all that could be included was money for things that wouldn't cause too much disagreement, like stimulating deployment in rural areas, so as to not bog down the progress of the overall stimulus bill.

So in other words if instead of everyone lobbying separately for their own piece of the pie we would've come together and established a common framework for a broadband stimulus package that benefits everyone we could've grown the size of the overall pie for the entire industry, likely by billions of dollars.

Needless to say, that's rather disappointing news to hear about a potentially once-in-a-lifetime opportunity like this stimulus bill.

At the same time I'm extremely encouraged by what this suggests is possible with our new administration if we as an industry are able to come together and find common ground. Blair's comment alludes to the fact that with a clear, coherent, comprehensive national broadband strategy in place and everyone supporting it, that our elected officials are ready, wiling, and able to pursue transformative action in spurring the deployment and use of broadband.

But we must take heed of this lesson: the more we bicker the less that's going to get done. On the flip side: the more we can find ways to agree on issues the more that's possible.

So let's continue coming together so we can make sure we don't miss an opportunity like this again.

Freedom 2 Connect: A Must-Attend Event March 30th in DC

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One of my favorite telecom-related events is Freedom 2 Connect. It dubs itself as "a meeting of people engaged with Internet connectivity and all that it enables" and that really only scratches the surface.

While a smaller affair attendance-wise, it has an amazing concentration of big brains across a wide spectrum of expertises, from network guys, to community leaders, to public interest groups, to creative professionals, to financial types, and everything in between. In fact I'd argue that its percentage of total attendees relative to quality attendees is second to none.

If you need any proof of the quality of people that attend, just check out the agenda.

It's jam-packed with people I can't wait to learn from and chat with.

Also worth noting is that this event is just plain fun. With this many smart, like-minded people in one place the receptions are a hoot. But even more interesting is how David Isenberg, the brain behind Freedom 2 Connect, goes out of his way to enable a different kind of conference experience.

For example, how many tech events do you know of that have a live band that plays between sessions?

David also innovates in his use of a projector to display a real-time chatroom of attendees who can converse about presentations as they're happening. And it wouldn't surprise me if he has some new surprises up his sleeve this year.

In fact, when I think about it, I realize that the only reason I can't yet say that this is my favorite tech conference of them all is that last year was the first time I had the opportunity to attend. But needless to say, I'm confident that after this year's event I'll not only be a Freedom 2 Connect veteran, but also that this conference will take its rightful place at the top of my list for must-attend events for anyone interested in and committed to the broadband revolution.

I look forward to seeing lots of you there!

Included in the stimulus bill is $350 million for mapping the availability and tracking the adoption of broadband. That's a huge sum of money with which we can do great things, so how should we spend all those dollars so as to maximize their impact on the state of broadband in the US?

First we should gather as much data as possible.

Next that data should be as granular as possible.

Finally everything should be as transparent as possible.

Now let's dive a bit deeper into the details starting with mapping the availability of broadband.

The most basic level of broadband mapping is where it is and isn't. The next level is what speeds are available where beyond basic broadband. Tied into that is how many providers offer service in any given area. Then how much does that service cost relative to the speeds you're receiving. And finally, what's the quality/reliability of that service.

Next we need more granularity with the data that's collected, in particular getting as close to address-level data as possible. Just because one property in a zip code or census block has broadband that does not mean that all do, especially in rural areas where a town may have multiple providers but the outlying homes have none. If we don't get more granular data we won't be able to accurately identify which areas are unserved.

Another aspect to this issue is the possibility of separating wireline from wireless mapping given that each has different characteristics. For example, wireline should be available at buildings whereas wireless should be available everywhere. Plus the quality/reliability of wireless can vary much more dramatically than wireline due to things like whether the trees have leaves and the state of the weather. Because of this more work will be required to create an accurate map of wireless broadband.

Finally, the more transparent this data is the better the decisions policymakers can make regarding where to direct funding and consumers can make about what service to buy and what communities to relocate to if having high-speed connectivity is important to them.

Now on to the other side of the coin: tracking the demand for broadband.

Again we want as much data as possible. In particular we need a baseline for how people, businesses, and institutions are using broadband today so we can track how their usage is growing tomorrow. Also valuable would be a sense for how much market demand any given community has for broadband as this is data that can be used to justify the buildout of new networks to supply bandwidth to that demand.

And the more granular this data is the more effective it can be. We don't need more projections and guesstimates, we need hard data that reflects actual usage and demand. Plus by being able to target specific kinds of data we can get a more accurate sense for how successful various programs for spurring demand for broadband are.

Finally, the benefits of making this data transparent are huge. Imagine business owners being able to see how their use of broadband-enabled technologies compares to their competitors down the road in terms of cost savings and new growth that are realized. Or envision having accurate data about market demand available to anyone ready, willing, and able to start deploying new next-generation broadband networks. This is the kind of hard, transparent, granular data that can really get our country moving forward in a big way.

While collecting all this data about broadband availability and demand will take time, with the amount of funding set aside for this endeavor money shouldn't be an issue. In fact we should be able to collect all of this data multiple times over the next few years, which brings up another key point, that we can't have this mapping/tracking just be a one off. We need to think about what we're doing today as a baseline that future data can and will be added to.

So as you can see, there's a whole lot we can do with $350 million to track the availability and adoption of broadband. This is a transformative moment in the history of broadband in our country, so let's all work together to figure out how best to spend this money to collect the most data in the most granular and transparent way possible.

If you have any suggestions for additional data points we should be looking to collect or additional uses for the data I've listed above, speak up and add a comment below!

The more brainpower we can get behind issues like this the better the end result can be.

Hey Canada: ISPs Can't Pay For Everything!

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I continue to be fascinated by the happenings with ISPs up north of our border.

Previously it's been issues surrounding bandwidth caps and net neutrality. Now it's the trend of Canadian content creators trying to get ISPs to pay them.

The Canadian Writer's Guild "believes that ISPs should be paying any creator who creates content for the web."

First off, as the DSLReports post I linked to above points out, ISPs have been pushing for content creators to put up their fair share of the cost of upgrading broadband networks. ISPs believe that there's a lot of revenue-generation going on over their networks for which they're not getting a cut and they don't think that's fair. So it's amusing to hear content creators singing the opposite tune.

Secondly, if ISPs aren't making money directly off of most of the content that's flowing over their networks, then why/how are they supposed to pay content creators? It seems like the content creators are saying, "Well, we don't know how to make money online, but someone should be paying, and since the ISPs are the only ones making any money we should charge them." Note that the money I refer to ISPs making comes primarily from access charges, which is typically not directly tied to content.

Thirdly, this push is a really weird add-on to the existing trend that's gaining momentum in some countries to charge ISPs for the fact that their networks enable piracy. What makes this weird is that they seem to be saying ISPs should pay even if piracy didn't exist, despite the fact that because of ISPs content creators have more opportunities to monetize their content than ever.

While there are many reasons why I think this is a silly idea to try and force ISPs to pay all content creators--especially when you start getting into the details of figuring out how much various content creators should be paid as that opens a huge can of worms--there is an element of truth to all this, namely that I believe ISPs are positioned to be the focal point for aggregating ecommerce and digital media distribution.

By this I mean that since ISPs already have the customer billing and marketing relationship, they're perfectly positioned to concentrate the diffuseness of the Internet into something more easily accessible by all users, not just those that know how to find what they're looking for, have a working knowledge of all the resources available online, and/or are comfortable purchasing things online.

What if instead of having a million different music websites all trying to build consumer awareness separately and each trying to charge users individually this all ran through the ISP. The ISP would host an aggregated list of music offerings, consumers would pick and choose whichever they wanted, and then ISPs would split the revenue from subscriptions fees or advertising with the music site and music makers.

Of course, there are a million pitfalls in this model, like the need for ISPs not to get greedy by favoring their sites over others, the need to determine fair value for music between multiple music sites and musicians, and the need for this to be a seamless, easy-to-use process and interface for consumers, which ISPs aren't always the best at developing.

But these are all issues that the market should be driving rather than the government regulating. To think that the Canadian government would seriously consider any regime that would impose fees on ISPs to be paid to content creators seems silly at this point in time. I just can't see how government could get involved without mucking things up and getting in the way of innovation.

Plus one of the most important fundamentals of broadband we need to realize is that if you add fees onto ISPs, they'll just pass those costs along to their customers. So by supporting content creators you'll be raising prices on consumers without necessarily delivering them any additional value. And that seems like a recipe for disaster.

All Eyes On NTIA, RUS, and FCC: Who Will Lead US?

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So there's been all this talk about what should or shouldn't be in the stimulus package as it relates to broadband, but there are a few big pieces of this puzzle that are glaringly missing: who gets to spend these millions and billions of dollars?

I've learned in my crash course on DC policy-making that while the language of the law is important, perhaps even more significant is who makes the decisions of how to actually spend that money.

This seems especially true today as when push comes to shove there really aren't that many specifics as to how that $7 billion should be spent on broadband in the stimulus bill. Instead those decisions will come at the discretion of whoever's put in charge of the relevant agencies.

But to date we don't know who any of these people will be yet. Of the three agencies charged with making these broadband dreams a reality--the FCC, NTIA, and RUS--none of them have had their leaders officially installed yet. And in fact for the NTIA and RUS, which have been given the most money, we don't even have any good rumors to go on yet. At the FCC Julius Genachowski has been all but confirmed as the new chairman, but even there we still have three seats not yet defined.

I'll have to admit, this is somewhat troubling to me. How can we expect whoever does come into power to be able to make decisions quickly on how to spend all this money when they're still learning where the bathrooms are?

That's why I'm hoping that if able our leaders will put people in place who can hit the ground running. They need to have a working understanding of how their agencies operate so they're not having to learn everything on-the-fly. We need administrators who can start making the big decisions and taking the bold actions that our country needs right away, as otherwise these broadband stimulus dollars could lead to bridges to nowhere.

That's the thing we must all realize: the good intentions of legislation don't matter if those charged with implementing the law aren't up to the task.

Now I'm not saying that good candidates must have experience specifically related to running these various agencies, but what we and they must realize is how much responsibility has now been heaped on their shoulders.

Not only do they have to step into agencies that all need some level of reform, they must also be ready to start spending this money both quickly but also responsibly, efficiently, and effectively.

Because whether or not this broadband stimulus actually stimulates broadband is now the responsibility of the people who will be heading up these organizations.

So needless to say, all eyes will be on who gets these positions and what they do once in power. The next few months should be interesting as this all shakes out. Let's hope that in the end we get people in place who can be partners and enablers rather than continuing the unfortunate tradition of government getting in the way and wasting money rather than actually helping drive the country forward.

Wow - Check out this math:

So I've been proposing we put $1 billion of budget authority towards the establishment of a fast-track partial loan guarantee program for deploying next-generation broadband to rural America.

As I've suggested earlier, that $1 billion budget would allow us to distribute $25 billion in partial guarantees, which would enable $50 billion of private capital to be invested in the deployment of next-generation broadband networks.

But it just dawned on me we can take this a step further.

The government seems to have come to agree with the research of my friend Michael Curri, the world's leading broadband economist, that says that for every dollar invested in broadband the economy realizes a tenfold return.

So if we can enable $50 billion in investment, that means the economy will see a boost of $500 billion.

And that number could be higher as that 10x multiplier refers to broadband in general not next-generation broadband specifically. With more capacity businesses, individuals, and institutions can do more things more quickly and more efficiently, so that 10x could be much higher for next-generation broadband.

Also Communications Workers of America has suggested an even higher multiplier for generic broadband of 20x. So $50 billion in broadband investment could create $1 trillion in economic growth.

Taking this one step further, if we were to create a $5 billion fast-track partial loan guarantee program for which all communities were eligible we could distribute $125 billion in partial guarantees enabling $250 billion in investment, enough to wire the whole country with at least one next-generation broadband network.

We're now talking about $2.5-5 trillion of economic growth.

Back to my opening statement - WOW!

And these multipliers are only taking into consideration the way we use broadband today. Assuming that our ability to utilize broadband to drive efficiencies and create opportunities will only increase over time, it suggests that this multiplier effect will also increase over time.

So for $5 billion of government dollars, we'd open up the potential of realizing $5 trillion+ of economic growth.

Talk about a good investment!

What Is Broadband? In 100 Words Or Less...

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As part of an effort to demystify broadband-related issues, I'm starting a series of 100-word explanations of what broadband is, how it works, and other related topics.

To start with: What is broadband?

The Internet is a series of interconnected fiber networks.

Broadband is the service that provides access to the Internet at speeds faster than dialup.

It can be delivered by copper, wireless, or fiber technologies.

Copper networks are DSL, cable, or BPL, all of which have clear limitations in capacity and reliability.

Wireless networks include 3G/4G, WiFi/WiMax, and satellite. While key to enabling universal availability, they are also limited in capacity and reliability.

Fiber networks offer unlimited capacity and unmatched reliability.

The future of the Internet demands broadband that's capacious, reliable, and available everywhere.

I continue to be amazed at how much the topic of mapping supply dominates the broadband discussion.

Is it important we know where there's broadband and where there isn't? Absolutely.

Can a supply-side-only approach spur deployment? Possibly.

But how are we supposed to solve the broadband problem if we're only looking at half of the equation?

The missing piece is demand.

More than knowing where supply is or isn't, if we knew where there's unmet demand that's what's most relevant to suppliers looking to expand and grow their businesses.

Plus if we can push broadband penetration rates up from 50-75% not only will it allow incumbents to grow it'll also provide room for new entrants to establish themselves. It won't just be about fighting for a bigger slice of the pie as the entire pie will be bigger.

Because of this another advantage of focusing on demand-side policies is that they're something everyone can agree on. Finding consensus on the supply side is almost impossible regarding a host of matters, like how much speed and competition we need. But no one will argue against trying to get more people online.

And it's not just about getting more people online, it's also about getting everyone to use networked technologies to a greater degree to drive new efficiencies and open up new opportunities in their day-to-day lives. In this way we can improve the way society works.

Yet despite these many advantages of focusing on the demand-side of the broadband equation, we still haven't committed a significant portion of our discussions on broadband policy to exploring how we can increase demand.

The most I've seen is suggestions of getting more computers and greater government support to pay for broadband service to those who can't afford it, with a smattering of talk about computer literacy and training programs. While these are all valuable components, there's little in the way of a larger, more comprehensive vision.

This vision for how policy and innovation can drive an increase in demand for broadband is at the core of what I'll be working on over the coming months at multiple levels, from identifying best practices in communities and organizations that have succeeded in this area, to implementing a comprehensive model to showcase what's possible in communities like Lafayette, LA, to formulating policies that can support these and other efforts.

2009 will be the year that we finally wake up to the fact that by focusing on spurring demand we can not only unify around an issue we all agree on but also create the demand that's required to truly spur the deployment of more supply.

So the Senate just cut $2 billion for rural broadband from the stimulus over the weekend, reducing from nine to seven.

In the long run this loss matters little given that the number was coming down eventually anyway since even if the Senate version passes it will still have to be resolved with the lower amount set aside in the House.

But let's stop thinking about this issue politically and start considering what this decision means in real-world terms.

The impact of losing $2 billion worth of grants for general/generic broadband deployment from a nationwide perspective is limited. That much money doesn't go very far especially when spread across all 50 states.

But if we put that same budget towards partial loan guarantees we could empower tens of billions of private capital to flow into rural next-generation broadband.

Tens of billions of dollars means millions of rural homes getting connected.

And there are projects ready to start deploying within weeks all across America creating thousands of jobs if we could get this support through the gears of government quickly.

I completely understand that compared to the scale of the stimulus $2 billion isn't a big deal and that in order to get the overall package passed we have to make some sacrifices.

But we must also critically consider the missed opportunities these cuts represent, especially in cases like how to stimulate the deployment of rural next-generation broadband.

We can't just be thinking about how to reduce government spending; we need to find new mechanisms to spend those dollars in smart ways.

Because the way things stand now we're on the verge of taking away the opportunity to get connected with next-generation broadband from millions of rural homes, and I can't see how that's either good policy or smart politically.

We Can't Afford To Short Change Rural America

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To anyone in Congress trying to cut funding for rural broadband, ask yourself this: do you care about the future economic viability of the rural communities you represent?

If so, how can you justify taking away money from the only infrastructure that gives these rural communities a fighting chance to not just survive but thrive in the 21st century?

It's like saying, "Rural America doesn't deserve to be a player on the world's stage, their businesses don't need any help competing in the global economy, their children are just fine being disconnected and unable to access the resources of their peers, their elderly and sick can get by without top-flight medical care" and so on.

Of course other reasons are given for why this funding should be cut, but none are so onerous that we should be considering backing off throwing our full support behind solving the rural broadband problem.

First off, there are a ton of shovel-ready projects that can start deploying as soon as capital's made available, and many more will become ready now that they know the federal government's ready to help out.

Secondly, the only thing getting in the way of our ability to spend all that $9 billion on deployment in two years is the pace at which government's able to distribute those funds.

I can't help but feel that anyone trying to cut funding from rural broadband is basically saying, "Well, this looks like it's going to be hard, and there's no guarantee it's going to succeed, so let's hedge our bets and back off from pushing all in."

Yet even at $9 billion we're a long ways away from throwing the full support of the US government behind rural broadband. It's less than a fifth of what we'll need to wire all of rural America with next-generation broadband, and it represents only 1% of the total stimulus package.

Don't get me wrong: I think this money's a great first step. But to cut any of this funding now feels like taking two steps forward and one step back at a time when we need to be running.

If we need to trim funding from stimulus, fine, but let's not step back from our support for rural America and short-change their future. They can't afford to wait around as we continue to hesitate. Even if we have to err on the side of doing too much that's better than not doing enough.

Why Hide Competitive Data When We Want Competition?

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Last night I had an epiphany about broadband mapping.

The challenge has long been that broadband providers refuse to make the data in their service maps transparent to the public. Their stated reason for this refusal is that this data is competitive intelligence.

But wait a minute: isn't the whole point of mapping broadband availability to spur deployment and competition?

Don't get me wrong, if I was an incumbent provider, there's no way I'd willingly give up my data. There's little upside to doing so unless I'm ready to start going hard after my competitors and they're forced to show their cards as well.

But from a policymaker's point of view, how is it we've come to accept that private providers making this data public is a bad thing when doing so would almost certainly lead to more competition?

The precise reason private providers don't want to give up this data is why they should have to.

And if we still can't get them to belly up to the bar then we need to go about gathering our own data and making it completely transparent as doing so will have a huge impact on broadband competition without us having to lay a single new pipe.

The Best Billion We Can Spend On Rural Broadband

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First off let me get out of the way upfront my belief that there's a lot of good related to broadband in both the House and Senate versions of the stimulus package. Without grants and loans some areas of the country may never get broadband of any sort, and prioritizing rural areas makes sense on all levels.

But are we stimulating rural broadband deployment to the best of our ability by focusing solely on a big-government, top-down approach to federal and state officials picking winners and losers by writing big checks?

Could there be some way to enhance what's already there with a small-government, market-driven strategy that rewards progressive projects, gets money flowing quickly, and maximizes the impact of government dollars?

Yes there is! Introducing the Best Billion Dollars We Could Spend On Rural Broadband!

The following is an outline of the details and benefits of committing $1 billion of budget authority in the economic stimulus package to the distribution of fast-track partial loan guarantees for next-generation broadband in rural areas.

Here's how it would work:

$1 billion in budget authority for fast-track partial loan guarantees for next-generation broadband.

$1 billion in budget authority would allow $25 billion in guarantees to be distributed thereby enabling $50 billion in total investment to be realized.

These guarantees cover 100% of the losses up to 40-60% of the total value of the loan.

The size of the guarantees will be based on a sliding scale relative to the overall density of a project. Projects under 10 premises per linear mile of inhabited road could get 60%; projects over 25 premises could get 40%; and in between is the sliding scale.

The fast-track approval process would require applicants to have market-ready projects but would approve projects based on a simple checklist that insures they have what they need to take their plans to the private capital markets. Once given a guarantee, applicants would have 120 days to secure financing before the guarantees expire. In this way we rely on the capital markets to vet which projects are financially viable and deserve funding.

Any project supported by these guarantees must provide universal, open, and next-generation broadband access.

These guaranteed loans can be used to fund all aspects of network deployment and operation. And while the emphasis is on wireline broadband, up to 20% of these loans can go to deploying complementary next-generation wireless access.

All communities under 50,000 without a next-generation wireline broadband provider are eligible.

All owner/operator models are eligible.

All forms of capital can be guaranteed.


Market-ready - Projects must have the following in place:
* A fully fleshed out business plan
* A viable financing plan in place
* A proven management team ready to start
* Regulatory requirements figured out
* A completed corporate structure
* Identified local stakeholders

Universal Access - Projects must build out to everyone in an exchange that wants service.

Open Access - Projects must pledge to sell bandwidth to anyone, be transparent in any network management practices, and not interfere with legitimate Internet traffic.

Next-Generation Broadband - Next-generation wireline broadband is defined as networks capable of offering at least 100Mbps symmetrical and delivering at least 25Mbps symmetrical simultaneously of in-network capacity. Next-generation wireless starts at no less than 5Mbps symmetrical.


These fast-track partial loan guarantees complement the existing funds set aside for rural broadband in the following ways:

They deliver more bang for the buck - $1 billion in budget authority can enable $50 billion in private investment, enough to wire almost all of rural America with next-generation broadband without government having to write a big check for the whole thing.

They will get networks deploying more quickly - There are billions in shovel-ready projects that need only access to capital to start to deploying. So rather than wait 6 months or longer for grants to be processed, these fast-track guarantees can allow deployers to start moving and creating jobs within weeks, which is especially important in northern states where if nothing happens until the fall we'll have lost another year to make progress as the ground freezes. We need them deploying by April if we want to make a difference there.

They rely on a market-driven approach - Instead of only employing a top-down approach of government picking winners and losers, these guarantees allow government to empower a market-driven, community-centric approach where the projects that are supported are those most financially viable and progressive in their development, not just those that are the most politically well-connected.

They support truly next-generation broadband - If all we get rural communities is the broadband of today, then that's all they'll be left with as the rest of the world benefits from the broadband of tomorrow. We need to set high goals and support those entities that can reach them if we are to insure the continued economic viability of rural America in the 21st century.

Next-generation broadband deployment creates the most jobs - In particular full fiber networks creates 33% more jobs to deploy than any other form of broadband. And having next-generation broadband will equip rural communities with the connectivity they need to attract and retain businesses in the global economy.


I'm headed up to the Hill again today in search of champions in the Senate willing to prove their commitment to the future viability of rural America by adding this billion dollars in budget authority for fast-track partial loan guarantees to the stimulus package.

If you support this initiative and/or want to help out in some way to make it a reality, submit a comment below and I'll contact you directly to discuss further.

Never before and perhaps never again will we have this opportunity. Let's make sure we make the most of it by creating the best possible rural broadband stimulus!

Dear NYT: Rural America's Ready to be Wired Now!

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Today there's a front-page article on NYTimes.com entitled: "Internet Money in Fiscal Plan: Wise or Waste?"

While it attempts to present a balanced approach to the positive and negative reactions to the money put in the stimulus package for rural broadband, on some of the most crucial issues it's factually wrong.

Take this quote: "And yet, supporters cannot simply wave away the potential pitfalls, including the fact that it will take at least until 2015 to spend all the money on infrastructure to deliver the service -- vastly limiting the stimulating punch."

The only reasons why it would take that long to spend $9 billion on rural broadband is if government's slow in distributing grants or if the industry around next-generation broadband deployment can manufacture enough wire and electronics to keep up with demand.

Sure for communities that don't have progressive incumbents or plans of their own it will take some time before they're ready to do any deploying, but there are also billions in projects that are ready to start turning dirt and creating jobs as soon as capital is available. And even those starting from scratch could be ready to start deploying by the end of the year.

Here's another one: "Meeting minimum speed requirements set forth in the House version could force overly costly investments by essentially providing Cadillac service where an economy car would be just as useful. And some worry that government may pay for technology that will be obsolete even before the work is completed."

Next-generation broadband is not a luxury item in the digital economy. It's not Cadillacs vs. economy cars; it's cars vs. horses.

And if we're worried about next-generation broadband becoming obsolete then we need to be investing in fiber, which won't be obsolete for 100 years. We can't sit around saying, "Well horses are good enough for now, and we shouldn't invest in cars because before you know it there may be flying cars, so let's wait around until they show up."

Though there's a good point made in here: "Other critics say the effort will provide neither a true nationwide information superhighway, which some advocacy groups say will cost up to $100 billion, nor a good short-term lift to the economy, because there are so many requirements to be met in applying for federal broadband grants.

The broadband effort also runs another risk inherent to government stimulus spending, by reducing private investment."

First off, it's going to cost more like $250 billion to lay fiber to every last shack in America.

But let's unpack the second point a bit.

To start, government support of rural broadband can provide a tremendous short-term lift to the economy so long as government enables shovel-ready projects to start moving quickly.

But this article is spot on in pointing out that the distribution of grants is bogged down by the many requirements that need to be met by applicants. Also it's absolutely right to suggest that one thing missing from the broadband stimulus so far is the utilization of private investment. A pragmatic broadband policy shouldn't rely solely on a top-down government-driven approach of writing checks for everything.

That's why we've been advocating for the establishment of a fast-track partial loan guarantee program that can work quickly to unclog the capital markets and leverage government dollars to realize a 50x return in private investment.

Despite the negative tone at the beginning of this article that arguably attempts to cast disparaging light on doing anything to stimulate broadband deployment in rural areas, reading the comments of policymakers like Senator Ben Nelson leaves me optimistic that our elected representatives recognize that something must be done and that inaction is not an option.

Wow: Koreans to Have 1Gbps by 2012

And this isn't just a vague promise. They've got a specific plan to generate roughly $25 billion in total investment by investing $1 billion in government dollars. I don't yet know how they're incentivizing that investment, but I'm going to try and find out.

But let's compare this to the most ambitious of American plans: 100Mbps by 2015.

So it's going to take us three more years to get one-tenth the bandwidth, and they've already got a specific plan for how to get there while we have none.

The most important thing to take away from this, though, is the understanding that whatever broadband infrastructure we put in place has to be future-proof in its ability to operate reliably and expand easily and indefinitely in its capacity so we can ultimately be ready for a gigabit world of not just Mbps but Gbps.

Also, note what's possible when a federal government sets clear goals and pursues purposeful policies in terms of pushing the ball forward. Of course there are vast differences in the geography and marketplace in South Korea and the US. But the underlying truth still stands that they're leaving us in their dust because they have more vision, energy, and unity than we do.

Plus we need to understand that since we are much bigger than a South Korea or Japan that even if we had a big plan in place it's going to take two or three times as long to wire our whole country. And we don't even have agreed upon goals let alone a plan on how to accomplish them!

And remember: the full benefits of better broadband aren't realized until a few years after the networks are built. So by the time we get ourselves wired, South Korea's going to have already had at least 5 years and possibly much longer to integrate connectivity more fully into the fabric of their society.

What this all points to is that by committing itself to a 1Gbps Nation, South Korea has thrown down the bandwidth gauntlet and shown us that we can't afford to waste any more time, that even our most aggressive goals don't aspire high enough, and that the time to get next-generation broadband deployed is now, by whatever means necessary.

A few weeks ago I attended a New America Foundation event focused on the broadband portion of the economic stimulus bill. While many interesting things were said there was one point in particular that's stuck with me.

It came from Wally Bowen, executive director at the Mountain Area Information Network, which delivers connectivity to rural North Carolina.

During his presentation he said simply (though I paraphrase here), "Why are we trying to figure out how to get the carriers to deploy next-generation broadband to rural America when Wall St. doesn't want them there?"

I'd never heard this sentiment expressed in this way but it makes perfect sense. Wall St. still doesn't think upgrading broadband networks anywhere makes much financial sense (look how they reacted to Verizon's decision to deploy FiOS), and if carriers are going to invest in capacity anywhere then it certainly shouldn't be in rural America. In their eyes those dollars are better spent in metro areas even if there's greater competition simply because there's a higher density of people. And for better or worse, big corporations must listen to the desires of their shareholders.

Yet, the vast majority of the discussion about how to wire rural America seems to revolve around how do you get the big guys to extend their networks into areas they don't want to be. Not surprisingly we're finding that to accomplish this requires a heavy lift, something on the order of government paying for the networks entirely and giving them to private enterprise, or government giving tax credits that may reward even those who aren't deploying their best networks to rural America.

If we only look at this rural broadband problem through the eyes of the incumbents then it does look like a huge challenge that's going to require an equally huge government investment.

But if we take a step back for a moment and consider the broader array of deployers who have already been wiring rural America we'll see that there could be a better way.

Take for example the members of my Rural Fiber Fund Working Group. We've got $3-4 billion in shovel-ready projects to bring full fiber networks to rural America. And while none of these deployers would turn down the opportunity to get government loans or grants (which in particular can be helpful bringing fiber to every last shack), all they need to deploy far and wide is for the credit markets to unfreeze so they can access the capital they need to spread out their networks.

In fact at the beginning of this process I had some specifically tell me they didn't want or need government handouts. They just require a little help leveraging government dollars to get capital flowing again, like in the form of fast-track partial loan guarantees we've been advocating for these past few weeks.

So let's review:

On the one hand we have big carriers with shareholders that don't want them wasting money in rural areas and will require massive government handouts to spur deployment.

On the other we have a tapestry of non-traditional deployers many of which have already been bringing next-generation broadband to rural America that only need a relatively small amount of government help to continue doing what they're doing.

In no way am I saying that we shouldn't be trying to get the carriers to deploy far and wide in rural America. Instead my point is that if they don't want to go there, perhaps it's time we start seeing if there are any other options available to us, which I can confirm that there are.

We can't allow ourselves to assume that the only entities capable of solving the rural broadband problem are those that can afford to hire full-time DC lobbying teams. If we want to find a real solution we need to consider all of our options, and recognize that we're better off supporting those that do want to be investing in rural America than trying to convince those that don't to fundamentally alter their perception of the financial viability of offering service in rural America.

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