US National Broadband Plan: good in theory...
The FCC has published its National Broadband Plan - you can get it here from the horse's mouth. We haven't finished reading the 376 closely printed pages of exhaustive detail quite yet (we're on page 62), but we do have some initial thoughts about the plan based on what we already knew, what's in the recommendations, and what we've read so far.
In brief, it looks good in theory, but the proof of the pudding will be what the complex US market structure turns it into in practice. In addition, in terms of global impact, we see the National Broadband Plan as another piece of evidence for the Telco 2.0 concept that telecoms is increasingly too important to be left to the telcos. The growing influence of Governments and Regulators on broadband is a major theme in the broaband business models strategy report we're about to publish, and will be examined in detail at the 9th Telco 2.0 Executive Brainstorm in London, 28th-29th April 2010.
Ducts, poles, and trenches
The Plan is strong on the holes-in-the-ground aspect of telecoms. It clearly recognises that open access to infrastructure is vital for the upgrade to fibre. Further, it should perhaps be considered a law that open access is appropriate at the level which is most expensive to replace - nobody thinks operators should provide open access to their core routers - and the plan is clear that the important bit is making it possible for new fibre to be attached to existing poles or blown through existing ducts at sensible rates. The FCC intends to review the regulatory settlement in so far as it applies to attachment (American for duct access), special access, the US equivalent of wholesale line rental, and national roaming in mobile.
Specifically, the original text states:
Recommendation 4.7: The FCC should comprehensively review its wholesale competition regulations to develop a coherent and effective framework and take expedited action based on that framework to ensure widespread availability of inputs for broadband services provided to small businesses, mobile providers and enterprise customers...and Recommendation 4.8: The FCC should ensure that special access rates, terms and conditions are just and reasonable.
Get the facts
Another significant element of the plan is data collection and public information. The FCC has initiated the procedure necessary to issue a new regulation forcing telcos/ISPs to provide a wider range of data, and crucially to provide data about actual performance rather than their advertised "up to..." speeds. NIST is mandated to prepare a common technical standard for broadband instrumentation and definitions. It also seems they're going to require more disclosure of who owns what infrastructure, where, which is a crucial pre-requisite for open access. All the FCC's data returns will be collated and published on the Web through a new Broadband Data Repository.
This is an important political step - in the run-up to the Plan, data has been a difficult subject, with projects like California's Broadband Map running into heavy opposition from the incumbent operators. After all, disclosure sheds light on how badly served some places are, leads to requests for attachment and special access from competitors, and also permits unwelcome comparisons of current service with the promises made by the RBOCs to state governments in the 1990s. This is a bitter political issue in many places - for example, Verizon committed to provide 45Mbit/s service to the bulk of New Jersey in exchange for generous tax breaks and regulatory reliefs, which didn't happen. Sara Wedeman's awful experience with this is instructive.
Incremental muni-fibre strikes again
As well as the headline goal of 100 million households with 50Mbits uplink and 100Mbits downlink in the next 10 years, Goal 4 is interesting. Goal 4 aims to get 1Gbps or higher connectivity to all "anchor institutions" - that is to say, schools, colleges, medical facilities, libraries, community centres, town halls and the like. This is important in a number of ways - not only does it obviously contribute to the public sector's own IT goals, but it's a measure against the digital divide, and it provides an opportunity for quick hits, as much of the land and rights-of-way involved are already in the public hand and the public sector institutions involved can act as a launch customer.
Of course, as the Plan points out, laying Gigabit Ethernet to the local school is a significant step towards laying 100Mbits Ethernet to the pupils' homes. It's all quite reminiscent of this talk from a past Telco 2.0 event.
The Plan is surprisingly heavy on the wireless side of the industry, which is in part a recognition that there are a lot of rural and exurban road frontages in the United States and running access loop fibre down all of them is a fairly awe-inspiring project even with access to the existing poles. Of course, as population density drops, although the cost of laying lines goes up, the number of users per MHz of radio spectrum is falling - therefore, there's a significant zone of opportunity for a combination of selective fibre roll-out (to those anchor institutions, perhaps) and advanced wireless in the access layer.
In order to deliver this, the Plan foresees a truly epic release of radio spectrum - they plan to part with 500MHz of the stuff. There are two rather special proposals here - the plan foresees a sizeable (20MHz contiguous) allocation of spectrum exclusively for unlicensed, open slather usage. This will be the primary usage of the band - rather than permitting the licensed bands to overlap into it, and restricting the unlicensed operators' transmitter power, the FCC wants to cordon off the unlicensed zone entirely and therefore offer the unlicensed higher power settings. The other is for a national public-service wireless broadband network for the emergency services, and perhaps for other public service goals in so far as there is spectrum over and above the blue light services' needs.
Paying for it
In order to fund the plan, the FCC leans heavily on spectrum sales as a revenue source. Expect a major string of auctions. Beyond that, it intends to divert the money that currently goes from the Universal Service Fund to subsidise rural voice operators into broadband deployment through a new mechanism (the Connect America Fund). It is also going to review the High Cost element of the USF - intended to give the hardest-to-reach places more subsidy - and to look at how the USF's revenues are raised, which might imply a Digital Britain-style levy on the urban subscribers.
Some final thoughts
The National Broadband Plan is a credible document. It embodies many of the key principles we've identified about the future of broadband - the importance of access to the civil works infrastructure, the importance of wholesale, and the expanded role of the public sector. As usual in the US industry, however, the key element will be how these principles get implemented at run-time, as it were, when the complex and frequently dysfunctional relationship between the various different types of operator, the FCC, the 50 state Public Utilities Commissions, NTIA, and the Department of Agriculture's Rural Utilities Service actually cut the rules, decisions and precedents that make up the plan's influence on the ground.