National Broadband Plan Said Commendable, But Not Perfect

The National Broadband Plan sets the stage for increased broadband adoption, but hasn’t quelled the debate over Universal Service Fund, spectrum use and Title II reclassification, telecom officials said on panels Tuesday. The spectrum portion of the plan “really does push the ball forward to try to get more flexible use for spectrum,” said Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research. Spectrum is the “mother’s milk” of wireless, said Verizon Executive Vice President Tom Tauke. The recommendations get the ball moving “in the development of additional spectrum resources for wireless. That’s a big positive for investment and innovation,” he said the event, held at the National Press Club.

The commission’s plan isn’t without flaws, some panelists said. Where it fell short was in the area of subsidies, like USF and intercarrier compensation, said Tauke: “They [FCC] simply did not address the reforms that are needed,” and the current system “does not work in a non-monopoly world.” The recommendations for USF reform won’t “reduce the universal subsidies that go out,” said Rosston. “All this money that goes to subsidizing rural telephone companies comes from people and it reduces adoption in urban areas because it makes it more expensive.”

While the Link-up and Lifeline programs are efficient, it doesn’t tell the whole story, and most of the USF subsidy is wasted, said Brookings Institution Senior Fellow Robert Crandall. “We're spending $4.2 billion a year today on the high-cost USF without any demonstrable effect on subscriber penetration or subscriber prices."

It’s as much about the process as the plan, said Omnibus Broadband Initiative Executive Director Blair Levin. The FCC in the next few weeks “will lay out a very detailed agenda for proceedings over the next several years,” including more than three dozen rulemakings that will come from the plan, he said. Levin also said that throughout the process, the commission’s eyes were opened to some key factors. We learned “very early in the process that the data the FCC was collecting was not sufficient for informed policymaking.” The commission also learned that aside from gathering data, “it’s about testing real-world solutions,” because “no business will invest in a project without adequate testing.” Throughout the process, the FCC found it wasn’t using traditional government levers to promote national broadband adoption, he said: “We realized we weren’t appropriately managing resources that are essential to broadband deployment,” like spectrum and rights of way.

There was some agreement that the plan leaves the debate on Title II reclassification up in the air. The investment community is “very concerned the FCC is leaving the door open on things like Title II regulation,” said AT&T Senior Executive Vice President James Cicconi. The notion of reclassification in a highly competitive market “strikes them as counterproductive,” he said. An end to the debate would have shown that the commission is “squarely on the side of private investment,” said NCTA President Kyle McSlarrow.

USTelecom CEO Walter McCormick said the plan is achievable, but it’s “best achievable if we build upon the regulatory and policy environment that has encouraged private investment.”