Uncommon Wisdom

Jul 9 2010   11:40PM GMT

FCC modest broadband goal fits U.S. geography



Posted by: Tom Nolle
Tags:
Broadband
broadband plan
Congress
FCC

Even some democrats in Congress are yapping at the FCC over the modest broadband speed goals of the National Broadband Plan.

The plan calls for universal broadband service at 4 Mbps by 2020, and that’s certainly a modest goal, but the problem is that the comparison Congress makes with many other countries ignores the fact that the U.S. geography (large areas with thin populations in the suburbs and rural zones and concentrations of lower-income populations in the cities) doesn’t favor ROI on broadband deployment. Further, the measures that the FCC wants to take to assure net neutrality tend to erode carrier profits in good areas.

The big problem is that fixed wireline broadband is a duopoly (cable and telco), and neither is getting any Wall Street incentive to invest more. Verizon has apparently capped expansion of FiOS until it pushes its penetration up, for example. We think that TV success is the key to fast broadband, and we think that the franchise process is still too slow.

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