$350 billion to give broadband to remaining 5%? Nuts!

[ClassicalLib17]

Networks Barely Mention FCC Plan to Spend Up to $350 Billion for Broadband Internet
Media outlets either ignore story or support government plan to increase service to all, even though 95 percent of Americans already have access.

By Julia A. Seymour
Business & Media Institute
3/17/2010 1:32:25 PM



The problem with the liberal mindset is that it sees government solutions, even when there isn’t really a problem. Case in point: broadband internet.



Roughly 200 million Americans have broadband internet at home. Millions of others have access to it at work, school, the public library or on smart phones. Only about 5 percent of Americans lack broadband internet access according to The Wall Street Journal.



Yet in the eyes of bureaucrats at the Federal Communications Commission (FCC) this is an enormous problem to tackle with up to $350 billion taxpayer dollars – so far they have requested roughly $25 billion. On March 16, FCC released a national broadband plan “to bring broadband Internet connections to every home and businesses in the United States,” according to the Washington Post.



That night not one of the network evening shows mentioned the enormous government proposal – instead all three reported Tiger Woods’ return to golf at the Masters Tournament, ABC and CBS covered Michael Jackson’s posthumous record contract and NBC warned against kids going to Mexico for spring break.



“Good Morning America” called the plan “ambitious” and print outlets including Time magazine accepted the idea that there is in fact a broadband problem. A number of print outlets repeated cost figures billions too low without challenge and glossed over serious concerns about the possible seizure of bandwidth and loss of privacy.



One Reuters headline spun the plan positively, saying: “Some broadcasters like spectrum plan.” A New York Times headline provided only the perspective of the FCC on the “vital” plan.



USA Today led its front-page March 16 story with the FCC’s misleading assessment of the “problem.” The story said the FCC plans “to bring high-speed Internet service to millions of Americans who can’t get it today.”



It wasn’t until the sixth paragraph USA Today mentioned that 95 percent of American households already have access (only 65 percent have subscribed) “leaving 14 million largely rural Americans with no on-ramp.”



Many reports failed to remind readers about the prevalence of places that offer access (libraries, bookstores, Starbucks) and rarely admitted that some consumers may not want broadband access for whatever reason. Also, since broadband isn’t the only type of Internet access, it is reasonable to assume very few people are actually unable to get online if they want to.



FCC chairman Julius Genachowski claims broadband must become more available and “affordable” or it threatens “American’s global competitiveness.”



The FCC was ordered in the 2009 stimulus package to come up with a plan to increase broadband access and affordability. According to the NY Times, the plan is 376 pages long. It would mandate the expansion of broadband infrastructure and cellular towers.



The stimulus package “earmarked” $7.2 billion for broadband deployment, but an FCC task force found that costs would “range between $20 billion and $350 billion,” according to Information Week.





A Costly Solution



The FCC broadband plan wants to not only extend service and somehow lower its cost; it is calling for 100-megabits-per-second speed broadband to 100 million homes by 2020. The current average for access speed is 3 to 4 megabits per second. AT&T Inc. and Qwest Communications were “irked” by that goal, according to Reuters.



Qwest called it “a dream.”



Increasing the speed of all broadband access by 24 to 33 times what it is now will carry enormous costs. The FCC’s $350 billion estimate was specifically for 100 megabits-per-second speed broadband.



But surrounding the FCC announcement of its plan the news media downplayed that possibility by repeating low estimates and mostly ignoring the $350 billion high-end estimate. All three networks ignored the FCC announcement on their evening shows March 16. While ABC’s George Stephanopoulos cited an even lower estimate of “at least $15.5 billion” that morning.



The only mention of cost in Brian Stelter’s New York Times story was the FCC’s desire to change the Universal Service Fund, which already spends $8 billion a year to help rural and poor households get phone lines.” The Washington Post mentioned tapping that $8 billion fund and seeking up to $16 billion from lawmakers – but did not add those together to come up with $24 billion.



CNN’s chief business correspondent and Newsroom anchor Ali Velshi agreed that the Internet needs a “big boost” and discussed the broadband plan with former FCC chairman Michael Powell on March 16, but did not mention ANY price tag in that segment.



Meanwhile liberal blogs and think tanks including Huffington Post and Brookings Institution have mentioned the $350 billion estimate.



Genachowski says those much higher speeds are necessary for national competitiveness, but ABC accidentally undermined that claim on March 16. After mentioning the broadband plan, Becky Worley went on to discuss how people can spend less money on the internet.



Stephanopoulos suggested to Worley that “not everyone needs the real premium [broadband Internet] service.” Worley agreed and suggested that people ask for only the basic tier service in order to cut costs.



David Burstein, editor of industry newsletter DSL Prime, told The New York Times, “They [FCC] talk, talk, talk about affordability, but when you look at the plan, most peoples’ prices are going to go up.”





Broadcaster and Other Concerns



One obstacle currently in the FCC’s way are broadcasting companies that hold more bandwidth (or spectrum) than they currently use. Time magazine described the financial value of this bandwidth accurately calling it “the new black gold.”



The FCC wants broadcasters to surrender this extra bandwidth, but have not provided all the details. Reuters reported that TV broadcasters “will be asked to give up spectrum to wireless carriers” and that the FCC plans to “let them share” in the profits from auctioning off the bandwidth. Those profits typically go the U.S. Treasury so there is no way of knowing if broadcasters would receive reasonable compensation.



Although “Good Morning America” and CNN Newsroom didn’t mention it, there is both opposition and concern about FCC proposal. Associated Press reported on March 15 that broadcasters oppose returning some of their bandwidth.



On March 15 BusinessWeek quoted Dennis Wharton, National Association of Broadcasters spokesman, who said “We’re hopeful that doesn’t suddenly become ‘voluntary’ with a gun to our heads.”



One day later Wharton told the Wall Street Journal, “We are concerned by reports today that suggest many aspects of the plan may in fact not be as voluntary as originally promised.”



An editorial in the Journal called the plan a “Trojan Horse,” and said that the FCC wants to reclassify broadband services so it can impose more regulation. Other intrusions into the free market were mentioned in that editorial, including the potential for “forcing major broadband providers like Time Warner Cable and Qwest to share their high-speed networks with smaller competitors at federally set rates.”



PCMag.com also found downsides to the plan that were ignored by TV broadcasts and many print stories. David Murphy asked “Who Hates the National Broadband Plan?” In answering that question, he mentioned government agencies like Department of Defense, TV broadcasters, mobile carriers, lawmakers and individuals.



Free market think tank The Competitive Enterprise Institute released a statement expressing concern the national broadband plan’s call to create many new federal programs. “[T]he Universal Service Fund has illustrated, government-centric efforts to expand telecommunications networks suffer from inefficiencies, waste, and fraud.”



Taxpayers should also be concerned about the plan because it calls for a “digital goods tax” and expansion of the Universal Service Fund so that the tax is expanded to all types of telecom service in order to subsidize some users, according to American’s for Tax Reform.