updated 06:30 pm EDT, Tue September 29, 2009
FCC broadband plan may need $350 billion
A mid-progress update from an FCC panel said today that the US may need $20 billion to $350 billion invested into broadband to realize current government plans for readily available, national Internet access. The agency warns that its data is incomplete but that the figures may be necessary depending on the guaranteed speeds, with $20 billion covering relatively basic broadband while the top sum would cover high-grade access. The figure is well beyond the $7.2 billion so far assigned to the initiative.
Part of the cost increase would address quality of Internet service rather than just basic connections. Only four percent of US homes lack any kind of Internet access, but about 33 percent opt not to subscribe and many of the remainder often don't receive speed sufficiently close to what they were promised. A large portion only receive 50 to 80 percent of their promised speed, the FCC said. Internet connections rarely achieve peak speeds due to overhead, but it's widely reported that some areas are frequently underserviced and bog down during peak usage hours.
Internet providers have often publicly resisted broadband coverage efforts of the sort by claiming that it's impractical to expand into rural areas with little to no existing coverage; the lack of subscribers and the traditionally lower income levels have often meant little return on the investment even after years of income from service. They have been more aggressive in upgrading their existing networks but have often chosen to implement bandwidth caps or traffic throttling rather than implement more frequent but costlier upgrades.
Subsidizing the service in these areas may help offset some of the costs for users in particular, the FCC said in its update.
The news comes just as the CTIA, the carrier-backed cellular association, made a formal ex parte filing asking that the government auction off or otherwise assign at least another 800MHz of spectrum to accommodate the increasing need for wireless data. The request includes a push to either bond existing slices of spectrum or to give up already available spectrum.
In the message, the corporate advocacy group claimed it would be needed for the "virtuous cycle" of the transition to faster services like 4G, when carriers plan to upgrade their capacities well above current demand with the expectation that it will increase in the future. Without the added spectrum, the CTIA believes it might not have enough bandwidth to cope with a surge in mobile Internet use.
"We are facing a perfect storm where demand may outpace supply," the group wrote.
Spectrum has already been a major concern for AT&T, whose major 3G network failures in New York, San Francisco, and some other major US cities have been directly attributed to the telecom firm's inadequate bandwidth until very recent upgrades. These areas had frequently only used the 1,900MHz band for 3G and have been crushed by demand from iPhones, as well as other data-heavy phones, until AT&T activated 3G on the wider and longer-ranged 850MHz band in these areas.