In Defense of the National Broadband Plan

I’m grateful that Craig Settles responded to my offer to debate the National Broadband Plan in his column earlier this week. In such a discussion, it’s important to be clear about where we agree and disagree. In this case, the disagreements appear rooted in Mr. Settles’ apparent unfamiliarity with the National Broadband Plan, his lack of understanding the mechanics of the current Universal Service Fund, and his unwillingness to engage in the standard incremental cost/benefit analysis that Congress expects.

Mr. Settles first critiques the plan’s proposal to set the minimal level of broadband speed to be subsidized through the Universal Service Fund. He notes that I asked any critic to answer three questions: What is the minimum speed to be subsidized; how much will it cost; and how will we pay for it? He doesn’t answer any of these questions.

To the first, he says it’s a “trick question,” as the goal isn’t speed. We agree speed isn’t the ultimate goal, as he notes later. But it is an essential, rather than a trick, question. If the federal government is going to subsidize networks in areas where market forces won’t do the trick, then the government has to establish a technical standard for what is being subsidized. Mr. Settles refusing to answer the question of what that standard should be suggests he doesn’t understand that without such a standard, the government could end up subsidizing narrowband speeds, an outcome I’m sure he would not favor.

To the second question  — What would it cost? — he says, “one hellava a lot.” That answer might work for Mr. Settles’ work. I think, however, Congress and the American people deserve a more meaningful answer. For people interested in how the plan provided specific answers for a variety of scenarios, I would refer them to the 137-page technical appendix to the plan found here.

To the third question, he suggests we look at the model demonstrating how three communities found ways to build gigabit networks without federal dollars. If he means we as a country should let municipalities do the job, then it’s illogical to criticize the federal government for not providing enough support. Further, it’s odd he ignored Recommendation 8.19 in the plan that proposes Congress overturn state laws that prohibit such municipal efforts. If he’s arguing municipalities should have the power to meet their citizens’ needs as they see them, then we agree. I wish more attention were paid to that recommendation, as some municipal efforts are quite promising, and as a matter of principle, laws restricting deployment by any party are unwise.

But if, as he seems to suggest in other parts of his critique, we should use universal service to fund higher speeds to residential areas, then we do have an important disagreement. We proposed a plan that would result in everyone having access to networks at speeds (4Mbps actual down/1Mbps actual up) higher than the average user uses today and fund it through reprioritizing existing universal service funds. Mr. Settles appears to suggest we need to subsidize speeds of 100Mbps everywhere. (If I’ve misinterpreted him, I apologize and hope he will clarify.) That would cost over $300 billion in new money, and if collected through the current system, would add an additional $30 a month to every subscriber’s bill, causing broadband to become unaffordable to tens of millions of current subscribers. Surely, we don’t want to adopt a policy that results in a massive drop-off of broadband use, yet that would be the consequence of adopting Mr. Settles’ proposal. Further, we saw no evidence that the incremental benefits of increasing speeds from 4Mbps to 100Mbps for homes that don’t enjoy access to such networks is anywhere remotely close to the incremental cost of $300 billion.

Mr. Settles then goes on to suggest that 4Mbps is too low because it won’t be enough for business purposes. He’s right, but he ignores that the plan’s 4Mbps target is for homes, not businesses. The data we collected suggested that businesses today in most of America have no problem getting access to the speeds they need. (For a full discussion of the data, see the report noted above.) We were concerned about the future, which is why we proposed, as one of the six goals, a gigabit connection to an anchor institution in every community, and developed some ideas — such as eliminating rules that prohibit anchor institutions from sharing networks — to advance that goal. Mr. Settles ignored this goal — which is designed to assure business class connectivity to every community — and the policy proposals, and instead, implies that the plan recommended wireless will serve all businesses’ needs. That simply isn’t accurate.

Mr. Settles questions whether the research we did was “hands-on.” It consisted of, among other things, 36 public workshops involving over 10,000 people, 31 public notices generating over 23,000 comments and nine public hearings. We made presentations in eight public Commission meetings so everyone would know what we thought the facts were, where we saw the gaps and what we thought the solutions were.

Mr. Settles also challenges some personal statements I’ve made, as is his right. He disagrees with my prediction that “4G is going to end up being more important to more people over the next couple of years than increases in wireline speed.” I made that prediction based on a number of market trends, such as growth in smart phone purchases, use of mobile applications, investment trends in networks and consumer surveys. His response, which is,“for a great many places, broadband speeds are not pretty good” is both contrary to the prevailing data we saw and not relevant to the question of where the upside for consumers is in the next several years. I would be happy to engage in a wager as to the primary way consumers access the Internet five years from now, and will put my money on wireless.

He also challenges a statement I made as to why we didn’t recommend a new unbundling regime by saying we must protect against monopolistic behavior. While I agree we need such protections, I was responding to a specific proposal we believed would have stifled investment and competition. If he believes we should have adopted an unbundling regime, he should be clear about it, but also clear about the details of such a regime, such as what the wholesale discount rate should be.

In addition, he takes a comment I made about shifting funds from subsidizing numerous wireless carriers in a market (in some areas, the government subsidizes more than a dozen wireless companies) to instead focus the funds on areas without any broadband providers as evidence I don’t want competition. I’m not opposed to competition, but think that subsidizing construction of a 4Mbps-capable network where there is currently no broadband provider is a higher priority than subsidizing a dozen voice competitors where the market already provides multiple consumer options.

His comment is particularly surprising, as I’ve read other comments from him in which he criticizes wasteful Universal Service Fund spending. I would have thought he would agree that spending public money to subsidize multiple competitors should not be our highest priority.

We do agree on two important areas. First, we agree broadband is a critical economic development tool. There are a number of recommendations in the plan that relate to that understanding, as well as a specific chapter (Chapter 13) that details a number of proposals for improving how we can use broadband to drive economic development. In addition, I recently published a paper for the Knight Commission which called for creating a universal service fund to run a competition for local governments to come up with demonstration projects for utilizing broadband for economic development. (It can be found on pages 27-28.)

I also profoundly agree with the spirit of Mr. Settles’ headline: “Some Assembly Still Required.” The best line in the plan is the beginning of the final chapter, on implementation: “This plan is in beta and always will be.”

While I’m very proud of the work the team did to produce the plan and believe its recommendations lead us in the right direction on many fronts, I’m certain it’s far from perfect and hope that as it’s implemented, it’s constantly improved.  For that to happen, critics will have to answer the same questions we struggled with, formulate specific policies based on hard data, and acknowledge the hard trade-offs necessary to move our country forward. Mr. Settles has a distinguished career writing about community broadband, but his critique of the National Broadband Plan doesn’t rise to the standard he has previously met, nor the standard we need to improve on the plan.

Blair Levin, served as FCC Chief of Staff from 1993-1997, and returned to the FCC in 2009 to lead the team that wrote the National Broadband Plan. He is currently a fellow in the Communications and Society Program at the Aspen Institute.

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