March 2009

Debate about the broadband divide in America resurfaced at a Thursday afternoon public roundtable about how the federal government should spend $7.2 billion in broadband. Thursday was the fourth of six days of public hearings by the Commerce Department's National Telecommunications and Information Administration and the Agriculture Department's Rural Utilities Service, and the afternoon discussion, about rural and unserved areas, was the final panel focus on the broadband "have-nots." Other topics - including interconnection obligations, the role of the states, and broadband mapping - will be considered in a public forum in Washington on Monday. Tuesday, the final day of public hearings, will raise the subjects of compliance, selection criteria and community economic development.

At the National Telecommunications and Information Administration and Rural Utilities Services' Wednesday joint public meeting in Flagstaff (AZ), tension surfaced when NTIA's Mark Seifert put the implications of accountability, innovation, and wide distribution of funds under the spotlight. Many wanted the 20 percent match provision waived as a matter of course. Some called for acceptance of "in-kind" contributions - like state deeds to the rights of way for telecommunications wires - as constituting a match . Seifert's pushing back in his questions may indicate that the agency is more inclined to stretch the public dollar by staying with a requirement for a cash match in most cases. Echoing his call at the same panel in Las Vegas for carriers to put some "skin in the game," Seifert addressed a credible proposal, and said that there would need to be a relationship between "assertions and proof." A better proposal would show that "people have thought this through". He also characterized a need to create projects that support a "test-bed" model. Seifert also pleaded for ideas that would allow NTIA to sort out a pending deluge of grant applications.

The uncertainty surrounding Net Neutrality has given rise to a technology known as Deep Packet Inspection (DPI) that offers Internet service providers unprecedented control over Internet content. The use of DPI technology by Internet service providers should raise serious concerns for both users and lawmakers. The emerging DPI business model, marketed for its ability to monitor, control and ultimately charge subscribers for every use of an Internet connection, poses a major threat to the open Internet. In just one of many examples, DPI manufacturer Allot describes how its DPI product "enables service providers to project potential revenues and profits from setting up a tiered service infrastructure" and allows providers to "reduce the performance of applications with negative influence on revenues (e.g. competitive VoIP services)."

Over recent years, broadband has moved from being a desirable to an essential component of the digital economy; indeed, many countries as well as the European Commission are considering whether to make it a part of the "universal service" of telecom activities, which should be made available to all consumers. A study prepared for the Commission last year highlighted benefits of broadband in terms of labor productivity, employment levels and economic growth. The study claimed that as many as 2 million jobs could be created by a rapid development of broadband within the European Union, as well as an increase in foreign investment. Advocates of universal broadband claim there are particularly important benefits in terms of rural and regional development, since it makes remote working a more practical proposition, and reduces the "peripherality," which has often been seen as a constraint on growth in those areas.