Broadband:TheRoadto21stCentury EconomicGrowth

ByMiladAlemohammad
2009WiseIntern

August2009

Sponsoredby:

 AbouttheProgram
Foundedin1980throughthecollaborativeeffortsofseveralprofessionalengineeringsocieties, theWashingtonInternshipforStudentsofEngineeringhasbecomeoneofthepremier Washingtoninternshipprograms.Itsgoalistogroomfutureleadersoftheengineering professionwhoareawareofandcancontributetotheimportantintersectionsoftechnology andpublicpolicy.

Acknowledgement
Firstandforemost,IwouldliketothankIEEEUSAforsponsoringmeforthe2009WISE program.IwouldspecificallyliketothankEricaWissolikandRussellHarrisonfortheir mentorshipinwritingthispaper.IwouldalsoliketothankChrisBrantleyfortakingtimeto providemewithhisgoodreviews. Additionally,IwouldliketoacknowledgeinvaluableinsightsandadviceIreceivedfromDr.John Richardson,Dr.MichaelMarcus,Dr.BruceEisenstein,Ms.EmilySopensky,andMr.Don Thomas. Lastly,IwouldliketothankMelissaCarl,andourfacultymemberinresidence, Dr.DanielDeckler.IwouldalsoliketothankMr.JohnBuydosattheLibraryofCongressforhis assistance,andeachofmyfellowWISEinternsformakingthisprogramsounique.
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TableofContents

Sponsoredby..................................................................................................................................1 1. Introduction.............................................................................................................................4 1.1 1.2 2 Motivation:ProblemDefinition.......................................................................................4 PlanofDiscussion.............................................................................................................6

TheStateofBroadbandinAmerica.........................................................................................8 2.1 Broadband:DifficultieswithDefinition,DataandStatistics............................................8 2.2 CapabilityandAvailabilityofBroadbandBackboneandMiddleMile: .........................12 .

3. WhyUniversalBroadbandMatters?.....................................................................................17 3.1 3.2 BroadbandandRuralDevelopment ..............................................................................17 . BroadbandandItsPotentialImpacts.............................................................................19

4. FactorsAffectingBroadbandAdoption...............................................................................233 5.WhatistheSolution:PolicyRecommendations.....................................................................277 DataCollection:...................................................................................................................277 Technology:.........................................................................................................................277 Supply:...................................................................................................................................29 Adoption:.............................................................................................................................322 6. Appendix..............................................................................................................................344 i. NeedforSpectrumManagement....................................................................................344

ii. AvailableMiddleMileOptions.........................................................................................377 iii. ApplicationTable.............................................................................................................400

1.
1.1

Introduction
Motivation:ProblemDefinition

Broadbandisadrivingforceinthe21stcenturyeconomy.HighspeedInternetcontributes positivelytojobcreation,education,economicdevelopmentsandincreasedproductivity. AccordingtoareportpublishedbyConnectedNation,TheEconomicImpactofStimulating BroadbandNationally,acceleratedbroadbandadoptionresultsinadirectestimatedeconomic growthof$134Billionannually. 1 TheAmericanRecoveryandReinvestmentActof2009invested$7.2billioninbroadband stimulusanddirectedtheDepartmentofAgriculturesRuralUtilitiesServices(RUS)andthe DepartmentofCommercesNationalTelecommunicationsInformationAdministration(NTIA)to expandbroadbandserviceaccesstounservedandunderservedregions,stimulatejobcreation, spurinvestmentsintechnologyandinfrastructuresandprovidelongtermeconomicbenefits. AsaresultNTIAandRUSstartedthe$4.7billionBroadbandTechnologyOpportunitiesProgram (BTOP)andthe$2.4billionBroadbandInitiativesProgram(BIP). BIPprovidesloansandgrantsforbroadbandinfrastructureprojectsinruralAmerica.BTOP fundsbroadbandinfrastructureprojects,publiccomputercenters,andsustainablebroadband adoptionprojects. 2 NTIAwillspendatleast$200millionongrantstoexpandbroadbandaccessatpubliccomputer centerssuchascommunitycollegesandpubliclibraries.Theagencieswilluseanother$350

ConnectedNationInc.,TheEconomicImpactofStimulatingBroadbandNationally,availableat http://www.nga.org/Files/pdf/0812BROADBANDCONNECTED.PDF. 2 http://www.broadbandusa.gov/

milliontocreateabroadbandinventorymap,andfinally$250millionwillbeusedtomake grantsforinnovativetechnologiessuchasWiMax.

BTOPFunding($billion)
0.2 0.35 0.25 InfrastructureProjects InnovativeTechnologies InventoryMap PublicComputerCenters

3.9

Table1.BTOPfunding

NTIAandRUSwillmakefundsavailableinthreedifferentrounds.OnJuly1,2009,theagencies jointlyissuedaNoticeofFundsAvailability(NOFA). 3 UnderNOFA,$1.6billioninBTOPfundsis availableforawards,and$1.2billionisdesignatedtofundprojectsthatexpandservices throughMiddleMileandLastMileinfrastructurestounservedandunderservedareas. Expandingbroadbandtounservedandunderservedregionsisimportantbecause: 1) HighspeedInterneteliminatesthephysicaldistancesandenablespeopletoaccess resourcesthatenhancetheirwelfare

NoticeofFundsAvailabilityavailableat http://broadbandusa.sc.egov.usda.gov/files/BBpercent20NOFApercent20FINALpercent2007092009.pdf.

2) Broadbandprovidesruralsocietieswithbettereducationalresources,onlinecourses, andincreasedcommunications 3) Applicationssuchastelemedicineandinformationhealthtechnologycannotbebroadly deployedwithoutaccesstobroadband. Thedifficultiesassociatedwithaccessandadoptionofbroadbandaremultifold.Ruralareas, duetotheirlowpopulationdensitiesandlongdistancefromurbanandsuburbanareasreceive verylittleattentionfromserviceproviders.Lackofeconomiesofscalehasmadeitinefficientto expandinfrastructurestoruralregions. Furthermore,socioeconomicfactors(suchaslackofbasicinfrastructures,economic inefficiency,andthedigitaldivide),theinabilitytoaffordservices,andtechnicalrequirements (suchasincreasinguseofbandwidth 4 )offerchallengestoexpansionofbroadbandservicesto ruralareas.

1.2

PlanofDiscussion

Asummaryofsectionsinthispaperisincludedbelow:

Sectiontwowillfocusonthecurrentstateofbroadband.Inthissection,appropriate definitionsforrural,unservedandunderservedareproposedanddifficultieswithavailabledata onadoptionandaccesstobroadbandarediscussed.Thissectionalsodealswiththecurrent technologicalpossibilitiesinliftingthebarriersagainstbroadbandexpansion.

Consumerbandwidthusagehasgrownrapidlyoverthepastdecade.Ifthegrowthcontinueswiththesamepace, Mooreslawsuggeststhatneedforconsumerbandwidthwillexceed380Mbpsintenyears,andoneGbpsin thirteenyears.

Sectionthreeexplorestheimportanceofexpandingbroadbandtoruralareas.Thissection focusesonruraldevelopmentsandimpactsofbroadbandadoptiononthesocietyand economicgrowth. Sectionfourconsidersbroadbandadoptionbythehouseholdsandidentifiesthefactorsthat impacthouseholddecisionmaking.Whilethissectionfocusesontheavailabletechnologiesin providingcheaperservices,sectionfourputsemphasisonwaysbywhichwecaninfluence servicetakeupamonghouseholds. Sectionfiveproposesappropriatepoliciesthataddresslackofaccessandadoptioninunserved andunderservedareas.Theproposedpoliciescanbecategorizedas: Datacollection Technology ProvidingmorespectrumbytheFederalCommunicationsCommission(FCC)for wirelessbroadband ProvidingR&Dtaxcutsinunservedandunderservedtopromotemarketdrivers Supply Preparearuralbroadbanddevelopmentmap Improvethemiddlemileinfrastructuresthroughcooperationwiththe DepartmentofTransportation Adoption Makemorefundsavailableforschoolsandpubliclibraries Extendthelifelonglearningtaxcredittocoveraccesstobroadband
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2. TheStateofBroadbandinAmerica
2.1 Broadband:DifficultieswithDefinition,DataandStatistics

5

FCCdefinesthefollowinglevelsofbroadband: Greaterthan200kbpsbutlessthan768kbps Equalorgreaterthan768kbpsbutlessthan1.5Mbps Equalorgreaterthan1.5Mbpsbutlessthan3Mbps Equalorgreaterthan3Mbpsbutlessthan6Mbps Equalorgreaterthan6Mbpsbutlessthan10Mbps Equalorgreaterthan10Mbpsbutlessthan25Mbps Equalorgreaterthan25Mbpsbutlessthan100Mbps Equalorgreaterthan100Mbps

Table2.BroadbandtiersdefinedbyFCC

Definitions
ToaccomplishacomprehensiveanalysisofthecurrentstateofbroadbandinruralAmerica,itis importanttofirstidentifyaproperdefinitionofwhatconstitutesrural,unserved,and underserved. 6 Unlessotherwisespecified,thisreportusestheCensusBureausdefinitionofrural.TheCensus Bureaudefinesruralasallterritoriesoutsideofanurbanarea.Thebureaufurtherclassifiesan urbanareaonthebasisofpopulationdensity.Urbanareaincludesacentralcityandthe surroundingdenselysettledterritorythattogetherhaveapopulationof50,000ormoreanda populationdensitygenerallyexceeding1,000peoplepersquaremile. 7 Accordingtothe

5 6

FCCdefinesbroadbandTiersinitswebsite,WCDocketNo.0738. Unfortunately,thedefinitionsofruralevenbytheUSgovernmentcauseconfusionandprovidedifferent quantitativemeasures.Currentlytherearemorethantendifferentdefinitionsavailableforrural.Government agenciesbasedontheirpurpose,defineruralbyconsideringfactorssuchasqualityofservice,population, populationdensity,industrialactivity,etc. 7 TheBureauoftheCensusdefinesanurbanizedarea,http://www.census.gov/population/censusdata/urdef.txt, (UA)bypopulationdensity.Accordingtothisdefinition,eachUAincludesacentralcityandthesurrounding

Bureau,97.5percentofUnitedStateslandareaand25percentofthetotalnationspopulation areconsideredrural. 8

Figure1.U.S.populationdensitymap

Asfarasdefinitionsforunservedandunderservedareasareconcernedthisreportfollows thoseputforthbytheNTIA.TheNTIAdefinesunservedandunderservedareasas: UnservedArea:anareacomposedofoneormorecontiguouscensusblockswhereat least90percentofhouseholdsintheproposedfundedservicearealackaccessto facilitiesbased,terrestrialbroadbandservices,eitherfixedormobile,attheminimum broadbandspeed. UnderservedArea:anareacomposedofoneormorecontiguouscensusblockswhere atleastoneofthefollowingismet:1)nomorethan50percentofhouseholdsinthe proposedfundedserviceareahaveaccesstofacilitiesbased,terrestrialbroadband serviceatgreaterthantheminimumbroadbandspeed;2)nofixedormobilebroadband

denselysettledterritorythattogetherhaveapopulationof50,000ormoreandapopulationdensitygenerally exceeding1,000peoplepersquaremile.A"county"isapoliticaldistinctionandisnotincorporatedintheBureau oftheCensus'classificationscheme,sooneUAmaycoverpartsofseveralcounties. Underthisdefinition,allpersonslivinginUA'sandinplaces(cities,towns,villages,etc.)withapopulationof2,500 ormoreoutsideofUA'sareconsideredtheurbanpopulation.Allothersareconsideredrural.
8

Seehttp://www.census.gov/population/censusdata/urdef.txt.

servicesprovideradvertisesbroadbandspeedsofatleast3Mbpsdownstreaminthe proposedfundedservicearea;or3)therateofbroadbandsubscribershipforthe proposedserviceareais40percentofhouseholdsorless. 9 AccessandadoptiontotheservicesaretwokeystodefinitionsputforthbytheNOFAfor unservedandunderservedareas.Whileaccessisdrivenbyprovisionofmiddlemileandlast mileinfrastructures,adoptionisindirectrelationtofactorssuchashouseholddecisionmaking behaviorandbusinessactivitiesinagivenarea.

DifficultieswithBroadbandDefinitionsandData
Lackofacommondefinitionandtheethicalneedforbusinessestokeepcorporateinformation confidentialhavebothcontributedtodifficultiesincollectionofdataonbroadband availability. 10 Inadditiontothedifficultieswithdatacollection,therearealsosomeproblems withtheexistingdata.Forinstance,theFCCestimatesthatmorethan99percentofzipcodesin UnitesStatesenjoyatleastoneInternetServiceProvider(ISP)withconnectiontoanenduser withinthegeographicalregion,andconcludesthatInternetservicesareavailabletomorethan 99percentofthenationspopulation. 11 Theproblemwiththisestimateisthatitallowsasingle businesssubscribertorepresentazipcodeareaofanysizeandpopulationdensity,without providingaclearcountoftheactualnumberofhousesandbusinessesthataccessbroadband servicesinthatregion.Moreover,manyruralandurbanareassharethesamezipcodeareain theUnitedStateswhichmakesthecurrentdataunreliable.

NoticeofFundsAvailabilityavailableat http://broadbandusa.sc.egov.usda.gov/files/BBpercent20NOFApercent20FINALpercent2007092009.pdf. 10 Seehttp://www.usiia.org/pubs/Rural.pdfP.11 11 FederalCommunicationsCommission(FCC)GNDocketNo.0745.InquiryConcerningtheDeploymentof advancedTelecommunicationsCapabilitytoAllAmericansinaReasonableandTimelyFashion,andPossibleSteps toAccelerateSuchDeploymentPursuanttoSection706oftheTelecommunicationsActof1996.FifthReport 0888Washington,DC:June12,2008.

10

Thedifferencebetweenavailability,penetrationandqualityofserviceisalsooftenneglected whenpreparingreportssuchasthis.Evenifwetake99percentserviceavailabilityforgranted,a disparityremainsinadoptionratesbetweenruralandurbanareas.The2008PewBroadband AdoptionStudyfoundthatonly38percentofruralresidentshavebroadbandattheirhomesas opposedto57to60percentoftheircounterpartsinurbanandsuburbanregions. 12

Figure2.Internetadoptionmap 13

12

SeePEWINTERNET&AMERICANLIFEPROJECT,HOMEBROADBANDADOPTION2008,at3(2008),availableat http://www.pewInternet.org/~/media/Files/Reports/2008/PIP_Broadband_2008.pdf(2008PEWBROADBAND ADOPTIONSTUDY).ThesurveywasconductedbyphonefromApril8,2008toMay11,2e008among 2,251Americanadults,1,153ofwhomwerebroadbandusers 13 Availableatwww.ers.usda.gov/publications/agoutlook/JuneJuly2002/ao292h.pdf

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2.2

CapabilityandAvailabilityofBroadbandBackboneandMiddleMile: 14

Interoperabilitybetweenaccesspoints,backbone,middlemiletransportlines,andlastmile infrastructureisanecessaryrequirementforanysuccessfulbroadbandproject.Thissection exploresthecapabilityandavailabilityofbroadbandbackbone,middlemileandlastmile infrastructures.

Backbone
Themajorityofthenationsbroadbandbackboneiscomposedoffiberopticcables,with satellitelinksconnectingareasthataredifficulttoreachbylandlinesorunderwatercable.Fiber providesanalmostunlimitedcapacityoftransportingdataathighrates.Withcurrentwave divisiontechnologyitispossibleforasinglefibertocarry400Gbpswhichisequivalentto 520,000broadbandsignals(at768Kbps)or6milliontelephonecalls(at64Kbps). 15 CompaniessuchasAT&T,MCI/WorldCom,Sprint,Qwest,Level3,ITXC,andWilliamshavebeen rapidlybuildingdatanetworks.Therearecurrentlymorethan40Internetbackboneproviders. $13.5billioninvestmentsinbackboneinfrastructuresin2001ledtoincreasedcompetition whichinturnmadebroadbandeconomicforbackboneproviders.However,thesebackbone infrastructuresarelaidalongthemajorpathways,tensofmilesawayfrommostruralandex urbanareas.

14

Backboneisthemajor,highcapacityfiberlinefromwhichInternetistappedintosmallerregions.Thereareonly 300backbonepathsavailableintheentireworld. 15 JarboeKenan,KnowledgeManagementAsanEconomicDevelopmentStrategy,2001,P.5availableat http://www.eda.gov/PDF/1G3LR_6_jarboe.pdf

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MiddleMile
Besideslowpopulationdensity,distancefrommajorbackboneinfrastructuresmakestransfer ofbroadbandservicestoruralareasprohibitivelyexpensive.AccesstohighspeedInternetwill onlybepossiblethroughexpansionofcurrentmiddlemilenetworkstoeliminatethebarrier againstlocalprovidersindevelopingthelastmileinfrastructures.Middlemiles,asthe interstatehighwaysandhighvoltagepowerlineswere,requiredirectattentionbythe governmentofficials.Theseinfrastructures,duetotheirsignificantconstructioncostandlackof marketforces,areunattractivetomajorproviders.Ononehand,weakeconomiesofscale prohibithighcapitalcompaniestoinvestinmiddlemileinfrastructures,andontheotherhand smalllocalproviderscannotaffordconstructingtensofmilesofnetworksbetweenbackbone andruralcommunities. Provisionofmiddlemileinfrastructuretoruralareasissubjecttocompromises.While expensivefiberlinessupportupto400Gbps,stateoftheartwirelesstechnologiescansupport uptoonly1Gbpspermiddlemilelink(1300broadbandconnections,assumingthatevery subscriberisatfullcapacity).However,transmissioncostusingwirelesstechnologiesis estimatedtobe80percentlowerthanfiberlinks.Forathreemilelink,costsavingsusing wirelessisashighasnearly$2millionperlink.Giventhat70percentofruralareasareatleast 70milesawayfromtheInternetbackbone,wirelessmiddlemileinfrastructurecansave providersover$46millionperlink 16 .Itisalsoimportanttonotethatscarcityand

16

Foradetaileddescriptionofalternativemiddlemileinfrastructuresrefertoappendix.

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underutilizationofspectrumnearmetroandsuburbanareas,wheremiddlemileinfrastructures aretapped,callsforbetterspectrummanagementpolicies. 17

LastMile
Inadditiontomiddlemile,thelastmileinfrastructuresareconsideredasaseriouschallengefor networkproviders.Lowpopulationdensityandlackofeconomiesofscalemakeexpansionof highspeedInternetprohibitivelyexpensive. Internetproviderswillexpandtheirservicesinpresenceofmarketforces.Marketforces guaranteeprovidersareturnofinvestmentinfaceoftheirtotalcostofownership(TCO).TCO comprisesoftwocostcategories;theCapExandOpEx.WhileCapExincludesexpensesrelated toplanning,andinstallationofhardwareandsoftwareandinitialconfigurationcosts,theOpEx coversexpensesrelatedtonetworkmanagement,monitoringtroubleshootingandsupport. 18 Wirelesstechnologiesofferpromisesindeliveringcheaperservicestousersinareaswithlow populationdensity.Inadditiontothesimplicityandreductionincostwirelesstechnologyalso offersmoreflexiblenetworkingbyenablingpointtomultipoint(PTMP)access. 19 Wirelessisan attractivesolutiontoareaswithlowpopulationdensityandweakeconomiesofscale. ThefollowingexampledemonstrateshowWiMAX,agrowingwirelesssolution,haschangedthe lifeofruralresidentsinAlstonMoore.

17 18

Refertoappendixforadetaileddiscussionofspectrummanagementpolicies FarpointGroup,Wirelinevs.Wireless:Exploringtotalcostofownershipinoutdoorapplications,June2009 19 Onetransmittercansendsignalstomanyreceivershencemakingthesystemmoreflexiblebyeliminatingthe needtodirectwiredlinks.

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CybermoornetworkoffersitsWiMAXservicestohousesinAlstonMoor,atownwith2,500 residentsonthecostofnorthwesternEngland.InadditiontohighspeedInternetthenetworks provideservicessuchastelemedicineanddistancelearning.WiMAXhasnotonlymade residentialbroadbandpricesaslowas$14.5amonthforupto12Mbps,butithasledtoa CapExsavingofmorethan$700,000andareturnofinvestmentofabout25timetheamount invested. 20 Itisimportanttopointthatwirebasedtechnologies,duetheirenormousCapEx cost,couldneverbeemployedinsucharea. Inconjunctionwithexistingtechnologies,newnetworkarchitecturescanalsohelpinreducing theconsumerprices.Theabilitytoshareresourcesisakeydriverinreducingthenetwork servicecosts.Wirelessnetworkarchitecturescanalsoundergochangesinunservedareas. Currently,theprevalentmodelforhomeaccesstothebroadbandtechnologiesisthatofstar topologywheretheusersareconnectedtothehob(centraloffice)withanaccessline.Multi hubwirelesstopologiesarepromisingandcanoffernewadvantages.Inthiswirelessaccess,a fixedwirelessaccesspointistypicallymountedontherooftopofasmallwirelesscoveragearea calledahobandactsmuchlikearouterontheInternet,automaticallydiscoveringneighboring accesspointsandrelayingpacketsacrossseveralwirelesshobs.Withthisstrategythe ownershipofaccessnetworkbecomesdistributedacrossthehouseholds.Suchdecentralized networkarchitecture,notonlyprovidesadegreeofautonomy,butitalsosubstantiallyreduces thecoststhroughsharedresourcesandservices. 21

20

See18 Someemergingwirelessbroadbandtechnologieshaverealizedtheefficienciesoftheorderof10b/s/Hz,and unprecedentedlevelsofindividualandaggregatecapacitiesintheorderofGb/swirelessdatarates.

21

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Inrecentyearsbroadbandoverpowerlines(BPL)hasemergedasathirdoptiontoservice providers.QualityofserviceinBPLdegradesduetopresenceofnoiseandtransientsin60Hz powerlineswhichinturnwilllimitthebandwidthduetouseofmultiplerepeaters.However, BPLoffersadvantagestoreductionincostsinruralareas.BPLcaninparticularserveasan attractiveoptioninareaswherethepopulationdensityislower.Presenceoftransformers significantlyinhibitstheBPL.However,lessdenselypopulatedareasrequirelessnumberof transformerswhichinturnputstheminadvantagewhiletransferringbroadbandsignalsover powerlines 22 .

EisensteinB.,MarcusM.,SopenskyE.,ThomasD.,TeleconferenceonRoleofR&DinExpansionofBroadband Services,July24,2009.

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3. WhyUniversalBroadbandMatters?
3.1

BroadbandandRuralDevelopment

Astechnologyadvancesandnewapplicationsemerge,theabilityforbroadbandtoinfluence theeconomyexpands.Whileinvestmentsinbroadbandinfrastructuresandservicesdirectly impacteconomy,factorsdrivinggrowthsuchasinnovation,firmefficiency,competitionand globalizationofferindirectimpacts. 23 A2003studyconductedbyCriterionEconomicsfoundthat$63.6billioninvestmentsin broadbandtechnologieswilldirectlyimpacteconomicgrowthby$179.9billionincreaseinGDP andcreationof116,000.Thestudyalsoprojectedthat1.2millionjobscanbecreatedasa resultofnextgenerationbroadbanddeployment. 24 GDPisanindicatorofcountrysdegreeofprosperityanddevelopment. 25 Asthegovernment spendingintheUnitedStatesdropsandconsumptionratesflatten,grossinvestmentsand exportrelatedactivitiesremaintheonlywaytoexpandtheeconomy.Communication technologiesholdpromisestoruralrevival,sincethosecancreatetherequiredplatformsfor newinvestmentsinvarioussectorsincludingthefinancialmarket.Broadbandexpansionwill encouragelargebanksandfinancialinstitutionstobecomeasourceofcompetitionbymaking iteconomictooffertheirservicestoruralcommunities.Competitiveinterestratesandmore financialactivitiesareamongdirectconsequencesofbroadbandpenetrationinruralareas.

23

RobertD.Atkinson,FramingaNationalBroadbandPolicy,CommLawConspectusat4(Fall2007), http://tinyurl.com/2htbwo(AtkinsonFramingReport). 24 RobertCrandall;theeffectofubiquitousbroadbandadoptiononinvestments,jobs,andtheUSeconomy, conductedbyCriterionEconomy. 25 GDPcomprisesofconsumption,governmentspending,grossinvestment,exportandimport.

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Morespecifically,broadbandenormouslyimpactsruralbusinesses. Ruralcommunitiesareoftendependentonagriculture.Inpresenceofnetworkinfrastructures small,regionalfarmscanformstrong,nationalpartnershipthathelpsthemtosupplytheir productswithnoneedformiddlemen.Buildingontheagriculturaltraditionof entrepreneurshipbyformingregionalpartnershipsandpromotingbusinessformationisthe keytothefutureofmanyruralcommunities. 26 Furthermore,21stcenturyagricultureishighlydependentonnew,digitizedtechnologiesto meetadequatedegreesofefficiencyandproductivity.Forexample,farmersrelyontechnology toobtainaccuratemeasureandcontrolovertheamountofmineralsinthesoil. 27 Theyalsorely ontheInternettoforecastweatherconditions,markettheirproductsandfindhighqualityand cheapsupplies. Broadbandisalsoimportanttononfarmindustries.Businesspeopleand,inparticular, entrepreneursviewtheservicesasanecessitytothefutureoftheiractivitiesandwillinvest theirresourcesinareaswheretheycanconductbusinessonline.Communicationtechnologies havecontributedtoanewcultureinwhichselfgenerationandaccesstoglobalmarkets substituteforscarcityinlocalresources.AsAtkinsoncallsit,ahostofdigitaltoolsareenabling consumerstobecome,inthewordsoffuturistAlvinToffler,proconsumer,thosewho

26 27

FederalReserveBankofChicago,TheFutureofEconomicDevelopmentinRuralAmerica,July2006, Accordingtothedepartmentofagriculture2007Censusthehighestpercentageofruralbroadbandconnections areconcentratedinregionswithlargefarmsandranches.Thestudyalsofoundthatfarmsinruralareasareless likelytoutilizebroadbandconnectionsincomparisontothoseclosetourbanandmetroregions.Accordingto thesedata,farmsbroadbandadoptionhasincreasedfrom50percentin2002to56.5percentin2007.Thereisalso alargedifferencebetweenbroadbandpenetrationtofarmsbyregions.Thewestleadsinbroadbandconnections andthesouthlagsbehind.Fordetailedstudyofbroadbandpenetrationinfarms;seeBroadbandConnection HighsandLowsAcrossRuralAmerica,availableathttp://www.dailyyonder.com/broadbandconnectionhighs andlowsacrossruralamerica/2009/02/11/1921

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simultaneouslyactasbothproducerandconsumer. 28 Accesstobroadbandwillenablelow startupcost,innovativeideasinruralregionstobeturnedintoviablecompanies.Internet marketing,asectorthatgrewrapidlyonpromiseofInternetcanbemanagedfromanyrural home.AsIMS,anInternetmarketingcompany,asserts: Youwillhavebusinessfreedom,becauseyouwillbeabletosetyourownhoursand ultimatelydecidewhethertoworkfulltimeorparttime.Youalsohavethechoiceto workfromanoffice,orfromtheconvenienceofyourownhome.Furthermore,youcan alsoachievepersonalfreedom.IMSFranchiseessimplyestablishclientrelationshipsand performconsulting,whilewecompletetheactualtechnicalwork.Thistranslatesinto moretimeforyoutodoanythingyoupleaseonapersonallevel.IMScanhelpyou establishpersonalfreedomandthelifestyleyouwant,foryourselfandforyourfamily. 29 Anationwidebroadbandcanevenimpactruralmanufacturers.Flexiblemanufacturingand smalleroptimalsizesofplantswillgiveruralbusinessacompetitiveadvantageagainsttheir gianturbanandsuburbancompetitors.Inpresenceofdigitizedinfrastructuresandservices, smallfirmsandbusinesscanmovetheirfacilitiestoregionswithlowercostsandcanutilize theirsavingsinprovidingbetterservicessuchasfundingmoreprojects,andofferingquality healthcaretotheiremployees.

3.2

BroadbandandItsPotentialImpacts

Inadditiontoeconomicgrowth,thereareotherexternalitiesinbroadbanddeployment. 30 Expansionofbroadbandintroducesnewpossibilitiestoruralcommunities.Inrecentyears,

28 29

http://commlaw.cua.edu/articles/v16/16.1/Atkinson.pdf,p.12 http://www.entrepreneur.com/businessopportunities/imsInternetmarketingspecialists/197887.html 30 Atkinson,RobertD.(2007).FramingaNationalBroadbandPolicy.CommlawConspectus(16:145177).At http://commlaw.cua.edu//articles/v16/16.1/Atkinson.pdf

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ruralandexurbanareashavefacedadrasticoutmigrationoftheiryoungworkforce.Lackof balancedgrowthstrategieshascontributedtochangeintheproportionofpeoplelivingin metroversusnonmetroareas,whichinturnhascausedincreasesincosts,pricesandpollution inurbanregions.Broadbandpromisessomechangestothistrend: BroadbandEnsuresthatStudentsRemainConnected Broadbandkeepsstudentsconnectedintheglobal,digitized,andknowledgebased economy.Throughonlinetoolsandcoursesstudentsofanyagecanexperiencequality educationatconvenienceoftheirhomes,atreducedcosts.Onlinelearninghas promisestoimprovetheoverallstateofliteracyintheUnitedStates. BroadbandofferstheUnitedStatesMoreOpportunitiestoCompeteinGlobalMarket Twentiethcenturyeconomicstrategiesopenedthedoorsforthecreationand importationofnewjobs,industriesandresearchanddevelopments(R&D)totheUnited Statesbyallowingmarketbasedmechanismstodrivetheeconomy.Today,market drivenforcesleadcompaniestooffshorescience,technology,engineering,and mathematics(STEM)jobstolowcostcountries.WhileChinaandIndiaexcelinIT industry,thelackofdrivingmechanism(suchasjobs,education,interestinSTEM careers,lowR&Dtaxcreditsincomparisonwithotherdevelopednations)continueto causeadramaticdeclineindemandforITrelatedactivitiesintheUnitedStates. Broadbandcanchangethistrendbycreatingeconomicdevelopmentstrategiesto attractprivatesectorinvestmentsandattractnew,highskilledSTEMjobsinmorecities, townsandruralareas.Somecompanieshavealreadystartedrethinkingtheirglobal strategiesbylookingintopotentialU.S.locations,especiallymidsizemetropolitanand
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ruralareas,forlowcostdomestic(LCD)sourcingthatcanprovidemorethan30percent costsavingsovertheIThubssuchasSiliconValley. 31 Governmententities,semi regulatedindustriesandcompaniesthatareconcernedaboutsecurityandprivacywill mostwelcomedomesticsourcinginruralareas.Smallandmidsizecompanies,thatare limitedbyscaleandmanagement,aremoreinclinedtochoosedomesticsourcing. Moreover,studiesdemonstratethatsmallsizecompanieshavebeenmoreactively involvedwithR&DinUnitedStatesthantheirgiantcounterpartsandtheirpresencein ruralareaswillpositivelycontributetojobcreationandinnovation,factorsthatcanhelp inglobalcompetency. CreationofaDynamicWorkEnvironment Broadbandcancreateamoredynamicworkplacewhichinturnincreasesbusiness efficiencyandproductivity.Employeeswouldbeabletoaccesstheirfileand informationanywhere,anytime.Broadbandalsobenefitsathomeentrepreneurssuch asDomainNameBrokers,EBargainers,andEcommerceconsultants.Withthe enterprisemarketleaningheavilytowardentrepreneurialefforts,SmallandMedium Enterprise(SME)willbelocatedinresidencesandresidentialneighborhoods. Inadditiontothefactorsdiscussedabove,expansionofhighspeedInternetaccesssupports newgrowthsectorssuchasmedicine,energy,andcleantechnology: 32

31

ConscientPartners,LLC,LowerCostDomesticSourcing:ANicheOpportunityforUS,July2007,availableat http://www.itaa.org/upload/news/docs/DS_ExecSum_Final.pdf. 32 Lennett,BenjaminandMeinrath,Sascha.(2009,January)Buildinga21stCenturyBroadbandSuperhighway:A ConcreteBuildoutPlantoBringHighSpeedFibertoEveryCommunityWashington:NewAmericaFoundation.At http://www.newamerica.net/publications/policy/building_21st_century_broadband_superhighway.

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HighSpeedInternetEnablesHealthIT(HIT)management Movingfrompaperfilestoonlineelectronicrecordsmakesphysicianpatientand physicianphysiciancommunicationseasier.HITcaninparticularbehelpfultorural residentssinceitreducestheircommutetoadoctorsoffice.HITalsopreservesthe medicalrecordsagainstnaturaldisasters.Forinstance,duringthehurricaneKatrinaa considerablenumberofpatientslosttheirmedicalrecords. Moreover,giventhat80percentofthose65andolderlivewithatleastonechronic disease,andconsideringthat90percentofnursinghousesareunderstaffed,amore efficienthealthcaremanagementisneeded.HIT,whenbroadlyimplementedon promiseofubiquitousbroadband,directlybenefits80percentofourseniorcitizensby allowingforearlydiagnosisoftheirdiseases. Wirelessmedicineisexpectedtohelp5millionpatientswithAlzheimersbyconstant monitoringofvitalsigns,activities,locationandbalance),20millionwithasthma(by trackingtherelativerisk,airquality,oximetry,andpollencontent)and21millionwith diabetes. 33

Broadbandisacontributortoamoreenergyefficientfuture Soon,installingsmartpowermetersinU.S.householdswillallowhomeownersto monitorandreducetheirelectricityconsumption,whichinturnhelpstoachieveenergy savings. Oneofthewayswiringourhomesandofficespromiseslargeeconomicpayoffs, alongwithimmenseenvironmentalbenefits,isbyallowinginteractive monitoringofandmoreefficientenergyuse.Bycreatingsmartbuildingstied

33

Pleaserefertotheindexforlistofdiseasesthataretargetedwithwirelessmedicine.

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tothelocalpowergrid,asa2002DepartmentofEnergyreporthighlighted, utilitycompanieswonthavetokeepasmuchwastedreservepoweronhand, leadingtolowerpricesandlesspricevolatilitywhichwillcreateamore resilientelectricgridthatismorerobustandsecureagainstbrownouts, blackouts,andhostileattacksthelatterespeciallyattractiveinthewakeofthe 2003blackoutofmuchoftheNortheastandCanada. 34

4. FactorsAffectingBroadbandAdoption
Underserveddefinitionemphasizestheadoptionrateasanimportantcriterionindisbursement ofavailablefunds.Assessmentofissuespertainingtobroadbandadoptionisonlypossibleby studyanddevelopmentoftechnologyadoptionmodels.Increaseinhouseholdadoptioncan createtherequiredmarketdriversforexpansionoftechnologyintoruralareas. Householddiffersfromworkplaceonanumberofdimensions,suchasthecomplexityof interactionsandnegotiationsamonghouseholdmembers,differencesintypesoftasks andtheintricaciesinherentinthevariousstagesofhouseholdlife.Further,since technologyisembeddedinacontextandthecontextisanimportantaspectof understandingthetechnologyanditsuse,thehouseholdcontext,givenitstremendous growthasatargetforimplementationoftechnologies,isanimportantaspectof theorizingabouttechnology. 35 DespiteadocumentedrapidgrowthinbroadbandadoptionintheUnitedStates,animbalance stillexistsamongdifferentsegmentsoftheAmericanpublic.LarryIrving,aformerUnited StatesheadofNTIAandtechnologyadvisertotheClintonadministrationnotesthisparadoxas earlyas1995andtermsitasthedigitaldivide.Thedigitaldividecomprisesoftwofacets unequalaccesstotechnologyandunequalabilityordesiretomakeuseoftechnologies. 36

34

ProgressiveStatesNetwork,BroadbandforEconomicGrowthandEnergySavings:SmartBuildings,Energy savings(undated),http://tinyurl.com/29ngjy. 35 BrownSusan,ModelofAdoptionofTechnologyInHouseholds:ABaselineModelTestAndExtension IncorporatingHouseholdLifeCycle,MISQuarterlyVol.29No.3,pp.339426 36 USIIA,DeploymentofBroadbandtoRuralAmerica,03/04/2008

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Conductedsurveyssuggestthatthefollowingfactorsimpacthouseholddecisionstoadopt broadband: 1) ConsumerFactors a. Income:Surveyssuggestthathouseholdincomeandbroadbandadoptionare linearlyrelated.In2008,88percentofhighincomehouseholdshouseholdwith incomeexceeding$100,000utilizedbroadbandconnections.Incontrast,only41 percentoflowincomehouseholdswithannualincomeof$25,000andlesshad adoptedthetechnology.Whilebroadbandadoptionamonghighincomehouseholds isapproachingitspointofsaturation,thereisalargelowincomepopulation (significantlyoverrepresentedinruralareas)thathasyettoadoptthetechnology. b. AgeandLifeCycle:Homebroadbandadoptionisininverserelationtoincreasesin age.In2008,84percentof:GenY(i.e.,householdswiththeageoftheheadin18 24)and81percentofGenXhouseholds(i.e.,2544)hadadoptedthetechnology, whileonly43percentofseniors(65+)hadaccesstobroadbandathome.Out migrationofyoungerworkforcehasconsiderablyincreasedaverageageofrural America. c. Price:Highbroadbandpricesarethemostaffectivefactoragainstincreasesin adoption.Associetyadvancesandtechnologyevolves,broadbandpricestendto followapattern.Declineinbroadbandpricesononehandandincreaseinpricesfor

24

dialupservicesinpastyearshascontributedtomoreadoptiontothetechnology. Broadbandpenetrationexhibiteda17percentgrowthfromApril2007to2008. 37

Figure3.U.S.annualgrowthinhomebroadbandadoption

Figure4.Increaseinbroadbandadoptionvs.dialup 38

37

AccordingtothePewInternet&AmericanLifeProjectsurveysof2008broadbandusersreportedanaverage monthlybillof$34.50inApril2008,$1.5downfromthatinDecember2005.Thisis4percentdeclineinathree yearsspan.Bycontrast,thedialupservicesfaceda9percentincreasefrom$18to19.7$amonthinthesimilar timeframe. 38 Pewinternationalavailableatwww.pewInternet.org/~/media//Files/Reports/2008/PIP_Broadband_2008.pdf.

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2) TechnologyandProvider a. AccesstoBackboneInfrastructures:Mostruralandexurbanareasarelocated within70to200milesfromthebackboneinfrastructures.Middlemilelines requiremassiveamountofinvestmentandareconsideredtobeimportant contributingfactorinbothcostsforserviceprovidersandpricesforconsumers. Thus,eveninbestcasescenario,whentwoareasareatanidenticalpopulation density,theserviceswillbemoreexpensiveaswemovefartherfrombackbone. Theproblemwithaccesstobackboneisanothercontributortouneconomicrural broadband. b. PolicyandRegulations:Policymakerscanplayimportantroleinexpansionof technologiesbyeitherfundingbasicresearchorbypassinglawsthataddressthe needsfortechnologicalgrowth.Duetostrongpresenceofentrepreneursand R&DsectorsintheUnitedStates,policiescandramaticallyinfluencereforms.For instance,lawssuchasTheElectrificationActof1934orTheTelecommunications Actof1996bothhadenormousimpactinexpansionandgrowthoftechnologies byattractingprivateinvestments.Similarly,andasacounterexample,both underutilizationofspectrumandlackofspectrummanagementpolicies,haveled tolimitedinvestmentincommercializationofsmarttransceiversinrecentyears. Policiesthatencouragecompetitionorincreaseindemand,canpositivelyimpact broadbandadoptionbyeitherreducingthepricesorattractingmorefundsin growingsectors.

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5. WhatistheSolution:PolicyRecommendations
Thefollowingsectionfocusesonpoliciesthatcanhelpmakemoreaffordablebroadband servicesavailable.Recommendationsondatacollectionandtechnologydevelopmentsapplyto bothurbanandruralAmerica;demandincreasepoliciesapplymoretoruralareas.

DataCollection:
Asolutiontothecurrentbarrieragainstthebroadbandadoptionandavailabilitywillnotbe possibleunlessthereisacomprehensive,universalbroadbandmapavailabletotheFCC. VirginiaTechseCorridors 39 hasproventobeaneffectiveapproachinpreparingabroadband mapinashorttimeperiod.TheFCCshouldsetupanewwebsiteformonitoringbroadband adoptionandspeedbycollectingandanalyzingdatafromonlinesurveys.TheFCCshouldmake severalpublicannouncementsinlocalradio,TVandnewspaperstoinformthepublicaboutits mission.Eachtimeausercarriesthespeedtest,theirlocationwillberecordedonthemap. Usingthisapproach,thefederalgovernmentacquiresacomplete,precisebroadband penetrationmapinashorttime.

Technology:

SpectrumManagement

Availabilityofspectrumisvitaltoexistenceofwirelessbroadband.TheFCCshouldmakemore spectrumavailableforsharing.Itshouldalsodevelopregulatorypoliciestoensureefficientuse ofavailablespectrum.

39

VirginiaTechstartedaprogram,eCorridor,toenhancedataavailabilityonstatewidebroadbandconnections, availableathttp://www.ecorridors.vt.edu/

27

Thespectrumshouldbequasilicensedwithregulatoryfeesfromprimarylicenseholdertothe secondaryusers. 40 TheFCCshouldgrantprimarylicensesbyasealedfirstpriceauction.Sealed firstpriceauctionensuresthatlicensesgotothebidderthatgainsthemostadvantagesfrom auctionedspectrum.

Research&Development

Broadbandisnotthesolutiontoonebigproblem,itisapartialsolutiontomanyproblems. IncentivesthatfacilitateleverageofbroadbandinfrastructuresforInternetbasedapplications canpositivelyimproveuniversalexpansionofservices.R&Dtaxcreditscanplayanimportant roleinensuringthattheUnitedStatesremainsattractivetoglobalcompanies.Providingmore generousR&DfinancialincentivescanbetheUnitedStatesmosteffectivestrategytocompete withtheotherdevelopednationsincludingCanada,SpainandFrance. 41 Asof2004,theUnited StatesrankinR&Dtaxcreditgenerositywas17thamongOECDnations. 42 AllowingourR&Dto moveoffshoreduetopoortaxcreditswillhaveseriousconsequencestofutureofinnovationin theUnitedStates. Congressshouldprovide50percenttaxcreditsinunderservedand100percenttaxcreditsin unservedregionsfordevelopinglastmileinfrastructuresinruralareasinthenext10yearsor bythetimetheymeetthebroadbanddefinitionfromsection2,whicheverissooner.

40 41

Refertotheappendixfordiscussionondifferentspectrummanagementpolicies. Atkinson,TheResearchandExperimentationTaxCredit:ACriticalPolicyToolforBoostingResearchand EnhancingU.S.EconomicCompetitiveness,September4,2006,availableat http://www.itif.org/files/R&DTaxCredit.pdf. 42 JacekWarda,TaxTreatmentofInvestmentinIntellectualAssets:AnInternationalComparison, OECDScience,TechnologyandIndustryWorkingPapers4(Paris:OECD,2006).

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Congressshouldalsoeliminatetaxesinresearchanddevelopmentsforcompaniesthatinvestin wirelessdevicesandnetworkdesignsinruralareas.

Supply:
Broadbandisaninfrastructure.Althoughinfrastructurecompaniesareoftenmonopoliesand usuallyhavemarketpower,themostimportantchallengeininfrastructurepolicyis, paradoxically,notpreventingcompaniesfromchargingmorethancosts,butratherensuring themthattheywillbeallowedtorecovertheircosts.Asdiscussedinsectionthree,middlemile infrastructuresarevitaltoexpansionofbroadbandservicestoruralareas.Thissection proposespoliciesthatwillreducecostsby1)partnershipbetweenprivatecompaniesand governmentagencies;and2)promotingcompetitioninmiddlemileinfrastructures. Middlemileinfrastructuresareessentialtothesuccessofbroadbandprojects.Giventhe limitedgovernmentfunding,solutiontolackofmiddlemileinfrastructureshouldcomeintwo phases: Preparearuralbroadbanddevelopmentmap

Theappropriatedfundsarenotadequatetoeliminatetheneedformiddlemileinfrastructures inasinglephaseeverywhereintheUnitedStates.Thus,RUSandNTIAshouldprioritizeas wheretoextendinfrastructuresfirst.Agenciesshouldformacommitteetoundertake feasibilitystudiesthatconsidertheemergingmarketforces,potentialfuturerural developmentsandtheirneedforhighspeedInternetinthenextdecade.Thecommittee shouldidentifyobjectivesinexpansionofbroadbandservices,anddefinecriteriaandneedin addressingthoseobjectives.Forinstance,ifthegoalisdevelopmentofhighspeedapplications

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suchasanationwidehealthITnetwork, 43 priorityshouldbegiventoprojectsthatcovermore populationthanlandmasswithadequatespeed;whereas,ifthegoalisnationwideavailability ofbasicservices,higherspeedshouldbesacrificedformoreaccess. Upondefiningthegoals,thecommitteeshoulddividethemiddlemileprojectsintwo categories:1)fiberbased;and2)wireless. Expensive,highcapacityfiberlinksshouldconnectbackbonestothedevelopingruralregions withpotentialforextensiveeconomicgrowth. Fiberlinkscannotsupplyareasthatfacerapiddeclineinpopulation.Provisioninthoseareas shouldtakeplacebywirelesstechnologies.Commissionshouldallocate20percentofmiddle milemoneytowirelessprojects.Accesstospectrumisanotherconcerntosuccessofwireless middlemiles.FCCshouldallocatespectrumin700MHzrange,previouslyusedforanalogTV, forexclusivemiddlemilebroadbanduse.Lowertheoperatingfrequency,longerthewireless signaltravels. Improvethemiddlemileinfrastructures,throughcooperationwiththe DepartmentofTransportation Majormiddlemilenetworksindevelopingruralareasshouldbeconstructedusingfiberoptic links.Recentstudiesfoundthatmorethan60percentofthecostinimplementingfiberlinkis duetodiggingfiberintoground.Withthe2009Omnibustransportationbillinplace,the countrystransportationinfrastructureswillgothroughaseriesofmaintenance,expansion,and improvementsinthenextfiveyears.TheHighwayActprovidesmiddlemileprovidersaunique

43

Refertotheappendixforinformationonbandwidthrequirementsfordifferentapplications.

30

opportunitytolayhighcapacity,fiberlinksalongallfederalhighways.Thenationalhighway systemcomprisesof163,000milesofroadwaywith90percentofU.S.populationlivingwithin 5milesoftheseroads. 44 Sharingresourceshelpscompaniestoreducethecostoftheirfiber links.CollaborationwiththeDepartmentofTransportationiskeytoincreasedmiddlemile coverage.NTIAandRUSshouldutilizetheproposedfeasibilitystudy(above)toidentifythe targetfiberpathways.Afterdecidingonareasfordevelopment,agenciesshouldsigncontracts withtheDepartmentofTransportationtoimplementaccessiblepipesforaccommodatingfiber bundlesunderhighwaysastheyrenewtheroads. Existenceofpipelineswillenablegradualupgradeandexpansionofmiddlemilenetworks. Whilefiberbundlesforareaswithhigherprioritycanberunthroughthepipesastheyare beingconstructed,areaswithlessprioritycanbedevelopedovertimeandasmorefunds becomeavailable. Figure5belowdemonstrateshowcollaborationwiththeDepartmentofTransportationcan extendnetworkstothemostremotecornersoftheUnitedStates.

44 Lennett,BenjaminandMeinrath,Sascha.(2009,January)Buildinga21stCenturyBroadbandSuperhighway:A
ConcreteBuildoutPlantoBringHighSpeedFibertoEveryCommunity Washington:NewAmericaFoundation.At http://www.newamerica.net/publications/policy/building_21st_century_broadband_superhighway.

31

Figure5.ComparisonofU.S.populationdensityandU.S.nationalhighwaysystem

Adoption:
Broadbandadoptionisdrivenbyincreaseinneedandmarketforces.Publiceducationcreates therequiredmarketdriverswhichinturnattractlocalproviderstofacilitatehigherqualityof servicesatreducedcosts. BridgetheGaptoDigitalIlliteracy o FundSchoolsandcomeupwithincentivestoprovidechildrenwithcomputers atschools Thissectionfocusesonasmall,yetimportantsegmentofU.S.householdswithchildrenat home.AsmentionedinSection5factorssuchasincome,age,generaleducation,priceand accesstocomputerimpactbroadbandadoptionbyhomeowners.Whilethesefactorsdiffer largelyinscope,theyallareconsequencesofacommondriver,need.Schoolgoingchildren influencehouseholddecisionmakingprocess.ChildrenoftodayrelyonInternetapplications suchasEmail,onlinelearning,andeducationaltoolstoexcel. Educativeprogramsplayimportantroleinincreasingdemand.Congressshouldmakemore fundsavailableforpubliclibraries,andpublicschoolstoadoptcomputers.
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CongressshouldfundtheLibraryofCongresstodigitizealargernumberofitsprintcapacity. ThereshouldbeasimilarfundingfortheSmithsonianmuseumstooffervirtualtours.Such programsprovideschoolteachersindisadvantagedareaswithhandfulofresourcestoeducate children,whileboostingdemandformoreInternetpenetration. o ExtendtheLifelongLearningTaxCredittoCoverAccesstoBroadband: 45 Congressshouldadoptpoliciesthattargetadultstudents.Educationisoneofthekeysectors thatcanbenefitfromhighspeedInternet.ThoughhighInternetpricesremaintobeanobstacle againstInternettakeup,policiesthataregearedtowardsdistancelearningcanboostadoption. Governmentshouldprovidetaxcredittocoveraccesstobroadbandforstudentswho participateinonlinecoursesthatqualifyforcollegelevelcredits.

45

Atkinson,etal.UnleashingthePotentialoftheHighSpeedInternet,September2002,at http://www.ppionline.org/documents/Broadband_0902.pdf,p.28.

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6. Appendix

i.

NeedforSpectrumManagement

Inrecentyears,wireless,duetoitslowimplementationcostandflexibilityincoverage,has attractedalotofattentionsamongexperts.Thoughcomplementarytotheexistingbroadband technologies,wirelessinruralandremoteareascanbeviewedastheonlyeconomicoption available.Scarcityinfrequencybandshasmadespectrum 46 managementacrucialpartof communications.Onceafrequencybandbecomesavailable,therearethreemajoroptionsin useofspectrum: 47 1) Thesimplestapproachforgovernmentistosplitandlicensetheavailablespectruminto smallernonoverlappingfrequencybands.Licensesthenaresoldamongindividual companieswhoaregivenexclusiverightstoutilizetheirlicensedband.Government licensingreducesneedforcoordinationtoalargeextent.Incontrast,itisspectrally inefficientsincethereisapotentialforbandtoremainunusedforalongperiodoftime. Licensedbandcomprisesover95percentofpublicairwaves. 48 2) Second,isuseofunlicensedspectrumwhereanydeviceisallowedtooperate. Unlicensedbandsrequireregulatoryprotocolstoavoidmutualinterference 49 between devices.Inadditiontoenablingcommunicationsbetweenlowpowerdevices,this

46 47

Spectrumistherangeoffrequenciesoverwhichwirelesstransmissiontakesplace PehaJon,SpectrumManagementPolicyOptions,1998,availableat http://www.comsoc.org/livepubs/surveys/public/4q98issue/pdf/Peha.pdf. 48 NewAmericaFoundation,TheCitizensGuidetotheAirwaves:AgraphicdepictionoftheUseandmisuseof theradiofrequencyspectrum,2003. 49 Inwirelesscommunications,unlikewiredcommunications,thereisnoexactpathforthesignaltransmission. Wirelessdevicestransmitdataoverfrequencybandsinagivengeographicalregion.Interferenceoccurswhentwo devicestransmitsignalsoverthesamechannel(i.e.frequencyband),inasameregionatthesametime.

34

approachallowsspectrumsharingbetweenusers.Shareofunlicensedspectrumwill increasespectralefficiencybyminimizingtheidletimeofagivenband.Inthetimeone deviceisnotoperating,otherscanutilizethespectrumtotransmittheirdata.Theother advantagetounlicensedspectrumiseliminationofhightransactioncostsinlicense allocation.Unlicensedusewillalsospurcreativityandinnovation.Manyapplications suchascordlessphonesandWiFiuseunlicensedspectrum.Thoughappealing,there arecertaincriticismstoabundanceofunlicensedbands.Duetothelackofmarket forcesindrivingusage,thisschemecanleadtooccupationofvaluablefrequencybands bylessusefulapplications. 3) Finally,adynamicspectrumsharing(DSS)schemeproposedbyTheSpectrumPolicy TaskForces(SPTF)UnlicensedDevicesandExperimentalLicensesWorkingGroupcan supportincreaseddemandtowirelesscommunications.DSS,acombinationoflicensed andunlicenseduse,allowstheprimarylicenseholderstosharetheirspectrumwith unlicenseddevices,whileidle.Inanidealcasetherecanbeanagreementbetween primarylicenseholderandsecondaryusersonprices.Thisononehandwillgivelicense holdersincentivestoallowtheirspectrumtobeusedbyunlicenseddevices,andonthe otherhandwillensuremoreusefulapplicationsbyshiftingthecontroloverapplications fromgovernmentscentralplanningtoafreemarketbasedutilization. In2002,JohnWilliamsofFCCdocumentedacompleteaccountingofspectrumavailablein300 to3000MHzrange.Traditionally,mostspectrumusewaseither,broadcasting,asimplex service,orfullduplexrealtimecommunications. 50 However,theemergingspectrumusageis

50

MikeMarcus,NewApproachestoPrivateSectorSharingofFederalGovernmentSpectrum

35

basedonpacketizedinformationtrafficflow. 51 Thisschemeishighlyfavoredduetoits promisestoapplicationssuchasmobileInternetandwirelessAudioVideotransmissions. Spectrummanagementpoliciesarenecessaryinprovidingtheappropriatebasisforfuture wirelesscommunications.Currently,aconsiderableportionofthesespectrumsare underutilized.AstudybyMcHenryfoundthattheaveragetotalspectrumuseinsixlocations alongtheeastcoasthasbeenlessthan10percentin2004.StudyinNewYorkwasdoneduring the2004nationalconventionandaccountedforonly13.1percentuseoftotalspectrum available. 52 Keytofutureapplicationsliesintransitionfromconventionalpassivespectrumutility,toa moreactive,dynamicusethatcanminimizetheidlespectrum.Sharingparticularly,have promisesinimprovingtheefficiencyoftheavailablespectrums.Byemployingappropriate spectrummanagementschemes,itispossibletosignificantlyimprovequalityofwireless technologies.Thefuturesystems,shouldworkincollaborationtosupportthehighspeed applications.Policiesthatenhanceandregulatecooperationbetweenprimaryandsecondary systemsshouldbewelcomemore.
Category FederalGovernment NonFederalGovernment Shared InTransitionfromFederaltoNon Federal UnlicensedandManagedbyFCC Fraction 22.4percent 34.7percent 34.7percent 2.5percent 5.6percent

51 52

Table3.Compositionofspectrumavailability 53
See31. McHenry,Mark(2004).SpectrumOccupancyMeasurements,availableat www.sharedspectrum.com/measurements/.

53

Source:FCCWilliams,TakenfromMarcusPaperatwww.sharedspectrum.com/measurements/. 36

ii.

AvailableMiddleMileOptions

Thenextgenerationsofresidentialandbusinessapplicationsfaceeverincreasingneedfor morebandwidth.ApplicationssuchasHDTVwillrequireupto20MbpsperTVset.Needfor higherspeedandscarcityinbandwidthhasforcedbackboneproviderstoexaminealternatives solutionssuchasfiberopticlinks,wirelesslinksandBroadbandoverPowerLine(BPL),and satellitelinks. OpticalFibers Opticallinksofferalmostunlimitedamountofbandwidthandspeed.Fibersareconsideredas thebestchoiceforbackboneinfrastructuresinareaswherethereisamassiveamountofspeed required.Prohibitivelyhighdeploymentcost,limitsubiquitoususeoffiberlinks. Wireless Wirelesssignalsutilizetheradiofrequenciestotransmitthedataovertheair.Thephysicsof electromagneticfrequencyputstwoconstraintsonthetransmission.Thehigherthefrequency is,thehigherthedatarateandhencethebandwidthwillbe.Ontheotherhand,increasein frequencyisaccompaniedwithdegradationinrangeandpenetration.Forexample,a700MHz signaltravelsandpenetratesfartherthana2.4GHzcounterpart.Onethingthatcanintroduce changestotheserulesispower.FCCclassifiestheradiospectruminlicensedandunlicensed bands.Devicescantransmitatmuchhigherpowerinlicensedfrequencywhichallowsthemto penetratefurther.Forinstance,WiFienableddevices,microwaveovenandcordlessphonesall

37

operateinunlicensed2.4GHzband,whiletheconventionalanalogTVusedtotransmitinthe 700MHzwhichislicensed. Technologycanalsoimpactdatarate.Manywirelessbackbonesolutionsutilizeunlicensed60 GHzandlicensed80GHzbandstooperate.60GHzbandiscapableoftransmittingupto1Gbps ofdatafor3Km,while80GHzbandspotentiallycantransmitupto10Gbpsfor5Km. WirelessbackbonescanbedeployedbyeitherusingPointtoMultiPointaccessmodel(PTMP) orPointtoPoint(PTP)directmicrowavelink.ThePTMPmodelisbestsuitedforlower frequencybandsandcaneasilybeimplementedinruralareaswheredistancesaresignificant andthereisanabundanceoffrequencyavailableinthosebands.PTPmodelfitstheurbanand suburbanareasthebest.Itutilizeshigherfrequencybandsandtransmitsdatawithavery narrowbeamwidthathighspeedandinashorterrange,thusreducingthechancesfor interference.Itisalsoidealforlinkingmultipleaccesspointsinruralregionswhereadirectlink isrequired.Wirelessisanidealoption,forruralareaswherethereisnotmuchofdemandfor bandwidth. BroadbandoverPowerLine(BPL) BPL,duetoabsenceofinfrastructurecosts,isthecheapestoptionavailable.Technologyuses theconventional60HzpowerlinestotransmitRFsignalsacrossfromthebackbone infrastructuretohouses.Thoughinexpensive,thistransmissiontechnologyissubjectto significantamountofnoisethatisgeneratedbecauseoftransientsintheelectricitylines.To remedydegradationinqualityofsignal,Internetprovidersneedtousemultiplerepeaters whichinturncandramaticallyreducethebandwidth.Thus,thisschemewillbeleastthe
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favoritealternativeforbackbone.However,itcansatisfactorilyservesomeoflowdatarate applicationssuchassmartgrids.ItisalsoattractivefortransmissionofInternetbetween housesinaccesspoints. SatelliteLinks Satellitelinkshavethepotentialtoreacheverycorneroftheearth.However,satellitedoesnot offeratruebroadband.Mostofcurrentsatellitetransceiversofferdownstreamdata transmissionviasatellite,whiletheupstreamtransmissionhappensthroughatraditionaldial upconnection.Duplexsystemsthoughavailable,facescarcityinbandwidthandlimitationin capacity.Theotherfactorthatmakessatellitetechnologiesunattractive,particularlyfor applicationssuchasVoIPthatneedinstantaneouscommunication,iswhatintechnicalcontext isreferredtoaslatency.GeneralAccountabilityOffice(GAO)explains, SatellitetechnologycanprovideahighspeedInternetservicethroughoutmostofthe UnitedStates.However,themosteconomicalpackageofsatellitebroadbandservice generallyoffers,atthistime,upstreamspeedsoflessthan200kilobitspersecond,and thereforethisservicedoesnotnecessarilymeetFCCsdefinitionofadvanced telecommunicationsservices,whileitdoesmeetFCCsdefinitionofhighspeedservice. Despitethenearuniversalcoverageofsatelliteservice,consumersneedaclearviewof thesouthernskytobeabletoreceivetransmissionsfromthesatellites.Additionally, transmissionviasatelliteintroducesaslightdelay,whichcausescertainapplications, suchasVoIP(i.e.,telephoneserviceovertheInternet),andcertaincomputergamingto beillsuitedforuseoversatellitebroadband. 54 Thus,satelliteremainsasanoptioninareaswherethereisnoothermeantoreachtheusers suchassomeareasinAlaskaandMontana.

54 U.S. Government Accountability Office, Broadband Deployment Is Extensive throughout the United States, but It Is Difficult to Assess the Extent of Deployment Gaps in Rural Areas (May 2006), www.tinyurl.com/y4f4t3.

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iii.

ApplicationTable

Upstreamanddownstream speed
500kbps1Mbps 1Mbps5Mbps 5Mbps10Mbps 10Mbps100Mbps 100Mbps1Gbps 1Gbps10Gbps

Applications
VoIP SMS BasicEmail WebBrowsing Email(LargeAttachments) RemoteSurveillance IPTVSD(13Channels) Telecommuting Filesharing(Large) IPTVSD(multipleChannels) SwitchedDigitalVideo VideoonDemand BroadcastSDVideo VideoStreaming(23channels) Telemedicine EducationalServices BroadcastVideoSDandsomeHDIPTVHD Gaming(complex) HDtelemedicine Multipleeducationalservice BroadcastVideofullHD FullIPTVchannelsupport Researchapplications Remotesupercomputing Livecinemastreaming

WebBrowsing StreamingVideo LowQualityVideo FileSharing(small/medium) Telecommuting(ordinary) Digitalbroadcastvideo(1channel) Streamingmusic HDvideodownloading Lowdefinitiontelepresencegaming Medicalfilesharing(basic) RemoteDiagnosis(basic) RemoteEducation BuildingControl Highqualitytelepresence HDsurveillance smartbuildingcontrol Telecommuting(highqualityvideo) VideoonDemandHD Gaming(immersion) Remoteserverservicesfor telecommuting Telesurgery Terabytedatatransfer

Table4.HighspeedInternetapplications 55 55 Source:CapturingpromiseofbroadbandforNorthCarolina,June2008,availableatwww.e nc.org/pdf/Broadband_report_es_composite.pdf. 40

 AbouttheAuthor

MiladAlemohammad IEEEUSAWISEInternandStudentofElectricalandComputerEngineering MiladAlemohammadisaB.S./M.S.studentinElectricalandComputerEngineeringatDrexel University,Philadelphia.Miladsareasofinterestincludetelecommunications,microwave,and photonicsengineering.HisresearchatDrexelinvolvesopticalgenerationofrapidlytunable millimeterwavesubcarrierswherethetuningrangeexceeds100GHz. Duringthesummerof2009,heservedIEEEUSAasaWISEintern,wherehesupportedpolicies onexpansionofmoreaffordablebroadbandservicestoruralAmerica. MiladismemberofIEEE,andtheDrexelUniversityPennoniHonorsCollege.Healsoservesas treasurerofthelocalchapterofEtaKappaNu,theelectricalandcomputerengineeringhonor society. Contacthimatm.alemohammad@ieee.org

41