Broadband for all

As the FCC proposes significant changes to the Universal Service Fund, it will consider for the first time the notion of applying USF to broadband deployment — which I'm sure will bring no end to the political and philosophical debate over what extent rural broadband should be subsidized. It's not a lifeline service, but for many of us, it's starting to resemble one.

We're often warned about the dangers of a digital divide, but it's also true that something like a quarter of U.S. households don't have PCs, and some portion of them are in rural America. So it's not exactly fair to compare high-speed Internet access to things like electricity or voice service — things we feel a stronger obligation to provide to rural dwellers.

Competition among service providers isn't enough to bring broadband to all rural areas, but what about competition among towns, counties and states? Isn't it in their more immediate interests to help fund rural broadband, perhaps in partnership with the private sector?

Moreover, wireless and satellite broadband providers are making technological strides that could change the realities of rural broadband coverage relatively soon. In three years, for example, ViaSat will launch a satellite aimed at providing wholesale broadband at speeds of 2 Mb/s and 10 Mb/s downstream along the West Coast and everywhere east of the Mississippi River. If all goes well, it will launch another satellite and expand that coverage. When that first satellite goes up in 2011, I'll bet the FCC, if it opts to create a USF for broadband, will still be tinkering with how to implement it.

Still, in terms of typical government spending, there are a lot worse ways to burn money. In a recent blog entry lamenting the Bush administration's plan to stimulate the economy with $146 billion in rebate handouts, Andrew Schmitt, general partner with Nyquist Capital, pointed out that for just a few billion more, the government probably could deploy fiber to every home in America and create a more lasting effect on our economy.