Bandwidth shortage? What bandwidth shortage?

Television Broadcast magazine reports that the U.S. National Telecommunications and Information Administration (NTIA) released a report today that identifies 2,200MHz of potential available over-the-air bandwidth for the National Broadband Plan. The Obama Administration and Federal Communications Commission are trying to free 500MHz of bandwidth for broadband services, and they're doing so by moving existing services such as wireless microphones, authorizing new unlicensed services to use the "white space" between television channel allocations, and convincing television broadcasters to voluntarily relinquish portions of their licensed channels for broadband use. Every action so far has resulted in a hail of criticism from the affected parties.

The NTIA report identified 155MHz that can be opened up for commercial broadband use within five years, and another 2.1GHz that could be available within ten years. The NTIA recommends taking 120MHz from television broadcasters in the VHF and UHF bands, another 160MHz from other existing commercial services, and 500MHz from bandwidth currently used for C-band and ship-based satellite receivers. 640MHz would come from bandwidth currently reserved strictly for Federal use, and another 814MHz would come from bandwidth currently shared by the U.S. Government and private users.

Even if the NTIA is very optimistic about the amount of bandwidth that can be made available within ten years, there's clearly more than enough bandwidth available to meet the 500MHz goal, even without getting television broadcasters involved. Given that it's increasingly looking as though the Obama Administration only has two more years, time is running out for the FCC to implement its vision of a broadband future. By pursuing sources other than television broadcasters, the FCC could dramatically lessen industry resistance to its broadband plans.

Reed Hundt did something "naughty" with the HDTV Transition

You may remember Reed Hundt. He was the Chairman of the FCC under Bill Clinton, at the time that agency was planning for the transition to HDTV. The original plan was to implement HDTV in the same way as Japan had done it--one resolution, one refresh rate, one single standard. The FCC instead mandated a convoluted standard that required some 17 combinations of resolutions and refresh rates to be supported; even what we now consider Standard Definition was included in the HD standard, in order to support data applications over broadcast bandwidth. Chairman Hundt invited Microsoft into the process, and Microsoft demanded a series of changes to the standard in order to support its plans. What was originally a clean, straightforward and reasonably inexpensive upgrade became complex and expensive for everyone--broadcasters, cable and satellite operators, and consumers.

Earlier this month, at the Columbia Business School, Mr. Hundt gave a speech where he admitted that he and his associates deliberately logjammed the HDTV transition with the intention of killing it entirely. Here's a direct quote: "This is a little naughty...we delayed the transition to HDTV, and fought a big battle against the whole idea but we lost." If Mr. Hundt and his associates were so dead-set against HDTV, why didn't they fight it out in the open instead of waging a passive-aggressive war of changing the specifications and moving the goalposts? If he and his associates had been honest, we wouldn't need this National Broadband Plan--there would be plenty of bandwidth for broadcasters and for broadband wireless services. Instead, we've got the world's most expensive and convoluted HDTV system, many consumers still aren't getting true HD, and tons of bandwidth is lying fallow in subchannels mandated by the FCC.

We have to dramatically increase the availability of broadband access at prices that U.S. consumers can afford. As I've written previously, the National Broadband Plan says precious little about how it's going to lower costs to consumers, and puts few demands on the incumbent telephone and cable providers. It's biased to take its "pound of flesh" from broadcasters. Is what we're seeing a real attempt to make broadband available to everyone at an affordable price, or is it merely the continuation of Mr. Hundt's now almost 20-year-long war against broadcasters?

The most important thing left out of the National Broadband Plan

The Executive Summary of the National Broadband Plan was released today by the FCC (PDF link), and what's been proposed is largely in line with what was leaked in the last few weeks. The FCC wants to get affordable broadband service with 100 Mbps download and 50 Mbps upload speeds into at least 100 million homes by the end of this decade. The Plan proposes lots of ways to get there, from subsidizing expansion of wired Internet connections in rural communities to reallocating 500MHz of wireless bandwidth to broadband service. However, for all the platitudes in the plan about lowering costs and making broadband service more affordable, there's precious little (at least in the executive summary) proposed to actually back up that intent.

A few years ago, when I was an industry analyst covering the IPTV market, I regularly traveled to Europe. My visits to France were particularly enlightening. There were multiple service providers offering IPTV, high-speed Internet and local & long distance phone service at the equivalent of around $30 a month; less than one-third the price of the $99 triple-play deals offered in the U.S., with similar or better channel selections and Internet speeds. As you can imagine, the French services were wildly popular.

So why was triple-play service so much less expensive in France (and so much better)? The French Government required France Telecom to make its lines available to competitors at wholesale prices. Far from slowing down the growth of broadband access, the French Government's decision caused usage of broadband services to explode for everyone, including France Telecom.

Telephone companies in the U.S. were once required to provide their lines available to competitors on a wholesale basis, and the U.S. had a healthy competitive market for DSL services. Cable operators, on the other hand, were never required to make their networks available to competitors. In the Clinton Administration, the same team that drafted the National Broadband Plan allowed telephone companies to stop making their networks available to competitors as part of the Telecommunications Act of 1996, ostensibly to encourage phone companies to make bigger investments in their networks and further the growth of broadband.

We saw what happened: Most of the phone companies that were originally part of AT&T got consolidated back into AT&T. As a practical matter, most U.S. households have a choice of broadband service from two suppliers--the incumbent telephone company and cable operator. There's no meaningful price competition. U.S. households pay much more for much slower Internet service than do households in many other countries.

I'm not saying that the National Broadband Plan doesn't have merit, or that it shouldn't be taken seriously. What I am saying is that the thing that's most likely to increase competition, lower costs and make more broadband access available is to open up the existing cable and telecom networks for wholesale availability. That idea is nowhere to be found in the National Broadband Plan, and there's no surprise why.

Update, March 22, 2010: The Berkman Center for Internet & Society at Harvard University did an extensive study of broadband in the U.S. and the rest of the world for the FCC, and released the report, "Next Generation Connectivity" in February, 2010. The report speaks to the points that I made in this blog post, plus much more. Click here to access the entire study, or visit this article at the New York Times for a summary of the relevant points.