Obama Order Ties Broadband Expansion to Infrastructure

President Barack Obama signed an executive order June 14 aiming to expand internet access to underserved areas by making broadband expansion cheaper and easier on federal property. Government agencies that manage these federal assets -- including the country’s roadways and more than 10,000 buildings -- will adopt a uniform approach to allow broadband companies to conduct rollouts around the United States.

Too many Americans lack access to even basic internet service and the move may boost government efforts to encourage companies to expand high speed internet service to underserved areas. The National Broadband Plan and subsequent reports from the Federal Communications Commission have highlighted that about one-third of Americans do not subscribe to broadband internet service. The U.S. ranked 15th among Organization for Economic Cooperation and Development countries with 68.2 percent of households possessing access to broadband, according to 2011 data. Access to these networks provides businesses, consumers, and organizations the ability to connect and thrive in the internet economy, creating jobs and new opportunities in the process.

Why connect deployments to federal properties? The U.S. Departments of Agriculture and Commerce were allocated $7.2 billion in stimulus funds to expand broadband to underserved areas. Almost four years on, USDA has only paid out about $648 million of its $2.23 billion share of stimulus dollars devoted to the “Distance Learning, Telemedicine, and Broadband Program,” according to data reported on recovery.gov.

Congress noticed the lag and demanded answers from the agency about the delay, requiring that misspent or fraudulent contracts be returned to the U.S. Treasury. The problem, however, wasn’t federal government mismanagement necessarily, rather the process of bidding and awarding contracts and the seasonal nature of construction, facing build-out challenges in the winter months.

The uniform approach may increase incentives for service providers to reach new customers, literally breaking ground for projects that would otherwise go unexecuted. The President’s announcement is a promising indicator of the administration’s willingness to cut through red tape and make good on promises to improve broadband access across the United States.

June 13 Midweek Policy Update

This week in Washington: Cybersecurity legislation may move forward in the Senate, ICANN releases a list of proposed generic top-level domains, the United States Patent Office promotes clean energy partnerships.

Cybersecurity

Senate Majority Leader Harry Reid put his colleagues “on notice” June 10, calling on democrats and republicans to work together to pass cybersecurity legislation that has stalled in previous Senate sessions. The bill faces stern resistance from many technology-focused groups concerned about its impact on privacy.

Open Data

Representative Darrell Issa announced on June 10 the OpenGov Foundation at the Personal Democracy Forum in New York City. OpenGov would allow citizens to actively engage in the policy-writing process through open, web-based technology. Issa is looking for developers to build the tool.

Patent

The USPTO held a meeting of clean technology stakeholders in an effort to improve and expand its clean technology program. Issues discussed included the importance of regional accelerators and an update on cleantech patents.

Spectrum

The FCC holds an open meeting June 13 in which the commissioners will consider moves to make more efficient use of high frequency spectrum for a nationwide interoperable public safety network.

DNS

Also on June 13, the International Corporation for Assigned Names and Numbers (ICANN) holds a press conference unveiling the generic top-level domains applied for in the organization’s expansion program. The application window for the new domains -- which could include .lol and .nyc -- closed May 30. A release from the organization reports that more than 1,900 applications were received.

Midweek Policy Roundup

Immigration

Senators Jerry Moran, Mark Warner, Marco Rubio, and Chris Coons introduced Startup Act 2.0 on May 22, building on measures introduced in December 2011 that create more visas for immigrants with advanced degrees in STEM fields, among other critical reforms for startups. Engine’s coverage here.

Privacy

The Federal Trade Commission announced the final agenda for a May 30 workshop focused on privacy disclosures for advertising and social media on mobile devices. The workshop, titled “In Short: Advertising & Privacy Disclosures in a Digital World,” will include participants from companies such as Facebook, Groupon, and TRUSTe. 

The FTC also announced the hiring of Paul Ohm, an associate professor at the University of Colorado, to serve as senior policy advisor for consumer protection and competition issues in the agency’s Office of Policy Planning. Mr. Ohm specializes in information privacy, computer crime law, intellectual property and criminal procedure, according to his personal website. 

Spectrum

The Federal Communications Commission held a workshop on channel sharing May 22. Channel sharing is an approach to broadcasting where two stations use the same broadcast infrastructure and television channel. This may maximize the amount of spectrum available in new wireless auctions. The commission will also consider a report and order on plans to ease the transition from 2G to more advanced technologies at its open hearing May 24. 

Cybersecurity

On May 21, Senator Ron Wyden gave a speech on the Senate floor opposing any cybersecurity legislation that would limit Americans’ privacy. The speech came as the Senate is said to be considering new cybersecurity legislation. Watch the speech here. 

Midweek Policy Highlights

This week in Washington: the FTC goes deeper on privacy, Facebook amends its SEC filing to account for potential regulatory review, and immigration and spectrum remain hot topics.

Finance

Facebook amended its S-1 filing with the Securities and Exchange Commission ahead of its initial public offering May 15. The filing extended the expected closure date of the $1 billion Instragram purchase from the second quarter of 2012 to 2012 generally. The move could signal deeper scrutiny by regulators on the competitive impact of the deal. Currently, the transaction is in a procedural 30-day review under the Hart-Scott-Rodino Act premerger notification program. Engine will continue to monitor the review and its potential impact on future startup acquisitions.

Privacy

Associate director of the Federal Trade Commission’s division of privacy and identity protection Maneesha Mithal spoke at a Congressional Internet Caucus event on Monday about the agency’s recent report on privacy. She highlighted recent settlements with social networks including MySpace that involved companies’ adherence to their privacy policies.

Edward Felton, the agency’s chief technologist on leave from Princeton University’s Center for Information and Technology Policy, also blogged this week on the technical details of recent moves by the government to address privacy on social media platforms.

Immigration

Engine blogged earlier this week on moves by the Department of Homeland Security and Congress that may help startups gain access to more highly-skilled immigrant workers. Senator John Cornyn is said to be introducing a bill that would boost the number of visas available to immigrants with graduate degrees in science, technology, engineering, and mathematics fields.

Spectrum

Federal Communications Commission chairman Julius Genachowski is slated to give a speech May 17 at 10:30 EST on spectrum reallocated to support “medical body area networks” (MBAN). GE Healthcare and Philips Healthcare are scheduled to demo MBAN devices. Repurposing spectrum for new technologies is a major priority to open innovation across industries and MBAN is a major development in the healthcare field. A live stream can be viewed here.

Downes Recommends Congressional Action on Spectrum

With mobile broadband users gobbling up bandwidth at unimaginable speed and the prospect of new FCC auctions for more radio frequency years away at best, attention is turning back, once again, to the federal government itself. Federal agencies are the largest single holder of licensed spectrum. And they are notoriously unwilling even to acknowledge what, if anything, they’re doing with it.

In 2010, the FCC raised the alarm on spectrum in its National Broadband Report, estimating that mobile users urgently needed an additional 300 MHz. by 2015 and 500 MHz. by 2020. The White House followed up with an executive order directing the Department of Commerce’s National Telecommunications and Information Administration to identify as much spectrum as possible that could be freed up by government users. 

Nearly two years later, the NTIA has now issued its first substantive report. After polling twenty different federal agencies holding some 1,300 frequency assignments, the report seemed to offer good news. The agency identified nearly 100 MHz. of desirable spectrum that the government could vacate within ten years. In some cases, it might even be possible to share the frequencies with commercial users during a transition period starting as soon as five years.

But behind the summary, the details proved less encouraging. Not one of the agencies believes its current uses were or would become obsolete by 2020, meaning that for every band being cleared, replacement spectrum would have to be found elsewhere—and elsewhere, as it turns out, is in every case a frequency already licensed to another public or private entity. 

Relocation costs were estimated by the agencies themselves at $18 billion. Either the agencies didn’t tell NTIA how they arrived at these numbers, or else the report simply chose not to include the details. Perhaps that’s because the reported costs appear to have been reached simply by picking a number high enough to discourage the FCC from moving forward with the plan. (By law, the FCC cannot auction the spectrum if the expected returns don’t exceed the costs of relocation.) 

Any sharing, finally, would be conditioned on new commercial users acknowledging the priority of any remaining government squatters, a factor likely to depress auction prices further.

Congress, it seems, is none too pleased by bureaucratic foot-dragging thinly disguised as enthusiastic cooperation. Earlier this week, bi-partisan leadership on the House Energy and Commerce Committee announced the formation of a task force that will "take a comprehensive, thoughtful, and responsible look at how to improve federal spectrum use.” 

The committee went farther Thursday with the introduction of bi-partisan legislation that would require government agencies, particularly the Department of Defense, to clear out of a key 25 MHz. block of spectrum (a block included in the NTIA report) within five years. Under the proposed law, the FCC would be required to auction that spectrum for use by mobile broadband consumers, paired with frequencies in higher bands that has already been cleared. (Spectrum is often paired in this manner to enable devices to use different frequencies for sending and receiving information.)

Committee members don’t say so explicitly, but it’s hard to miss the implication that technology-focused lawmakers aren’t impressed by the slow progress NTIA has made in freeing up some of the government’s vast spectrum holdings. Not that NTIA is entirely to blame here—the agency only coordinates federal spectrum use; it has no power equivalent to the FCC’s role in private licensing and oversight.

Congress is right to give the agencies a swift kick in the butt. The spectrum crisis is real. It is already, as users in some metropolitan areas well know, having a negative impact on the remarkable expansion of mobile services, one of the few bright spots in a sour economy. We need to free up spectrum quickly, and stop coddling users—public and private—who are hoarding spectrum for which they paid nothing and with which they are hosting uses that are increasingly obsolete or inefficient.

The FCC and the NTIA are either unwilling or unable to move fast enough to head off disaster. So Congress needs to accelerate its deployment of both carrots and sticks. This week’s developments are steps in the right direction. But we need to be sprinting, not walking, toward real solutions to the spectrum crisis.

Larry Downes is the author, most recently, of “The Laws of Disruption: Harnessing the New Forces that Govern Business and Life in the Digital Age.” His earlier books include “Unleashing the Killer App: Digital Strategies for Market Dominance.” Follow him on Twitter @LarryDownes.

FCC Sets in Motion First Phase of Rural Broadband Reform

More americans may receive access to high-speed broadband in underserved rural communities as the result of telephone subsidy reforms launched yesterday by the Federal Communications Commission. The commission’s national broadband plan highlights the importance of rural connectivity to telemedicine, employment, and economic opportunity across the country.

The commission announced the official launch of the “Connect America Fund,” created in October 2011 to reform the Universal Service Fund -- a subsidy supporting rural telephone companies. The first phase of funding aims to boost rural broadband deployments and increase the efficiency of subsidies supporting the most rural communities.

Widespread access to broadband is vital to innovation. It not only democratizes the internet -- one of the most fertile platforms for discovery and invention -- it casts the net wider in the search for America’s emerging innovators and consumers. With access to high-speed broadband comes the ability for connection across the nation and for the use of the internet as a transformative tool for innovation and economic growth.

The FCC has said that about 18 million people lack access to broadband that meets its basic benchmarks for speed and that more than 83 percent of these Americans live in areas serviced by companies impacted by adjustments to existing rules. These individuals represent potential startups, entrepreneurs, and customers cut off from the economic opportunity offered by the internet.

Efforts by private companies such as Google’s fiber project in Kansas have demonstrated the ability of companies to reach communities with technology other entities may not provide. The FCC plan represents the beginning of a process to achieve much needed penetration in the most unconnected segments of the U.S. broadband landscape.

Spectrum: Solved? Not Quite.

A week ago, H.R.3630 passed the Senate, ending the spectrum stalemate that had been ongoing between mobile broadband operators, cable companies, and innovators to gain access to a dwindling supply of spectrum licenses. We wrote a longer piece examining the issues behind the stalemate and tentatively hoping the legislation could help us avoid a spectrum crunch.

Larry Downes wrote a really informative post on CNET this week warning that this may not be the case, for the following reasons:

• The FCC said that mobile users will need an additional 300MHz of spectrum by 2015, and an additional 500 MHz by 2020. Problem is, legislation or no legislation, there isn’t that much usable spectrum to go around. Nowhere near enough, according to Downes.
• There is spectrum which is not being used(including swathes of warehoused government spectrum), or not being used to its full capacity, but the nature of the FCC’s “increasingly outdated licensing system” makes it extremely difficult to re-purpose this spectrum to be more effectively used with today’s technologies. The new legislation takes steps to fix this, but we won’t see results of this for probably 10 years -- seven years too late for the aforementioned 2015 deadline.

All of which sounds pretty sinister.

But Downes advocates for the following short to medium term solutions to help close the gap and keep us from mobile broadband disaster. While not negating the threat entirely, they might at least constitute better solutions than burying ones head in the sand and hoping against all hope that spectrum learns how to multiply itself organically.

• Let them merge. When mobile carriers merge, they tend to make better use of limited bandwidth.
• Build more cellphone towers. Local zoning authorities can make it difficult for cell phone companies to update and add to their core infrastructure, which is the next best option for these companies to optimize their services without additional spectrum.
• Let’s all get new phones. Newer technologies make better, more efficient use of spectrum, particularly in the 4G LTE band. If everyone switched over, and there was tiered pricing plans for data use, we could suck a little more spectrum toothpaste out of the tube.

Ultimately though? We’re with Downes on this one: we need to rethink spectrum. We need to spend time hashing it out and crafting legislation alongside innovative processes that will work with our constantly evolving needs. We need to turn spectrum licensing into a responsive and nimble machine instead of a lumbering beast that needs massive overhauls every decade just to keep the system from complete collapse. So let’s look at this as an opportunity, rather than a disaster; as a chance to help shape long-term policy that fosters innovation.

Let us know what you think. Head over to Step2 to tell us your thoughts on spectrum as part of the innovation agenda.

Public Parks for the Airwaves

H.R.3630 just cleared House-Senate negotiations, and a consensus has been reached regarding the spectrum related provisions of the jobs bill. The bill contains provisions to take away the FCC’s ability to set eligibility rules for the auctions, and to re-allocate unused TV frequencies -- these so-called “white spaces” -- as unlicensed spectrum. The deal that’s been made retains some of the FCC’s ability to preserve unlicensed spectrum, although not as much as we might have hoped.

All of this legislative language revolves around spectrum auctions, which are part of H.R.3630 in order to offset the cost of the extension of unemployment benefits. Spectrum auctions also have the keen attention of telecom companies and of tech companies, both of which are fearing the effects of a looming “spectrum crunch”. The white spaces between licensed TV frequencies are considered especially valuable “beachfront” spectrum, because of their ability to penetrate buildings, carry data traffic, and extend to rural areas. They are hotly contested; telecom companies want them for their mobile broadband services, but supporters of innovation want them to remain unlicensed so that new technologies can be developed over them as has been done in the past with services like WiFi and Bluetooth.

Let’s break this down.

The problem is, we have a limited amount of airwaves through which to conduct many different and competing services. Mobile broadband operators need to have spectrum licenses to use with an ever-growing demand for data use associated with smartphones -- Apple’s Siri alone causes the iPhone 4S to require unprecedented amounts of data , even compared to other data intensive smartphones. And consumer demand for mobile broadband services isn’t likely to wane -- according to AT&T, mobile data use on their network has risen by 5,000 percent in the last few years . Then there are  more traditional uses of spectrum, like cable TV networks, radio, text messaging, and cell phone lines. Then on top of that, there’s unlicensed spectrum -- the “public” areas of our airwaves where innovations like  Wi-Fi, Bluetooth, and baby monitors operate. The unused TV frequencies, or white spaces, come under this unlicensed spectrum umbrella.

It might not come as a surprise that AT&T is for provisions that would take away the FCC’s ability to set limits on who can participate in spectrum auctions, at least on the surface. They are one of the largest carriers and stand to lose the most if they are blocked out or limited in the auctions. Smaller mobile carriers, including Sprint and T-Mobile, sent a letter to Congress voicing their opposition to the provision, which they said would limit the FCC’s ability to promote competition. AT&T immediately hit back with a statement saying the smaller carriers want the FCC to “stack the deck in its favor” and that the auction should be “fair and open”. Several commentators have noted that AT&T’s vehemence on the issue is slightly puzzling, given they have managed to do pretty well under the FCC’s rules so far.

Far more pressing to us, though, is what happens to those innovation-friendly white space frequencies. The unused television frequencies are more than just empty white spaces. They are the public parks of spectrum. What happens in these “public parks” is vital to innovation and long term economic growth -- not to mention that everyone benefits from these spaces, including companies like AT&T that regularly use unlicensed spectrum to ease the burden on their own spectrum.

A group of 42 members of Congress, led by Rep. Anna Eshoo (D-CA) and Rep. Darrell Issa (R-CA), drafted and sent a l etter urging the preservation of unlicensed spectrum , arguing that “ exploring the use of beachfront spectrum, specifically in the television band, is vital given its ability to penetrate buildings, enhance rural coverage, and carry more data traffic than traditional Wi-Fi”.  The letter also noted that in the band best suited for mobile broadband, there is currently 5 times more licensed than unlicensed spectrum. Senator Jerry Moran (R-KS), a major proponent for innovation policy and who along with Sen. Mark Warner (D-VA) co-authored the Startup Act , signed the letter and reiterated the sentiment at a Wireless Innovation Alliance and White Space Alliance event , saying “ America would miss an incredible opportunity to enable innovation on unlicensed bands.”

Negotiations, then, have until now been stalled by a lot of competing interests.  It looks as if Congress is opting for a middle of the road approach that hopes to satisfy all sides of the debate.  We’ll be watching to see what the the actual allocations of unlicensed spectrum will be and how this plays out for the innovation agenda.

Google Fiber comes to Kansas City

We’re very excited to see Google announce the commencement of their Google Fiber project in Kansas City today. Google Fiber will be putting down thousands of miles of cables to create a new broadband infrastructure which will eventually see data speeds of more than 100 times faster than the average speed most Americans currently enjoy.   

The project is enabled by the Gigabit Challenge -- a competition sponsored by the Kauffman Foundation seeking entrepreneurial ideas to create innovative and forward-thinking businesses to work alongside Google Fiber. Senator Jerry Moran has been a major proponent of the Gigabit Challenge, which goes hand in hand with the core initiatives he co-authored for the Startup Act -- which we strongly support -- a bipartisan agenda for invigorating the economy through innovation.

We look forward Kansas City’s continued growth as an entrepreneurial hub, and we also look forward to further expansion of high-speed broadband to every corner the country as we look towards building the future of the tech driven economy.