Workshop on Internet Use in the Workshop on Internet Use in the AmericasAmericas

“U.S. Broadband Policy”

John M. R. KneuerDeputy Assistant Secretary for Communications and Information

National Telecommunications and Information AdministrationU.S. Department of Commerce

www.ntia.doc.gov

Washington, DCJune 16, 2005

Broadband Investment in the U.S. Broadband Investment in the U.S. Is GrowingIs Growing

Source: FCC’s High Speed Services for Internet Access Report, 12/04

High Speed Lines (millions)

Cable, 1.4

Cable, 18.6

ADSL, 0.4

ADSL, 11.4

Other Wireline, 0.6

Other Wireline, 1.4

Fiber, 0.3

Fiber, 0.6Satellite/Fixed Wireless, 0.4

Satellite/Fixed Wireless, 0.1

0.0

3.0

6.0

9.0

12.0

15.0

18.0

21.0

24.0

27.0

30.0

33.0

1999 2004

32.5 million

But Needs to Be Stronger…But Needs to Be Stronger…

Source: OECD Broadband Statistics, December 2004 (released May 24, 2005)

The President’s Broadband VisionThe President’s Broadband Vision

Goal

“This country needs a national goal for broadband technology . . . universal, affordable access for broadband technology by 2007.”

– President George W. Bush, Albuquerque, NM, March 26, 2004

Government’s Role

"The role of government is not to create wealth; the role of our government is to create an environment in which the entrepreneur can flourish, in which minds can expand, in which technologies can reach new frontiers."

– President George W. Bush, Technology Agenda, November, 2002

Benefits of BroadbandBenefits of Broadband

“[B]roadband will not only help industry, it’ll help the quality of life of our citizens.”— President George W. Bush, US Department of Commerce, June 24, 2004

Tele-Medicine Distance Learning Tele-Work National Security Jobs and Economic Growth

Creating Economic Conditions for Creating Economic Conditions for Broadband DeploymentBroadband Deployment

“We ought not to tax access to broadband. If you want something to flourish, don’t tax it.”

– President George W. Bush in Baltimore, Maryland on April 27, 2004

Tax relief has given businesses powerful incentives to invest in broadband technology • Accelerated depreciation for capital-intensive equipment• Extension of the Internet tax moratorium until Oct. 31, 2007;

support making the moratorium permanent• An 18-month extension of the research and experimentation tax

credit; support making it permanent • President's FY 2006 budget requests $132 billion for research

and development.

Removing the Regulatory Underbrush Removing the Regulatory Underbrush

“[B]roadband providers have trouble getting across federal lands…that’s why I signed an order to reduce the regulatory red tape for laying fiber optic cables and putting up transmission towers on federal lands.”

– President George W. Bush, U.S. Department of Commerce, June 24, 2004

Reducing Legacy Regulation of Broadband Services: The Administration supports the FCC’s order freeing newly deployed broadband

infrastructure from legacy regulation. Verizon, SBC, and Bell South announced they will wire at least an additional 20

million homes with fiber-optic cable by 2007 → Total investment is expected to be more than $6 billion over next several years.

• Bell South aims to provide 150,000 households with fiber per year and plans to increase the number of homes equipped with a fiber platform by 40% in 2005.

• SBC will bring video and broadband via fiber to 18 million homes in the next 2-3 years. • Verizon aims to connect more than 2 million homes and businesses in 2005.

Improving Access to Rights-of-Way: On April 26, 2004, the President signed an executive memorandum directing federal

agencies to implement recommendations set out by the Federal Rights-of-Way Working Group. They called for improvements in: 1) Information Access and Collection, 2) Timely Processing, 3) Fees and Other Charges, and 4) Compliance.

Expanding Competition: Wireless Expanding Competition: Wireless Broadband and New TechnologiesBroadband and New Technologies

Broadband over Power Line (BPL)

Advanced Wireless Services (“3G”)

Ultra-wideband

5 GHz Spectrum

70/80/90 GHz

The Administration has made more radio spectrum available for wireless broadband technologies:

“The other promising new broadband technology is wireless. The spectrum that allows for wireless technology is a limited resource . . . [a]nd a wise use of that spectrum is to help our economy grow, and help with the quality of life of our people.” -- President George W. Bush, June 24, 2004

Broadband Technologies Helping to Broadband Technologies Helping to Achieve the President’s Goal…Achieve the President’s Goal…

Wi-Fi• Jiwire.com counted 11,000 hotspots in 27 countries in Sept. 2003 –

compared to 65,508 hotspots today in 100 countries, with 26,872 hotspots in the United States alone (Source: jiwire.com, 6/14/05).

• Wi-Fi NICs are readily available for less than $50, and InStat/MDR predicts that 95% of laptops will have Wi-Fi as a standard feature by 2005.

WiMax• Intel plans to build WiMax into its Centrino chip platforms, which power

80% of all PCs, by 2006. Motorola plans to commercially offer integrated radio access networks that can handle 3G, Wi-Fi, WiMax and other future wireless innovations. AT&T, Siemens, and Alcatel are also backing WiMax technology.

• InStat/MDR estimates that a company could reach 97.2% of the US population with a $3.7 billion investment in Wi-Fi. (Source: Why Cheaper and Faster WiMAX will Force Convergence”, Wireless Business Forecast, Dec. 16, 2004)

Broadband Over Power Lines:Broadband Over Power Lines: The Third Wire The Third Wire

“We need to get broadband to more Americans . . . one great opportunity is to spread broadband throughout America via our power lines.”

— President George W. Bush, June 24, 2004

The FCC began a BPL rulemaking on February 12, 2004. Principal concern was the risk that BPL systems might

interfere with radio communications. NTIA submitted to the FCC a Phase 1 study that defined

interference risks and potential mitigations (April 2004). Based on additional analyses, NTIA recommended several

supplements to the FCC proposed BPL rules to reduce risk of BPL interference (June 2004)

The FCC adopted rules incorporating most NTIA recommendations on October 14, 2004.

Today, many utilities, hotel operators and others are deploying experimental and operational BPL systems.

HomePlug Modem can turn an electrical outlet into an Internet connection.

Broadband Over Power Lines:Broadband Over Power Lines: Current Deployments Current Deployments

VoIP and Other IP Applications Will VoIP and Other IP Applications Will Continue to Change the MarketContinue to Change the Market

Cable VoIP Market

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007

0

5

10

15

20

25

Revenues Customers

CAGR 2003-2007Revenues 51%Cable VOIP Customers 68%

Source: Kaufman Brothers, “A General Flavor of Mild Decay,” July 14, 2003

Millions of C

ustomersB

illio

ns o

f Dol

lars

President’s Spectrum Policy InitiativePresident’s Spectrum Policy Initiative

“The existing legal and policy framework for spectrum management has not kept pace with the dramatic changes in technology and spectrum use.”

- President George W. Bush, Presidential Memorandum, May 29, 2003

Committed the Administration to develop a comprehensive U.S. spectrum policy for the 21st century.

The Secretary of Commerce was charged to lead this initiative. In November, 2004 President Bush issued an Executive

Memorandum that established the recommendations as national policy and called for their implementation.

Security & Prosperity Partnership (SPP)Security & Prosperity Partnership (SPP)

"In a rapidly changing world, we must develop new avenues of cooperation that will make our open societies safer and more secure, our businesses more competitive, and our economies more resilient."

- Joint Statement by President Bush, Prime Minister Martin, and President Fox, March 23, 2005

Establish a cooperative approach to advance our common security and prosperity.

Develop a common security strategy to further secure North America Promote economic growth, competitiveness, and quality of life. Through

cooperation and information sharing, the SPP will work toward:

• Improving productivity;

• Reducing the costs of trade; and

• Enhancing the joint stewardship of our environment, facilitating agricultural trade while creating a safer and more reliable food supply, and protecting our people from disease.