The "broadband stimulus" programs established by Congress in the American Recovery and Reinvestment Act, making $7.2 billion available to improve broadband service in rural, un-served and underserved areas, actually must address three different sets of problems, says the National Cable & Telecommunications Association.
The NCTA notes that "unserved areas" represent about nine to 10 million households, typically in rural areas. NCTA refers to areas without "wired" access, as satellite broadband is available in those areas, though in some cases not technically accessible because of obstructions (mountains are the biggest issue, though foliage and trees or other structures in the line of site can be an issue in some cases). NCTA thinks projects extending broadband access to these households should be given highest priority.
"Underserved populations" represent a different problem. About 35 million households already have access to wired and satellite broadband, but do not currently use the services. The problem there is not "access," but "affordability" or "perceived value." Many of these potential users simply do not use PCs or the Internet, even if affordability is not the key problem. Simply building more access networks will not solve these problems. Instead, "demand stimulation" is the problem to be addressed in the "underserved" bucket of potential users.
Demand-side stimulus is what is needed here, and that might include training, equipment subsidies or usage subsidies.
Separately, there are households in underserved areas which have broadband access, but not at speeds generally available throughout the rest of the country. In these areas, the government should proceed with caution, NCTA says.
The need for subsidy in these underserved areas is not as great as in unserved areas or for underserved populations, and subsidizing infrastructure in these areas runs the risk of subverting the commercial deployment already taking place, NCTA argues.
Subsidies to these underserved areas should therefore be carefully structured so as not to favor one technology over another, one provider over another, the public sector over the private sector, or otherwise upset marketplace dynamics, NCTA argues.
NCTA notes that more than 92 percent of U.S. households actually have wired broadband access available to them. Satellite providers would argue that the eight percent without wired access are precisely the segment best served by satellite services.
About 18 states are least represented by wired access facilities, where households unable to buy a wired broadband service are less than 94 percent of all homes.
Among unserved geographic areas, subsidies therefore should be targeted first to areas in which service would not otherwise be provided and that could support the ongoing costs of providing broadband service if government funded the costs of the underlying infrastructure, NCTA argues. These are areas where infrastructure cost prevents commercial payback, but where an on-going business case can be made, if infrastructure deployment is not an issue.
New mapping of broadband facilities will be finished only after the funds have been disbursed, so "mapping" does not help either NTIA or RUS make its awards.
Merely providing broadband access does not necessarily mean that customers will subscribe to it, NCTA and other policy advocates note. The larger problem is that many consumers fail to subscribe to broadband service even when it is available. That's a "demand" problem, not a "supply" problem. "Researchers studying broadband access have concluded that 'lack of interest' in broadband is the main reason that people do not purchase the service.
Indeed, about onequarter of adult Americans do not use the Internet at all; these individuals are disproportionately lower-income and older than average Internet users, NCTA notes.
Grants should be used to provide targeted subsidies to make broadband services more affordable, NCTA suggests.
Access isn't the only problem the "broadband stimulus" investments must tackle.
The NCTA notes that "unserved areas" represent about nine to 10 million households, typically in rural areas. NCTA refers to areas without "wired" access, as satellite broadband is available in those areas, though in some cases not technically accessible because of obstructions (mountains are the biggest issue, though foliage and trees or other structures in the line of site can be an issue in some cases). NCTA thinks projects extending broadband access to these households should be given highest priority.
"Underserved populations" represent a different problem. About 35 million households already have access to wired and satellite broadband, but do not currently use the services. The problem there is not "access," but "affordability" or "perceived value." Many of these potential users simply do not use PCs or the Internet, even if affordability is not the key problem. Simply building more access networks will not solve these problems. Instead, "demand stimulation" is the problem to be addressed in the "underserved" bucket of potential users.
Demand-side stimulus is what is needed here, and that might include training, equipment subsidies or usage subsidies.
Separately, there are households in underserved areas which have broadband access, but not at speeds generally available throughout the rest of the country. In these areas, the government should proceed with caution, NCTA says.
The need for subsidy in these underserved areas is not as great as in unserved areas or for underserved populations, and subsidizing infrastructure in these areas runs the risk of subverting the commercial deployment already taking place, NCTA argues.
Subsidies to these underserved areas should therefore be carefully structured so as not to favor one technology over another, one provider over another, the public sector over the private sector, or otherwise upset marketplace dynamics, NCTA argues.
NCTA notes that more than 92 percent of U.S. households actually have wired broadband access available to them. Satellite providers would argue that the eight percent without wired access are precisely the segment best served by satellite services.
About 18 states are least represented by wired access facilities, where households unable to buy a wired broadband service are less than 94 percent of all homes.
Among unserved geographic areas, subsidies therefore should be targeted first to areas in which service would not otherwise be provided and that could support the ongoing costs of providing broadband service if government funded the costs of the underlying infrastructure, NCTA argues. These are areas where infrastructure cost prevents commercial payback, but where an on-going business case can be made, if infrastructure deployment is not an issue.
New mapping of broadband facilities will be finished only after the funds have been disbursed, so "mapping" does not help either NTIA or RUS make its awards.
Merely providing broadband access does not necessarily mean that customers will subscribe to it, NCTA and other policy advocates note. The larger problem is that many consumers fail to subscribe to broadband service even when it is available. That's a "demand" problem, not a "supply" problem. "Researchers studying broadband access have concluded that 'lack of interest' in broadband is the main reason that people do not purchase the service.
Indeed, about onequarter of adult Americans do not use the Internet at all; these individuals are disproportionately lower-income and older than average Internet users, NCTA notes.
Grants should be used to provide targeted subsidies to make broadband services more affordable, NCTA suggests.
Access isn't the only problem the "broadband stimulus" investments must tackle.
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