FCC Plan for Expanding Broadband Access Carves Niche for Satellites

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SAN FRANCISCO — The Federal Communications Commission (FCC) is calling for investments of tens of billions of dollars over the next decade to extend broadband communications to Americans who lack access to the service and to develop an emergency communications network that would rely, at least in part, on satellite communications.

In its 360-page National Broadband Plan presented to Congress March 16, the FCC states that 7 million U.S. households do not have access to high-speed Internet service and suggests allocating as much as $15.5 billion over 10 years to ensure that all Americans can obtain a basic level of voice and broadband communications, which the FCC defines as download speeds of at least 4 megabits bits per second.

Part of that money could come from shifting some of the resources in the Universal Service Fund, which was designed to subsidize telephone service for low-income Americans. In addition, the FCC suggests that Congress may allocate “a few billion a year over the next two or three years” to accelerate broadband deployment. The Universal Service Fund raises approximately $8 billion a year through fees on long-distance calls.

“It is gratifying to see the commission recognizing what satellites can bring toward the goals of broadband access for all Americans and public safety,” said Patricia Cooper, president of the Washington-based Satellite Industry Association.

The FCC plan calls for spending $12 billion to $16 billion during the next decade to establish a nationwide, wireless, interoperable broadband public safety network to enable police and fire departments to communicate with one another. “Federal agencies should recommend the use of broadband fixed and mobile satellite service for emergency preparedness and response activities, as well as for national security, homeland security, continuity and crisis management,” according to the FCC plan, which Congress requested in the 2009 American Recovery and Reinvestment Act, legislation that set aside another $7.2 billion in grants and loans to bolster broadband access.

Satellite industry officials welcomed the emergency communications plan but cited concerns that other elements of the FCC report failed to recognize the role satellites could play in bringing high-speed Internet access to people in remote, rural areas. For instance, the FCC report says it would cost $24 billion to extend broadband to the 7 million U.S. households that lack access to terrestrial service and adds that no effort was made to calculate the cost of providing that service via satellite. “Satellite has the advantage of being both ubiquitous and having a geographically-independent cost structure, making it particularly well suited to serve high-cost, low-density areas,” according to the FCC report. “However, while satellite can serve any given household, satellite capacity does not appear sufficient to serve every unserved household.”

While that may be true of the current generation of satellites, Ka-band satellites scheduled for launch during the next two years by Hughes Network Systems and ViaSat Inc. will dramatically increase the industry’s communications capacity, a satellite executive said. What’s more, the price of launching a couple of additional communications satellites specifically tailored to offer broadband service to areas of the country that are hardest to reach using terrestrial networks, such as the upper Midwest and Pacific Northwest, would be less than $1 billion, said another satellite industry official.

In its report to Congress, the FCC also states a long-term goal of 100 million Americans having access to “affordable access to actual download speeds of 100 million bits per second and actual upload speeds of at least 50 million bits per second” by 2020. For important community institutions such as schools and hospitals, the FCC is seeking speeds of 1 gigabit per second. The 100 million megabit target for homes, which is 20 times higher than the current average for residential cable and fiber speeds, is more likely to be reached using terrestrial communications networks than satellite networks, industry officials said.

“One hundred megabits per second for 100 million people makes a good sound bite,” said Maury Mechanick, an international telecommunications attorney with White & Case LLP of Washington. “But it should not be the basis of national broadband policy.”

Throughout the National Broadband Plan, the FCC put great emphasis on determining the actual speed of broadband networks and ensuring that consumers have access to that data. The FCC proposes requiring broadband service providers to offer accurate information on the price and speed of high-speed communications services.

The FCC’s ambitious speed targets stem, in part, from the agency’s desire to help the United States leapfrog the many developed nations that have surpassed it in establishing widespread broadband access. In comments released March 16, President Barack Obama cited that goal. “My administration will build upon our efforts over the past year to make America’s nationwide broadband infrastructure the world’s most powerful platform for economic growth and prosperity, including improving access to mobile broadband, maximizing technology innovation, and supporting a nationwide, interoperable public safety wireless broadband network,” the president said.

Lawmakers will begin weighing in on the FCC broadband plan this week. The Senate Commerce, Science and Transportation Committee has scheduled a March 23 hearing. The House Energy and Commerce subcommittee on communications, technology and the Internet plans to hold a March 25 hearing.