By DAVID GOODFRIEND and BRAD BLAKEMAN | 3/26/13
In a few weeks, when the next budget brinkmanship over the debt ceiling begins in earnest, we will witness yet another gut-wrenching tug of war over budget cuts, debt limits, federal spending and economic policy — all of which will be less than helpful to unemployed Americans. Regardless of what goes on in Congress, however, regulatory agencies like the Federal Communications Commission can help to create jobs right now. Unlike just about everything else in Washington these days, they can do it to cheers from both political parties.
Recently, outgoing FCC Chairman Julius Genachowski said our economy needs “growth engines” and that few sectors have more job-creating innovation potential than broadband, particularly mobile broadband. He’s right. Genachowski and outgoing Republican Commissioner Robert McDowell can leave the FCC at least agreeing that we should improve job growth through broadband. The same is true for members of Congress from both parties.
To address growing consumer demand for mobile broadband service, the FCC auctioned valuable spectrum licenses to wireless service providers during the past decade. In turn, these providers invested billions of dollars to deploy next-generation, high-speed mobile broadband networks. These advanced broadband networks have spurred innovation that delivered smartphones, a multibillion-dollar apps economy and a mobile network that nearly 36 percent of all Americans now use exclusively for their communications needs.
These successes, however, have driven even greater consumer reliance on, and demand for, data-intensive apps and services on smartphones, tablets and other mobile devices. As a result, spectrum is being devoured by these mobile services.
The FCC can build on the proven economic engine of wireless networks and address the current spectrum shortage by identifying additional spectrum that can be allocated and auctioned to wireless providers for their exclusive use to serve America’s mobile consumers. The agency also can move quickly to carry out a congressional mandate that recently relinquished broadcaster spectrum be made available at auction and re-purposed for consumer mobile broadband services. And just for good measure, it should speed its decision-making process for private spectrum transactions pending before the agency.
A vibrant digital economy requires a regulatory framework that promotes 21st-century wireless and wireline infrastructure. Today, incumbent local exchange carrier wireline networks remain stuck in the past century in terms of technology and regulation. These copper-based networks, first deployed in 1878, were designed primarily to provide voice telephone service when no other network or voice service was available to a consumer. While consumers today communicate using many alternative broadband services and providers — including voice over IP (or VOIP), wireless, email, text and gaming platforms — FCC rules require only incumbent telephone companies to maintain and operate two redundant networks — the old copper network and the advanced high-speed broadband IP networks to which millions of consumers are migrating.
The FCC has made clear that the nation needs to retire outdated non-broadband copper lines and replace them with 21st-century IP-based high-speed broadband data networks that consumers need and demand. Many consumers already have made this transition, abandoning the traditional voice network for IP-enabled voice services. In fact, one in three American homes now relies on wireless-only technologies, according to the U.S. National Health Interview Survey. Wireless Internet access, according to the Pew Trust, is greater in Latino and African-American communities than in the population at large, suggesting that much of this “cord cutting” occurs among people previously harmed by the wireline digital divide.
The FCC can respond to this new reality in telecommunications and foster capital investment and economic growth by accelerating the nation’s transition to all-IP networks. It can authorize beta trials to test the transition to IP networks and services in select service areas. Many questions about the IP transition remain. The trials are a good way to start addressing them.
Our nation has seen this trial model work before. Prior to the digital television broadcast transition, the FCC conducted a successful trial in Wilmington, N.C., that helped to answer regulatory questions and offer logistical insights into how a national transition could best proceed while protecting consumers. Beta trials of a complete transition to IP networks in select neighborhood service areas would provide the FCC with an opportunity to oversee and monitor the transition and examine how best to implement a national transition.
The consumer benefits provided by wireless and next-generation IP broadband networks are significant. The capital investment resulting from building more wireless network infrastructure and transitioning to wireline IP networks would not only help job creation and economic growth, it also would help us achieve the president’s goal of 98 percent of U.S. residents having access to high-speed mobile broadband service within four years. Now is the time to act.
David Goodfriend is a former Clinton White House and FCC official now practicing telecommunications law in Washington. Brad Blakeman is a former George W. Bush White House senior staff member and former president of Freedom’s Watch now lecturing at Georgetown University.