It’s less clear, however, whether the superfast connections championed by the FCC offer benefits commensurate with the costs. A study published last year by Motu Economic and Public Policy Research, a nonprofit institute in New Zealand, found that increasing broadband speeds may not help businesses’ bottom lines. The research, which examined 6,000 companies, found that productivity increased significantly when service was upgraded from narrowband to broadband; but there was “no discernible additional effect arising from a shift from slow to fast broadband.”
Nonetheless, the FCC does want commercial speeds to increase rapidly, to help the United States keep pace with rival countries. At the same time, the National Broadband Plan articulates a social and moral imperative to make sure that everybody can access the same basic services and operate in a 21st-century economy. Indeed, the plan often conflates these two goals. But the truth is that they require different technical approaches, political policies, and levels of investment.
The challenge, then, is to work out how to balance inclusion with innovation on a budget of $15.5 billion. Guidelines that the European Commission published last October after reviewing projects across the continent suggest that heavy government investment is the best way to extend broadband to underserved areas. That could be expensive, however. Northwestern’s Greenstein points out that bringing broadband to the farthest reaches of the United States will come at rapidly increasing costs–as much as $5,000 per household in some rural parts of the country, compared with a couple of hundred dollars in built-up areas.
Instead, the FCC recommends a fresh approach: freeing up new portions of the wireless spectrum and encouraging mobile broadband providers to fill the gaps in coverage. Some academics have endorsed this solution, but wireless broadband technologies are unproved. WiMax, for example, can deliver speeds of 50 megabits per second, but that speed declines with distance from the transmitting station.
Achieving ever-higher speeds may also require significant government intervention. According to a study by Harvard University’s Berkman Center for Internet and Society, the key to speeding up existing service is an initial government investment combined with policies that encourage competition. Municipal investment in fiber networking capacity, which is then leased to commercial parties, has led to increased broadband speeds in European cities such as Amsterdam and Stockholm. But it will be tricky to follow this path in the United States, because the industry has been set up differently. In the 1990s, the FCC decided to encourage competition between infrastructures such as cable and DSL, rather than between different providers using a shared backbone. As a result, companies in the United States have been less willing to shoulder the cost of investing in new broadband technology, since doing so would give them little advantage over any direct competitor.
Yet private investment will be vital to increasing broadband speeds. Korea’s rapid advances in the past decade were attributable in no small part to funding from companies. And there are encouraging signs that something similar is beginning to happen in the United States; in the most obvious example, Google is planning to roll out one-gigabit-per-second fiber lines to at least 50,000 and up to 500,000 people in trial locations across the country. But an FCC task force has suggested that more than $300 billion of private funding would eventually be required on top of the government’s expenditure in order to boost speeds to 100 megabits per second or higher for the entire nation.
In the end, the success of the National Broadband Plan will be judged according to the targets that the FCC has set for increasing both penetration and speeds by 2020. But the tension between those two distinct goals leaves a desirable outcome very much in doubt.
Bobbie Johnson is a freelance writer based in San Francisco. Previously, he was the technology correspondent for the Guardian newspaper.