President's Broadband Plan is A Pipe Dream

In his recent speech on the American Jobs Act, President Obama included "a deficit reducing plan to deploy high-speed wireless services to at least 98 percent of Americans." This would be done by auctioning off spectrum to wireless carriers with the condition that they use that spectrum to cover parts of the United States that do not currently have internet access.

This may seem like a marriage made in heaven - using wireless carriers to pay down the deficit AND expand internet access - but it's not. Here are two reasons why:

1) Where's the money to pay for the network, and
2) Wireless isn't a long-term solution

Expanding wireless to 98 percent of Americans could cost many billions more than the US Government receives in revenue from the spectrum auction. So, what's in it for AT&T, Verizon, Sprint, and T-Mobile? Clearly, if there were enough revenue potential in the uncovered, primarily rural, parts of the United States, they would already have wireless coverage by now. They're not covered right now because there's not enough revenue to justify offering service there.

So let's assume that the wireless carriers get the spectrum and start building out their networks to meet the 98 percent goal: at what point do they go back to Uncle Sam and demand major subsidies?

Secondly, wireless is not a long-term solution. In wireless technology, capacity and coverage work in opposite directions. You add more capacity, you get less coverage. Covering 98 percent of America with a low capacity wireless network doesn't get you very far. In five years' time or less, the radio equipment will need to be completely replaced as new radio technology comes out.

Rather than combining deficit reduction with broadband expansion, President Obama needs to consider other ways to finance a more future-proof, robust national broadband infrastructure that can meet the needs of the coming decades, and that should focus primarily on landline networks with fiber-optics, which can be used for decades and handle ever-increasing capacity demands without needing an upgrade. We did this for rural electrification, and we can do it for broadband.