Internet providers scramble for slices of broadband pie

December 30, 2008 | Anthony Ha | Comments | |

It looks like President-elect Barack Obama’s promise to improve the nation’s broadband Internet access has been embraced by both politicians and the telecommunications industry. As usual, however, things get tricky once we dig into the details. The Wall Street Journal reports that how “broadband” is defined, and where the money gets spent (in the form of tax credits, government-backed bonds, and grants), will determine which industries benefit.

The big division is between phone and cable companies. The cable companies want to increase the definition of broadband to 5 megabits per second, which is about 6.5 times the current definition, so they can receive government backing to both improve existing networks and build new networks in “underserved” areas. Smaller phone companies, which provide slower service, are pushing for a lower definition of around 1.5 to 3 megabits per second. The definition of broadband also affects the proposed Clearwire network built with WiMax technology.

It shouldn’t surprise anyone that the telecom industries are looking to protect their interests. Let’s just hope the Obama administration, as well as politicians like Rep. Anna Eshoo (who represents a big chunk of Silicon Valley), are able to craft a policy that doesn’t just reflect the lobbyists’ demands. The Obama transition team’s refusal to comment in the Journal story is a discouraging sign; Eshoo didn’t have much to say, but at least she acknowledged there’s going to be a lot of fighting over the plan’s details.

If you think this is an important issue, it may be worth asking the Obama team to respond through the “Open for Questions” section of its Change.gov web site. Right now, the most popular broadband question is buried on the second page of the science and technology section. The question will need a lot more support if it’s going to be addressed in the next round of answers.

[photo:flickr/net_efekt]

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About the Author, Anthony Ha

Anthony is VentureBeat's assistant editor, as well as its reporter on enterprise technology, cloud computing, and tech policy. Before joining VentureBeat in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. You can also follow Anthony on Twitter.

  • Peter Antypas
    During the late 1800s, the US Federal government generously propped up the railroad industry. As a result, the US economy tripled in size in a relatively short time. In other words, everyone profited in the end.

    Now, I don't expect broadband development to have an effect of the same magnitude, but equal access to the Net opens many opportunities. Here's one very small example: Distributed call centers manned by small town US residents. Lack of broadband is the main obstacle. It is much easier and cheaper to terminate a VOIP call to Mumbai today, than some small forgotten town in Mississipi.
  • Filby
    I'm curious how the gov. propped up the railroad industry. I thought it was the "robber barons" who built the railroads. And if they gov. did give the wealthy money, it ought to be ashamed of robbing poor Peter to pay rich Paul.
  • My 19th century history is pretty fuzzy, but I imagine the American government did a lot of things during that period (and after!) that it should be ashamed of. Subsidizing the robber barons would be pretty low on the list.

    If the government funds infrastructure that serves the public good, I'd be slightly annoyed if some unethical folks profit too, but not more upset than that.
  • I agree with the sentiment, Peter, which I probably should have made clearer in the post. Especially after seeing the eye-opening stat that the U.S. has fallen from 4th to 15th in broadband penetration.
  • edhardy622
    British law student sues Abercrombie-Fitch for disability discrimination.
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