Will National Broadband Policy Help Save the Economy?

Even if President Barack Obama gets Congress to pass his economic stimulus plan by mid-February, the United States won’t leap out of recession. In fact, economists predict unemployment still will top 8.2 percent by the end of the year, and one Harvard University professor believes the jobless rate could exceed 10 percent. The great hope for upward momentum rests on Obama’s “American Recovery and Reinvestment Plan,” which aims to save or create at least 3 million jobs in sectors including health care, energy, education and, yes, communications. For our industry, it appears the plan will revolve around “expanding broadband lines across America,” as Obama said in his first major economic policy speech, on Jan. 9. If America invests $10 billion in broadband networks alone, it will generate approximately 498,000 jobs, according to a new report from the Information Technology and Innovation Foundation (ITIF).

If politicians prolong economic stimulus package negotiations, though, they risk keeping the United States at 19th out of 30 in global broadband penetration rankings. That statistic comes from a June 2008 report by the Organisation for Economic Co-operation and Development (OECD), the Paris-based group that tracks economic and social data for more than two dozen governments. In June 2007, the United States ranked 15th overall. Policy experts say that if the country doesn’t strive for first place in broadband penetration, job opportunities will be lost, and energy and health care costs won’t improve. So many now believe that an effective, government-backed broadband deployment strategy could be the best way to avoid those outcomes.

“We should be No. 1 by any measure, and anything that we can do to restore our place as a worldwide communications leader, we need to do that urgently,” FCC Commissioner Jonathan Adelstein said in an exclusive xchange interview Dec. 29, 2008.

There is keen interest among service providers and their respective associations in crafting a national broadband deployment strategy that will jumpstart job growth and bring high-speed Internet access to unserved and underserved parts of the country. To establish broadband supremacy, though, Congress and the Obama administration must give service providers — from RLECs, Bells and CLECs to cable and wireless operators — incentives to deploy networks in places they’ve so far avoided due to little hope of return on investment related to such geographies. Union workers, communications providers, consumers and others, of course, are pitching ideas for how to prompt broadband builds in such areas. The most popular proposals so far rely on offering government grants and tax credits; loans and bonds also factor in. And there’s controversy over which is best.