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How the National Broadband Plan Will Encourage Investment

February 24th, 2010 by Blair Levin - Executive Director, Omnibus Broadband Initiative

I'm speaking to a group of institutional investors about the Plan on  today.  It will be in a question and answer format, but I thought I would share how I will approach the conversation.

I hope to talk about how the Plan will affect the investment climate for what we think of the broadband ecosystem (suppliers of network services, devices and applications) both on the demand and supply sides. The Plan will increase demand and impact supply in every part of the ecosystem in the long-term in a few ways.

First, the plan will accelerate the move of certain sectors from processes designed and optimized for the technology of the past to more efficient processes enabled by broadband. 

As we discussed at the last Commission meeting, certain sectors of the economy-health care, education, public safety, energy, government services-have not utilized new, broadband-enabled processes nearly as effectively as they can.  We have identified barriers to that use that, if overcome, should spark an important increase in the demand for broadband across the board.

For an example of how such changes can positively affect the ecosystem, look at slide 101 from our September, 2009   meeting.  It reports on a study that demonstrated that using hosted electronic health records could save 18% over having such records on the doctors' own servers.  These savings are enjoyed even though for such hosting to work, the doctors have to spend twice as much on connectivity.  As noted in the slide, the dollar savings are only the beginning of the benefits of such services.

[Read the full speech here...]

2 Responses to “How the National Broadband Plan Will Encourage Investment”

  1. Guest says:

    very interesting presentation. This is a big step.

  2. Brett Glass says:

    Blair:

    With all due respect, if we continue the current spectrum auctioning regime, there will NEVER be a market for spectrum. It will always be cornered by large players, shutting out newcomers and innovators. Look at what's happening now! Broadcasters who don't need the spectrum they have are coveting it. Spectrum hoarders like Sprint/Nextel are buying up the EBS spectrum even in markets where they have more than enough BRS spectrum to serve every potential subscriber. The Commission has renewed licenses of LMDS spectrum owners who haven't met the buildout requirements -- even though there are others who would have long ago put the spectrum to good use. Incumbents are paying millions more than they will ever make on the spectrum to lock out new entrants. And holding onto the spectrum costs them nothing: no property taxes, no recurring fees, no maintenance. So, of course, they do it.

    The market is broken, and large players with billion dollar war chests have an overwhelming incentive to make sure it stays broken, no matter how much spectrum is released. Under the current auction regime, they have the ability to do it, too. The only solution is for spectrum NOT to be bought and sold, but for the Commission to rent it out (rather than sell it) under rules that ensure fairness. It should also create various kinds of "commons" (e.g. "licensed light" bands) which are not the jungles that the unlicensed bands have become. If it does not do this, the Commission is ensuring nothing but a continuation of the status quo: spectrum, spectrum everywhere, but not a drop for innovators, newcomers, and small providers to use.

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