Election Pledge: Broadband Access for All

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dewayne Hendricks <dewayne () warpspeed com>
Date: September 14, 2004 10:39:54 PM EDT
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] Election Pledge: Broadband Access for All
Reply-To: dewayne () warpspeed com

Election Pledge: Broadband Access for All

Both Presidential Candidates Tout the Internet Technology But Avoid 
Subsidy Question

By ANNE MARIE SQUEO
Staff Reporter of THE WALL STREET JOURNAL
September 14, 2004; Page A4


At the onset of the Great Depression, supporters of President Herbert 
Hoover's presidential campaign promised "a chicken in every pot and a 
car in every garage."

This year's election pledge: high-speed Internet connections for all.

For months, President Bush and his Democratic challenger, Sen. John 
Kerry, have been one-upping each other about the necessity for 
ubiquitous broadband and how to achieve it. But for all the rhetoric, 
the two candidates aren't far apart and both duck a central issue: 
Should a nationwide broadband rollout be subsidized by the government?

Industry executives, who by early August had contributed nearly $11 
million to the presidential candidates, are pushing for a national 
broadband policy to speed adoption of the technology. Countries with 
such policies, including South Korea and Canada, have used government 
funds to boost subscription rates, and the technology industry wants 
the U.S. to do the same.

"We've been trying to get the administration to have some of the 
federal monies used to subsidize the spread of broadband," says Matthew 
Flanigan, president of the Telecommunications Industry Association, a 
trade group representing more than 1,000 telecommunications and 
high-technology companies.

Both industries were hit particularly hard when the stock market and 
economy tumbled in 2001. "The information-technology sector is critical 
to the future growth of this country," Mr. Flanigan says. "We created 
the most jobs in this decade and lost the most in the last three or 
four years."

Such complaints certainly have the candidates' attention. President 
Bush kicked off the rhetoric in March, proclaiming to a New Mexico 
audience: "This country needs a national goal for...universal, 
affordable access for broadband technology by 2007." He has repeated 
this several times in speeches in Minneapolis, Washington and 
elsewhere, with various embellishments, including the need to "clear 
regulatory hurdles" and keep the Internet free from taxes.

Sen. Kerry, meanwhile, called for spending $2 billion over five years 
in tax credits for companies that invest in building the fiber-optic 
and other networks necessary for widespread broadband deployment, 
especially in rural and underserved areas. In a June speech to a 
high-tech audience in San Jose, Calif., he lambasted the Bush 
administration for making budget cuts and policy decisions that 
"eroded" the U.S. position as a technology leader.

Whether broadband access would be widened through federal subsidies 
under either candidate remains in question. Industry officials argue it 
is necessary to bring down the cost of broadband subscriptions, 
currently still at least $30 a month in much of the country.

Sen. Kerry's tax credit could be interpreted as a form of government 
funding. President Bush, through an Agriculture Department program, has 
invested $21.3 million in grants to wire schools, hospitals and 
emergency workers in small towns. But neither has gone further down the 
subsidy path.

The pressure to wire more of America will keep the question alive. A 
recent study by the Organization for Economic Cooperation and 
Development, an international think tank in Paris, ranked the U.S. 10th 
in world-wide broadband deployment in 2003, behind South Korea, which 
ranked first, Canada and Iceland. In 2001, the U.S. ranked fourth.

The administration defends its record overall, noting the president and 
the Federal Communications Commission have worked to ease regulations 
on broadband providers. Mr. Bush signed an executive order making it 
easier to run fiber-optic cables over federal land, and the FCC has 
been trying to roll back regulations for high-speed Internet access to 
spur investment. "This administration understands the potential," said 
John Marburger III, science adviser to Mr. Bush, over the summer.

Industry and government officials say at least 75% of the country now 
has access to at least one broadband provider, even in rural areas. The 
latest FCC data found U.S. homes and businesses had 28.2 million 
high-speed Internet lines by the end of 2003, up 42% from 2002.

The majority of Americans still connect to the Internet from home 
through dial-up phone service, which typically operates at 56,000 bits 
a second and works for tasks such as sending e-mail, paying bills and 
shopping. Broadband, whether provided by a phone, cable or wireless 
operator, functions at least four times as fast and at potentially 
quite higher speeds.

That would permit more-complex tasks to be done online, including 
watching movies, making Internet phone calls, and taking real-time 
classes at far-off universities. High-speed connections would foster 
more of that, while creating the incentive to build or upgrade 
fiber-optic networks for higher speeds. (Broadband service in South 
Korea, for example, now reaches three million bits a second.)

Widespread availability of high-speed Internet connections could add 
$500 billion to the U.S. economy and generate more than 1.2 million 
jobs, says Robert Crandall, an economist at the Brookings Institution 
who was a co-author of a report on the topic last year for telephone 
company Verizon Communications Inc.

The Center for Responsive Politics, a nonpartisan research group, said 
that as of Aug. 2, the communications and equipment sector, which 
includes both regional phone companies and entertainment businesses, 
had donated $62.6 million in the 2004 election cycle. Sen. Kerry took 
in about $6.06 million, compared with $4.6 million for the president. 
Yet, the four regional phone companies -- Verizon, SBC Communications 
Inc., BellSouth Corp. and Qwest Communications International Inc. -- 
gave the majority of their total $5.1 million in contributions to 
Republicans, according to the center.

Write to Anne Marie Squeo at annemarie.squeo () wsj com

 URL for this article:
<http://online.wsj.com/article/0,,SB109511228446416664,00.html>

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