Challenge for Genachowski: Incumbent smoke screens

Opposition to FCC's free Internet plan for D block is mostly incumbent smokescreen.
Written by Richard Koman, Contributor
Last month I ripped into FCC chair Kevin J. Martin's plan for a re-do of the D-block fiasco. His plan was similar to one originally offered up by M2Z Networks. I said:
Revisiting the M2Z proposal is like entering a time warp. Let’s go back to a world in which free Internet is funded by advertising and the fees consumers pay to move up to faster access. Oh yeah, that’s the exact something-for-nothing disaster that blew up in governments’ faces when it was called municipal broadband.

Today, with the imminent announcement of Julius Genachowski as new FCC head, Craig Settles, who has been consulting and writing for years on appropriate business strategies for municipal wireless, offers a guest post on the plan.

By Craig Settles

Few things trip the Retch Reflex like the telecom industry's PR machine trying to shape the broadband-as-economic-stimulus discussion. A recent Maalox moment was their declaration that the business model for the FCC's proposed free AWS-3 spectrum would fail, the same as free municipal wireless failed.

To FCC Chairman-to-be Genachowski, don't believe it! This claim shows incumbents don't understand marketing or the market's needs. Committing 25% of AWS-3 spectrum to free Internet access is not the kiss of death to a smart business that understands both.

Those RFPs for "free" muni wireless often required a vendor build the physical network and provide access services at no charge. In the FCC proposal, only 25% of the spectrum must be available for free. If Bob & Bobbie's Broadband Emporium wins the bid, they still have 75% of the spectrum to sell, plus they can sell the network infrastructure.

So, B & B's Broadband goes into communities in need - rural, urban, whatever - and says to local government:

"Tell ya what, you partner with appropriate local businesses and we'll sell you an infrastructure and spectrum package for $x. We'll help you identify economic, healthcare, government and other needs for which this investment makes sense, plus throw in 25% of the access for those in financial need."

I recently surveyed economic development professionals nationwide (PDF of survey), and interviewed people from various communities who facilitated broadband projects that are making an economic impact. Their responses prove the viability of the AWS-3 business I described. Service offerings, partnerships and stakeholders would vary by community, but the end result would be the same: sales for B & B, local economies transformed by broadband, and free access where required.

There should be, however, some changes in other FCC rules, and how the administration evolves it broadband economic stimulus plan.

  • First, thinking that we need a single nationwide physical network similar to Interstate-95 that runs through a bunch of states is wrong. The right solution is a different combination of technologies and services for different communities.
  • Second, forget about covering 95% of the country. In 10 years, whatever technology you started with in California is going to be obsolete by the time you get to Maine. What's more, not everyone lacks sufficient broadband. Put AWS-3 where constituents, not incumbents determine a need.
  • Third, Washington should put most of those stimulus dollars and also legislation into place that enables local communities to asses their needs, select appropriate partners and begin building networks with B & B or whomever. Develop general standards that define quality of service, interoperability and most of all, meaningful broadband speeds.
  • Fourth, open the door to more direct feedback from the people who need the technology. If change.gov can facilitate 8,200 meetings nationwide by a range of constituents to discuss healthcare reform, do the same for broadband.

This is how you get a stimulus plan that produces short-term jobs and long-term economic benefits. Otherwise, we risk having the broadband change that we need arrive DOA - and taxpayer dollars will line the grave.

For over 20 years Craig Settles' workshops, consulting services and books have helped organizations worldwide understand how to use technology to cut costs, increase revenue and run a better business operation. His book in 2006, Fighting the Good Fight for Municipal Wireless, together with his many in-depth analysis reports, established Mr. Settles as a prominent thought leader on appropriate business strategies for municipal broadband network deployments.

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