This week the FCC takes another step in translating into meaningful policy and legislation its 370+ page blueprint for transforming broadband. Wednesday, the FCC meets to discuss Universal Service Fund reform and a couple of other key issues.
There are many local telecom companies and smaller regional service providers that can do well by their communities and their balance sheets if they work hard to influence the reform effort's outcome. Their actions should encompass two realities: 1) the national broadband plan's success rests in local action, and 2) it's time to reassess the meaning of "market forces."
The ability to achieve the plan's stated primary goal of developing a more productive, creative, efficient America via broadband rests with local communities, not the dictates of national government or the behest of incumbents. It often seems that many in Washington, D.C., assume that just supplying the technology magically makes these things happen. It's communities that enable broadband to deliver the benefits, so D.C. primarily needs to help communities get what they need, not what the industry wants to sell--or not sell, as the case may be.
A frequent theme in discussions about the plan, particularly by those trying to marginalize the FCC's role, is that the market should drive changes to broadband issues. However, in broadband "the market" frequently is polite code for "whatever big dogs are left standing after years of thrashing competitors, and short-changing consumers and businesses alike."
In short, the USF reform outlined in the plan would make billions of dollars available for broadband buildouts by allowing the High Cost Program to pay for these. Among several proposed stipulations, the money would go to one provider in a region (however "region" is eventually defined). Depending on how the reform shakes out, the big dogs could pretty much screw over local communities and local providers.
USF reform under a new view of 'the market'
To understand this new view of markets and market forces, let me recount a recent discussion that led to a meeting of the minds between Don Means, a solid Republican, and I, a left-to-moderate Democrat. Means is a major advocate of libraries and plays a key role in the wiring of community institutions to facilitate broadband deployment.
As I detailed my views that repeatedly referred to community broadband, Means asked, "What happens if you change the word ‘community' with ‘market' because, really, that's what a community is?" He then outlined the free market strategy of Communities United for Broadband, an organization comprised of people of all political stripes devoted to bringing better broadband to local markets.
Mean's view is this.
1. Our community is a market.
2. As a market, our businesses and individuals collectively spend significant dollars on communication services.
3. Despite our spending as a market, we have un-met broadband needs and unfulfilled dreams.
4. Subsequently, we should use our purchasing power and political clout to get the broadband we need and want.
And Communities United added a fifth point:
5. Key to the success of our free market strategy is our ability to encourage, facilitate or create competitors in our market, which we will do.
How this free market strategy could impact USF reform
As I wrote previously, Google stirred up a lot of passion among individuals and businesses in more than 1,100 markets for gigabit broadband. That fire burns pretty hot. If communities, like the regional service provider that approached Corpus Christi, Texas, after they applied for Google fiber, were to go in and offer to help those markets meet their needs, good things could happen to their bottom line.
Go one step further by jumping into the FCC's USF reform effort with both feet to lobby for a market-centric solution. This is what communities should try to achieve.
Get the FCC to go to communities and ask, "What would you do with a gigabit broadband connection?" Google generated 1,100 RFI responses that included local market data supporting their need, and nearly 200,000 letters, in eight weeks after spending maybe $40,000 in staff, PR and Web development time. Getting needs analysis and focused proposals doesn't have to be a massive cross to carry.
Second, have communities that define their needs determine how USF money gets spent: which providers, which technology solutions, which partners, all of it. They are the market, they have the need, the USF is literally their money. Yeah, the FCC collects it from providers, but local markets everywhere pay every dime through our phone bills.
Third, I know the majority of readers here are wireless companies, but you and the FCC should encourage actions that make wired as well as wireless technologies eligible to receive reform money. First, NTIA/RUS fixate on fiber to the near exclusion of wireless, and then the FCC gets pretty starry-eyed over wireless. In reality, most markets require hybrid broadband technologies to meet their needs.
Fourth, guarantee the markets get what they pay for by establishing accountability standards. If an organization, public or private, takes money from USF for broadband, the FCC should hold them to accountability benchmarks (influenced by communities) that must be met before recipients get all of the money. Establish similar benchmarks for receiving Lifeline money to subsidize broadband adoption. No need for the poor to pay top dollar for basement-level service.
Fifth, take the handcuffs off the free markets. Stop incumbents from derailing efforts of local communities to implement what they determine are their best broadband solutions. Communities each collectively spend hundreds of thousands of dollars per month (or much more) for voice and data communication services. If they are unhappy with their broadband service then, as with any other service, they should be able to collectively spend their money where they see fit: local telecoms, nonprofits, public-private partnerships in whatever form these take, etc.
I believe USF reform is inevitable. Somebody's going to rake in revenue as a result of that reform. Local and regional players can bend policy decisions and legislation to achieve a stronger competitive position in this scuffle. You can give yourselves additional leverage dealing with eventual rules governing new monies made available. But to do either, you need to rally market forces and that means rallying communities.
Craig Settles, President of Successful.com, is an industry expert who helps organizations pursue stimulus grants. Follow Craig at twitter.com/cjsettles