Obama proposes spending $18B to expand wireless broadband

President Obama laid out an ambitious agenda to expand mobile broadband access in the United States and committed to spending $18 billion in federal funds to do so. The president's proposals largely echo the wireless agenda his administration and the FCC have already described, though the president cast the goals as part of an effort to boost American competitiveness and jobs.

"We can't expect tomorrow's economy to take root using yesterday's infrastructure,'' Obama said in a speech Thursday at Northern Michigan University in Marquette, Mich. "To attract the best jobs and newest industries, we've got to out-innovate, out-educate, out-build, we're going to have to out-hustle the rest of the world. That means investing in cutting-edge research and technology."

In his State of the Union address in January, Obama pledged to expand high-speed wireless access to 98 percent of all Americans within five years. To get there, the administration is proposing to have government agencies auction off their spectrum and use spectrum more efficiently, as well as get TV broadcasters to engage in voluntary incentive auctions. The administration said that those efforts will raise an estimated $27.8 billion and contribute to lowering the federal deficit by $9.6 billion.

Importantly though, the administration did not outline how much money will be given back to broadcasters. So far, broadcasters have been relatively cool to the idea, which was proposed in the FCC's national broadband plan and is part of an effort to free up 300 MHz of spectrum within the next five years and 500 MHz within the next decade.

Sprint Nextel (NYSE:S) CEO Dan Hesse, who is currently the chairman of the CTIA, told FierceWireless that the trade group's No.1 priority will be to get access to more spectrum.

The administration said the auctions could offset the $10.7 billion it wants to spend on a nationwide, interoperable public-safety broadband network. The administration also wants a one-time $5 billion investment from the Universal Service Fund to expand access to high-speed wireless service in rural areas wireless, and $3 billion for research and development of emerging wireless technologies and applications.

There are two main stumbling blocks to the plan. One is the tepid support so far from TV broadcasters and the other is Congress, which may be loath to commit to billions of dollars in new funding. Still, the industry appeared confident that the proposals would find support.

"The fact is there is a pretty good political case to be made for funding first responders," PCIA President Mike Fitch told FierceWireleess. He said the same was true of the incentive auctions if broadcasters are given flexibility. 

Fitch said that large questions remain regarding the pace and scope of the initiatives, but said he was pleased wireless networks and infrastructure were receiving such attention. "In my experience in telecom, it's pretty remarkable to have the president talking about our issues at this level of specificity and priority," he said.

Despite all of the exposure given to wireless networks by the president, one study suggested there may be simpler ways to get the economy moving via wireless. According to a study by the the New Millennium Research Council, recent FCC efforts to expand the Lifeline cellphone program for poor and near-poor Americans could generate $3.7 billion in fresh income. 

For more:
- see this Washington Post article
- see this NYT article
- see this Bloomberg article
- see this White House release
- see this release

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