National Broadband Plan: A Dream for Consumers, A Nightmare for Providers

February 17, 2010 - By Justin E. Gehrke

February 17, 2010 – Yesterday, the U.S. Federal Communications Commission (FCC) made public its plan to mandate standardized connection speeds for residential internet connections. As part of its larger National Broadband Plan, the initiative would ensure at least 100 million households had connectivity at 100 Mbps, by the year 2020.

While Google, who announced plans for it’s own high speed internet network last week, may be unfazed by the FCC announcement, other major U.S.-based Internet Service Providers (ISPs) could not say the same. Both Qwest Communications and AT&T have already expressed skepticism regarding the viability of the plan. Citing considerations such as the cost-prohibitiveness of network infrastructure upgrades and the inevitable need for significant price increases to recoup initial investments, both companies characterized the plan as too aggressive.

On the other hand, competitor Verizon has asserted that it’s fiber-optic FiOS network is already capable of providing 100 Mbps or higher. In their case, actually providing that level of throughput is dependent only upon the level of demand from consumers.

Current FCC goals include ensuring the U.S. becomes the world market leader in high speed internet availability and use. While Verizon may boast up to 50 Mbps in some areas, the average U.S. speed for homes is still estimated at 4 Mbps or less. Acknowledging that significant increases in speed could be accompanied by commensurate increases is ISP monthly fees, the FCC also indicated it would seek to obtain approval to include high-speed internet access costs under the umbrella of the existing Univeral Service Fund, which subsidizes phone service for low income families.

The FCC’s completed National Broadband Plan is expected to be released sometime next month.