White House Official Says FCC Should Hold Incentive Auction, as Planned, Next Year

Furman said the concept of a TV incentive auction emerged in a paper he commissioned while he was at the Hamilton Project at Brookings before the Obama administration began. It is “very important” that the FCC stick to its current timetable and hold that auction next year, he said. Furman noted the record bids in the AWS-3 auction: “The success of the last auction is an argument for the importance of the next auction."

Early in the administration, top economic officials focused on broadband's important economic role, Furman said. That led to the Broadband Technologies Opportunities Program and Broadband Initiatives Program, which were approved as part of the American Recovery and Reinvestment Act of 2009, he said. “We knew an important part of the solution here wasn’t going to be a government program that involved spending money,” he said. “A really big part of this had to be the private sector making the effort.”

Despite gains, too few Americans have access to affordable broadband, and five years later the administration remains as focused on broadband now as it was then, Furman said. “We continue to have a big urban/rural divide in terms of broadband,” Furman said. “We continue to have a lack of competition, especially at higher speeds.” ISPs have made significant investments in their networks, “but we still, despite all of that, have less competition than we’d like to have,” he said. Broadband is critical to the economy, he said. Broadband won’t make everybody rich, but being connected can raise incomes for families and help more become part of the middle class, he said.

FCC Chairman Tom Wheeler released a statement Wednesday highlighting the importance of the National Broadband Plan. The upcoming incentive auction and AWS-3 auction grew out of the plan, he said. “The Plan was a seminal moment in reorienting the agency to focus on the opportunities and challenges of high-speed Internet, and it was the spark that ignited many significant advances in communications policy.” It “laid out a roadmap” for the reform of current FCC programs, “such as the ongoing modernization of the Commission’s universal service programs, which is connecting millions of previously unserved Americans to our digital economy,” he said.

Blair Levin, who was plan manager, said the White House deserves much of the credit for moving things forward on broadband. The FCC can’t take the credit for recognizing the need to pay more attention to spectrum, he said. "It really was the work of people inside the administration, making the economic case for why the administration has to care about spectrum.” Levin is now at Brookings.

Focus on Spectrum a Surprise

John Leibovitz, deputy chief of the FCC Wireless Bureau, who worked on the spectrum parts of the plan, said many were surprised by the plan's heavy focus on spectrum. It wasn’t “obvious” spectrum would be part of the plan, he said. “There had been some other broadband plans and none of them had spectrum as part of them,” he said. LTE had yet to be deployed in 2010, voice was plateauing and while text messaging was on the rise, it doesn’t use that much data, he said. “It came down to, fundamentally, just a belief that the Internet would transfer mobile communications in the same way that it transformed fixed communications.” The FCC was trying to think five to 10 years out, he said. “We recognized that we were sort of in a hole.”

Five years ago, there was no spectrum in the pipeline for future auctions or future unlicensed usage, Leibovitz said. “We saw that as a challenge,” he said, “how do we do things much faster than in the past.” The plan suggested a TV incentive auction in 2013, but the FCC is still “on track” for a 2016 auction, he said. “It’s still remarkable when you consider how long the DTV transition took.” Government is about a year behind its goal of 300 megahertz for wireless broadband in five years, Leibovitz said. “We obviously need to keep looking at more spectrum and liberalizing, making more flexible, changing the rules.”

The biggest change as a result of the plan was the executive branch of the government for the first time “really understanding what was happening on the commercial side and committing to help the commercial side out in finding more spectrum,” said Mary Brown, Cisco senior director. The good news, based on Cisco’s much-watched annual report on projected mobile data demand, is that demand continues to build, she said. The bad news for the FCC is “we haven’t seen any flattening out of the curve yet,” she said.

Levin is famous for saying the plan will always be in Beta, noted CTIA General Counsel Tom Power, a former White House official. “I’m just waiting for Blair to get it out of Beta,” he joked. “We’ll be really smoking.”

The FCC's and, later, the administration’s goal of 500 megahertz in 10 years is important, Power said. “But in some ways these things are kind of a slog,” he said. “You’re trying to come up with a big round number to hit.” The question arises of how much spectrum does industry need for broadband, he said. “It’s sort of like saying how much electricity do you need,” he said. “Do we have to cap it? Give me more and we’ll do more with it. Limit it and we’ll do less.”

John Horrigan, who worked on the plan and is now at the Information Technology and Innovation Foundation, said that when work started on the plan, the FCC had much to learn. “We were long on goals and aspirations but short on proven models to guide policymakers,” he said. Much work remains, he said. For the poorest Americans, the broadband adoption rate has increased from 43 percent to 47.2 percent, he said. “The news has been OK in this arena … but slow and steady.” Price alone is not the single barrier to adoption and two-thirds of those without broadband say they wouldn’t want it even if the price was zero, Horrigan said.