Obama to Outline Wireless Broadband Initiative
President Obama on Thursday plans to announce details of a broad new agenda to expand wireless broadband service to 98 percent of the population over the next five years, fleshing out a plank of the ambitious infrastructure agenda he described in January's State of the Union address.
Later this morning, Obama will travel to Marquette, Mich., where he is scheduled to observe a demonstration of a distance learning session conducted over a WiMAX network at Northern Michigan University. In his remarks to follow, Obama will tout ubiquitous high-speed wireless connectivity as a critical ingredient for helping businesses thrive, boosting education and promoting public safety.
Speaking with reporters ahead of the president's trip, senior White House officials explained that the new National Wireless Initiative, like many of the programs the administration has been touting recently, aims to craft a public-private partnership where industry members play the leading role in the infrastructure build-out, spurred on, and in some cases supplemented, by government efforts.
"Companies are already doing the lion's share of the work to get us there," said Jason Furman, deputy director of the National Economic Council. "But those private plans by themselves aren't going to reach into rural areas, into remote areas."
The administration is describing the National Wireless Initiative as an "integrated" policy push that aims at once to deliver near-universal 4G wireless connectivity for businesses and consumers, build a nationwide, interoperable public-safety network, and invest in research and development for new wireless applications, all the while reducing the deficit by nearly $10 billion through revenues collected from new spectrum auctions.
The White House has endorsed the Federal Communications Commission's plan to reallocate 500 MHz of spectrum for mobile broadband over the next decade, reclaiming portions of the airwaves from both government agencies and commercial entities like TV broadcasters. The FCC is seeking authority from Congress to conduct so-called incentive auctions, whereby broadcasters would voluntarily give up their spectrum licenses in exchange for a portion of proceeds from their resale at auction.
The spectrum auctions are the core of the economic calculus the White House Office of Management and Budget has attached to the proposals Obama will announce today. OMB estimates that the new spectrum auctions would raise $27.8 billion in net proceeds, after subtracting the payouts to the broadcasters and government agencies that would incur relocation or other costs associated after giving up their spectrum. The actual auction price would likely be substantially higher.
After the auctions, wireless providers would be armed with significantly more capacity to build out their networks. From the windfall for the Treasury the auctions would produce, the White House is proposing a one-time contribution of $5 billion to the FCC's Universal Service Fund to subsidize wireless infrastructure in rural areas where the sparse population or rough terrain has kept private carriers from providing service.
In allocating that $5 billion, the FCC would require grantees to coordinate with public safety officials to ensure that the new towers and other infrastructure would interoperate with the national network for first responders.
Additionally, the White House is proposing $10.7 billion from the auction proceeds to directly fund the public safety network, the latest in a series of proposals to achieve one of the recommendations of the 9/11 Commission.
The administration is looking to steer $3 billion of the auction proceeds to a Wireless Innovation (WIN) fund that would support the development and testing of new mobile applications in areas such as education, health care and energy. Of that money, $500 million would support the public safety network, and is included in the $10.7 billion of dedicated money for the project.
By OMB's estimate, the auction proceeds, less the payouts to government and commercial entities that relinquish their spectrum and the expenditures outlined in the National Wireless Initiative, would leave $9.6 billion for deficit reduction over the next 10 years.