November 2009

[Commentary] Given the fact that America's financial resources appear as though they'll never be turned full force towards tackling the broadband challenge, it's likely that our national broadband plan will have to be crafty with how it recommends allocating scarce resources to maximize the impact of the dollars we do have to spend. In other words, the plan must leverage whatever money is available as much as possible. Unfortunately, to date our government hasn't been very good at leveraging taxpayer dollars to create long-term broadband assets that can be built upon and expanded on into the future. The most recent example of this is the broadband stimulus package, where the bulk of the money was given to NTIA to hand out as grants. The only leverage this approach realizes is the 20% local match. In other words, for every dollar of grant we only get $1.25 of broadband. The idea of leverage is also important in terms of encouraging projects that leverage multiple pots of government money as a fully integrated project setup to benefit all facets of a community should qualify for a host of additional funds. Plus we also need to thinking about how to leverage existing assets so that we're not overbuilding capacity if it's not needed. I know for a fact that there are good people in government trying to think about how to solve these problems in these ways. My hope is that as they go about doing so they keep in mind the key word for every time anyone spend taxpayer dollars: leverage.

A House subcommittee is holding a hearing today to discuss proposed changes to the Universal Service Fund (USF) that include an auction process for wireless USF recipients, USF support for broadband and possibly requiring voice-over-IP providers to contribute to USF in states where their customers live. The draft under discussion by the House Subcommittee on Communications, Technology, and the Internet requires the Federal Communications Commission, within a year of the proposed act's passage, to set up auctions for wireless operators providing universal service to high-cost rural and isolated areas. Auction winners would receive USF support for as many as 10 years before a new auction would be held. Auctions would take place only where there are at least three competing providers, and bidders' proposed minimum broadband speeds would be a primary consideration. Where there are fewer than three competitors, the FCC would continue supporting service line-by-line. The draft would allow carriers to apply USF to broadband deployment. Notably, though, the draft defines broadband as having download speeds of at least 1.5 megabits per second. That's about twice the speed at which the FCC defines broadband - 768 kilobits per second. The draft would also allow states to force companies providing communications services within their borders to contribute to USF, which could include companies that provide Internet-based voice-over-IP services.

Britain's communications industry regulatory body recommended Tuesday that the government loosen restrictions on same-market ownership of newspapers and broadcast. The agency known as Ofcom is recommending liberalizing the local cross media ownership rules "so that the only restriction is on owning all three of: local newspapers (with 50% plus local market share); a local radio station; and a regional Channel 3 license." "This liberalization will increase the flexibility of local media to respond to market pressures," Ofcom CEO Ed Richards says in a statement. "Consumers still rely on television, radio and press for news so we are not recommending complete removal of the rules." The looser ownership regulations would apply only to local newspapers and not to nationally circulated papers.

Spot.Us is a San Francisco-based website set up to crowdfund journalism. This is how Spot.Us works: A journalist raises money for her or his story on the Spot.Us website. The community donates for a pitch. Often times the amounts are small. Established news organizations can buy the story and publish it, otherwise the story is published on the Spot.Us site. In politics, from the Howard Dean campaign to Obama's triumph, we have seen a radical decentralization of political funding. In journalism, crowdfunding in the Spot.Us way decentralizes the editorial power. The editorial power is traditionally held inside news organizations. The editors decide what stories the writers work on and what stories are published. In crowdfunded journalism the Spot.Us way, donors hold most of the editorial power. The pitches are filtered by Spot.Us editors following certain criteria, though. For example the pitches have to be local to Spot.Us regions. So far, only few pitches have been turned away. Basically, if the community considers the topic worth covering, they'll donate and the story will get done. The crowdfunding phenomenon is a sign of the unraveling of the old, top-down journalism production models.