[Commentary] Federal Communications Commission Chairman Julius Genachowski hailed the commission's latest plan for rural broadband as "taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined." It's easy to capitalize on someone's reputation once they're no longer around to object. But would Steve Jobs, famous for bucking the big mobile carriers' modus operandi, brand a plan that is largely supported by big telecom and features old technologies as a think different moment?
The big news is that the FCC is dissolving the Universal Service Fund, created by the charge on your phone bill that subsidizes phone service in rural areas, in favor of creating a fund that subsidizes broadband. "As part of this reform, some consumers may pay, on average, an additional 10 to 15 cents a month on their bills; but for every dollar in cost, reform will provide $3 in benefits for consumers." Wow, does this sound like "Hi, we're from the government, we're here to help," or what? There's no doubt that any move away from telecom-based infrastructure and towards modern IP-based infrastructure is a good move. But will the FCC's new plan cost you? More to the point, will it preserve the "big brother" status of incumbent telecoms, or is it really a bold, new move, the equivalent of Steve Jobs' runner throwing the hammer into the screen in the famous "1984" Macintosh commercial?
My overall take is that it's not really a Steve Jobs moment when we're encouraging carriers to build a whopping 4 Mbps downstream and 1 Mbps upstream. Can I get a Pentium Pro PC with a 100-MB hard drive to go with that? Oh, wait, carriers can apply for a waiver if it's a hardship to build out 1 Mbps. Maybe that comes with a 486SX with 4 MB of RAM.
Dave Burstein, an industry analyst, is also full of sunshine about the plan, saying that the FCC "gave the big telcos a fat subsidy for what they already have while cutting the small telcos and rural competitors. It's mostly a switch in subsidies between carriers disguised as a broadband effort." It is troubling that, according to his analysis, "Verizon and AT&T claimed they would have to abandon 5-10 million lines that already get broadband because the costs were too high," due to a phony model that claimed $80 per month in costs to serve those lines. He adds that 2 million to 5 million homes will not be reached by this effort, as they're deemed too expensive.