The Aspen Institute this week released a proposal for expanding broadband access across the U.S. drafted by Blair Levin, who joined the non-profit organization earlier this year after leading the team that crafted the National Broadband Plan. The proposal, found in a report titled “Universal Broadband- Targeting Investments to Deliver Broadband Services to All Americans,” aims to make broadband available to 99% of the U.S. population within 10 years.

If this sounds familiar, that’s because it’s based on the same reforms to the Universal Service program recommended in the National Broadband Plan. As in that plan, the new proposal recommends transitioning away from a voice-focused fund to one focused on broadband. It also would set a minimum broadband speed target of 4 Mb/s downstream and 1 Mb/s upstream—another recommendation carried over from the National Broadband Plan.

Other similarities include recommendations to phase out rate of return regulation, to phase out the competitive eligible telecommunications carrier program, and to distribute broadband funding based on a market-based mechanism such as a reverse auction.  Both proposals also call for the creation of a broadband mobility fund aimed at bringing all states to a minimum level of 3G service.

One notable difference between the two proposals. The National Broadband Plan said its recommendations could bring broadband to 99% of the US population within 10 years without new funding but that goals could be achieved more quickly if Congress would raise “a few billion dollars per year over two to three years” in additional funding. The new Aspen Institute report does not even suggest the idea of achieving universal broadband prior to 2020 and makes no request for additional funding—perhaps in recognition of today’s political realities.

The new paper also includes a few brand new ideas not previously mentioned in the National Broadband Plan. These include a proposal to set aside $100 million from the high-cost Universal Service program to be awarded to the provider in five areas who gains the greatest efficiencies in broadband adoption.

“This would take the form of a reverse auction in which a number of areas, far greater than five, are identified as eligible for the program,” wrote Levin in the report. “The winners of the grants will be those who guarantee the greatest increase in users for the least amount of money. Through such a market-based program, the country will learn which tactics are the most cost-effective for increasing broadband adoption.”

In addition the report recommends redirecting another $100 million from the high-cost fund to create a competitive program for sustainable economic development.

“The money would be awarded on a competitive basis, with grant applicants providing information on how many jobs the grant would create and the grants being awarded on the basis of the most jobs created per grant,” wrote Levin.

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3 thoughts on “New Broadband Plan Advocates Reverse Auctions

  1. This is really puzzling – quoted directly out of this new report – "This would also be consistent with existing FCC policy, which recognizes that rate-of-return regulation does not provide sufficient incentives for developing innovations…" I'm at a loss for words (but I'll try). How can Levin and the FCC say this, when most evidence points to the contrary.

    If you look where rate-of-return regulation exists today, you find robust broadband networks, utilizing some of the most innovative technology around. Be it GPON or softswitching, etc.

    Yet if you look in rural markets where so called incentive regulation already exists (i.e. rural Bell territories), you have just the opposite. Very slow DSL at best, but probably just dial-up access. Show me a true rural market served by a Bell company that has a robust broadband network? I can show you hundreds (if not thousands) of rural towns being served by carriers with rate-of-return that have state-of-the-art broadband networks.

    Why then are these people advocating replacing the structure (rate-of return) that most evidence suggests is working to meet the goal of broadband coverage in rural markets, with a system which most evidence suggests, does not. It's non-sensical.

    Should there be reform in rate-of-return? Sure, all programs can be reformed for the better. But why throw out the baby with the bath water?

  2. Isn't it likely that the winning bidders in the grant program will – by necessity – run a very lean operation and not be able to hire in region employees. And if there is funding overlap (into existing Title II borrower territory), isn't it more likely that the existing employee base of rural areas will decrease within those areas.

  3. If the USA's Interstate Highway System were initiated by the same brain trust as the National Broadband Plan, those residents in the large cities would have a 4 lane divided street outside their curb, and to travel between cities would be a one lane dirt road. Just as the Interstate Highway System has been a long term economic foundation for America, a well thought out National Broadband Plan could also be an economic engine for the future.

    I have heard that some of the smaller rural broadband providers have been saying that they aren't going to slow down their network to 4 Meg to meet the NBP rural requirements. ;^)

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