[1st-mile-nm] Broadband and Federal Infrastructure Investment

[Richard Lowenberg]

A Stimulating Discussion
DECEMBER 03, 2008

www.lightreading.com/document.asp?doc_id=168794&site=cdn

So far, the U.S. government has committed nearly $1.4 trillion to bail out the
U.S. financial system. That?s more than the New Deal, Marshall Plan,
Louisiana Purchase, and Iraq war combined.

The incoming Obama administration is signaling that it plans a massive
complementary stimulus package to kick-start the economy ? at least another
$500 billion by some estimates. This total of planned federal outlays, roughly
$2 trillion, equals about $18,000 per U.S. home passed. That?s a jaw-dropping
number for anyone who follows cable and telecom capital spending.

The Obamans say their goal through the stimulus is to keep Americans working by
accelerating spending on infrastructure items like roads, bridges, and schools.
Also on the agenda is to turbo-charge the growth of "green" technologies,
creating jobs, taking market leadership, and helping to turn the tide on
climate change.

If one is hatching plans for strategic infrastructure investment, economic
growth, and job creation while reducing greenhouse gas emissions, then spending
to dramatically boost broadband access capacity should also be high on the
agenda. Upgrading cable or telco infrastructure to enable symmetric 100 Mbit/s
IP access for 100 million U.S. homes at an average cost of $500 per home passed
would acount for less than 3 percent of the $18,000 per home now on the table
for bailout and stimulus spending.

This is an agenda item that has been pushed by Silicon Valley advocacy group
TechNet for years, but to little avail. Now is the time to seriously consider
it.

This modest 3 percent proportional investment could deliver massive returns. The
deployment of basic broadband access (5 Mbit/s or less) has fueled the growth of
the Internet economy over the past decade. Because the utility, efficiency, and
value of Internet-based communication and commerce is dependent on always-on
broadband access, ?broadband 1.0? has effectively been the catalyst for the
creation of entire industries. The deployment of broadband 2.0 -- with
ubiquitous access at up to 100 Mbit/s -- could create a second cycle of
innovation and economic growth that would replicate the gains of the past
decade.

Importantly, if treading this path, the feds should pick bandwidth and
deployment coverage targets, rather than the technologies to meet them.
Fiber-to-the-home (FTTH), hybrid fiber/coax (HFC), long-term evolution (LTE),
WiMax? Who cares? Let the market decide the winner.

As an eco-bonus, 100 Mbit/s broadband could prove to be a key ingredient in the
battle against climate change. Human-caused carbon dioxide emissions are
considered the key driver of global warming. The U.S. produces about 25 percent
of global carbon dioxide emissions from burning fossil fuels. Of this total,
transportation accounts for about a third of U.S. emissions.

Naturally, environmentalists focus on automotive fuel efficiency as a key
remedy, viewing hybrid combustion engines and fuel cells as eco-saviors. While
logical, this approach offers no remedy for today's gas-guzzling trucks and
automobiles, short of replacing them. An immediate solution, one that addresses
existing, inefficient vehicles, is simply to drastically reduce driving. And
where do Americans drive most? Commuting and shopping top the list.

Ubiquitous, high-bandwidth connections would enable feature-rich multimedia
telecommuting capabilities that could empower almost any worker not directly
involved in manufacturing, construction, agriculture, or human services to be
able to work at least part-time from home, or at micro-branch offices closer to
home. With only 3 percent of U.S. workers currently telecommuting, according to
Omnistats, there is great upside to quickly reduce consumer automotive mileage.

Cisco Systems Inc. (Nasdaq: CSCO - message board) is demonstrating the potential
for travel substitution via video-enabled communication in the enterprise market
through the deployment of its TelePresence platform. Using the system itself,
Cisco says its employees have avoided travel to more than 16,000 meetings,
saving the company more than $150 million, and preventing the production of
47,000 metric tons of greenhouse gas emissions.

Procter & Gamble, a Cisco customer, is eyeing similar results. P&G has installed
40 TelePresence systems globally and estimates the infrastructure will eliminate
some 1,000 business trips per month. Of course, Cisco?s TelePresence solution
is an elite corporate offering, with units priced up to $300,000. However, the
company says a SoHo version is in the works, with availability planned in about
a year. A long list of competitors is attacking the category as well. (See Tata
Touts Telepresence, BT Touts TelePresence, AT&T Preps Telepresence Service, and
Nortel, Tandberg Team on Telepresence.)

Accelerated broadband investment is not a foreign concept to team Obama. Indeed,
the need to ?deploy next-generation broadband? was No. 2 on the
President-elect?s campaign list for technology priorities. In political
hyperbole, the campaign said:

?Barack Obama believes that America should lead the world in broadband
penetration and Internet access. As a country, we have ensured that every
American has access to telephone service and electricity, regardless of
economic status, and Obama will do likewise for broadband Internet access."

?	Michael Harris, Chief Analyst, Cable Digital News



-- 
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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