Telecommunications
Broadband Deployment Plan Should Include Performance Goals and Measures to Guide Federal Investment Gao ID: GAO-09-494 May 12, 2009The United States ranks 15th among the 30 democratic nations of the Organisation for Economic Co-operation and Development (OECD) on one measure of broadband (i.e., high-speed Internet) subscribership. The Federal Communications Commission (FCC) has regulatory authority over broadband, and several federal programs fund broadband deployment. This congressionally requested report discusses (1) the federal broadband deployment policy, principal federal programs, and stakeholders' views of those programs; (2) how the policies of OECD nations with higher subscribership rates compare with U.S. policy; and (3) actions the states have taken to encourage broadband deployment. To address these objectives, GAO analyzed the broadband policies of the United States and other OECD nations, reviewed federal program documentation and budgetary information, and interviewed federal and state officials and industry stakeholders.
According to federal officials, the federal approach to broadband deployment is focused on advancing universal access. Federal officials said that historically the role of the government in carrying out a market-driven policy has been to create market incentives and remove barriers to competition, and the role of the private sector has been to fund broadband deployment. Under this policy, broadband infrastructure has been deployed extensively in the United States. However, gaps remain, primarily in rural areas, because of limited profit potential. Eleven federal programs help fund telecommunications infrastructure deployment, particularly in rural areas, and two of these programs, administered by the Department of Agriculture's Rural Development Utilities Program (RDUP), focus specifically on broadband infrastructure deployment. Industry stakeholders credit federal programs with helping to increase broadband deployment, particularly in rural areas, but told GAO that because of the high cost and low profit potential of providing broadband services in rural areas, the federal government will likely need to provide additional funding to achieve universal access. The American Recovery and Reinvestment Act of 2009 provides more than $7 billion to the Department of Commerce's National Telecommunications and Information Administration (NTIA), FCC, and RDUP, to map broadband infrastructure in the United States, develop a plan for broadband deployment, and issue loans and grants to fund broadband access and availability in rural areas. This funding will greatly increase the potential for achieving universal access, but overlap in responsibilities for these new broadband initiatives makes coordination among the agencies important to avoid fragmentation and duplication. Current administration officials said they are still formulating their telecommunication agenda. In comparison to the policies of several other OECD countries with higher broadband subscribership rates per 100 inhabitants, the U.S. policy lacks elements identified by the Government Performance and Results Act of 1993 as essential to achieving effective and efficient policy outcomes. Specifically, according to officials of these countries' governments, several of the OECD nations with higher rankings have written broadband policies, action plans, goals, and performance measures. A number of these other countries also have provided financial support, created financial incentives, or taken other steps to promote broadband. In interviews with state officials, GAO learned that states vary in their actions to encourage deployment. Officials in more than half the states cited gaps in broadband deployment and said their states were considering or had taken actions to address these gaps. Officials in 12 states said they had mapped their states and 13 more said they had plans to map; officials in 12 states said they have broadband deployment plans; and officials in 14 states said they have provided some type of financial support for broadband deployment.
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Report to the Chairman, Committee on Energy and Commerce, House of
Representatives:
United States Government Accountability Office:
GAO:
May 2009:
Telecommunications:
Broadband Deployment Plan Should Include Performance Goals and Measures
to Guide Federal Investment:
GAO-09-494:
GAO Highlights:
Highlights of GAO-09-494, a report to Chairman, Committee on Energy and
Commerce, House of Representatives.
Why GAO Did This Study:
The United States ranks 15th among the 30 democratic nations of the
Organisation for Economic Co-operation and Development (OECD) on one
measure of broadband (i.e., high-speed Internet) subscribership. The
Federal Communications Commission (FCC) has regulatory authority over
broadband, and several federal programs fund broadband deployment. This
congressionally requested report discusses (1) the federal broadband
deployment policy, principal federal programs, and stakeholders‘ views
of those programs; (2) how the policies of OECD nations with higher
subscribership rates compare with U.S. policy; and (3) actions the
states have taken to encourage broadband deployment. To address these
objectives, GAO analyzed the broadband policies of the United States
and other OECD nations, reviewed federal program documentation and
budgetary information, and interviewed federal and state officials and
industry stakeholders.
What GAO Found:
According to federal officials, the federal approach to broadband
deployment is focused on advancing universal access. Federal officials
said that historically the role of the government in carrying out a
market-driven policy has been to create market incentives and remove
barriers to competition, and the role of the private sector has been to
fund broadband deployment. Under this policy, broadband infrastructure
has been deployed extensively in the United States. However, gaps
remain, primarily in rural areas, because of limited profit potential.
Eleven federal programs help fund telecommunications infrastructure
deployment, particularly in rural areas, and two of these programs,
administered by the Department of Agriculture‘s Rural Development
Utilities Program (RDUP), focus specifically on broadband
infrastructure deployment. Industry stakeholders credit federal
programs with helping to increase broadband deployment, particularly in
rural areas, but told GAO that because of the high cost and low profit
potential of providing broadband services in rural areas, the federal
government will likely need to provide additional funding to achieve
universal access. The American Recovery and Reinvestment Act of 2009
provides more than $7 billion to the Department of Commerce‘s National
Telecommunications and Information Administration (NTIA), FCC, and
RDUP, to map broadband infrastructure in the United States, develop a
plan for broadband deployment, and issue loans and grants to fund
broadband access and availability in rural areas. This funding will
greatly increase the potential for achieving universal access, but
overlap in responsibilities for these new broadband initiatives makes
coordination among the agencies important to avoid fragmentation and
duplication. Current administration officials said they are still
formulating their telecommunication agenda.
In comparison to the policies of several other OECD countries with
higher broadband subscribership rates per 100 inhabitants, the U.S.
policy lacks elements identified by the Government Performance and
Results Act of 1993 as essential to achieving effective and efficient
policy outcomes. Specifically, according to officials of these
countries‘ governments, several of the OECD nations with higher
rankings have written broadband policies, action plans, goals, and
performance measures. A number of these other countries also have
provided financial support, created financial incentives, or taken
other steps to promote broadband.
In interviews with state officials, GAO learned that states vary in
their actions to encourage deployment. Officials in more than half the
states cited gaps in broadband deployment and said their states were
considering or had taken actions to address these gaps. Officials in 12
states said they had mapped their states and 13 more said they had
plans to map; officials in 12 states said they have broadband
deployment plans; and officials in 14 states said they have provided
some type of financial support for broadband deployment.
What GAO Recommends:
In developing the required broadband plan, the Chairman, FCC, should
work with the Departments of Agriculture and Commerce to specify
performance goals and measures for broadband deployment and to define
the departments‘ roles and responsibilities in carrying out the plan.
FCC generally agreed with GAO‘s recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-09-494] or key
components. For more information, contact Mark L. Goldstein at (202)
512-2834 or goldsteinm@gao.gov.
[End of section]
Contents:
Letter:
Background:
Market-Based Federal Approach to Broadband Deployment Focuses on
Achieving Universal Access:
The Broadband Policies of a Number of Other OECD Nations with Higher
Broadband Subscribership Are More Detailed than U.S. Market-Based
Policy:
States Vary in Their Approaches to Increasing Broadband Deployment:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Comparison of Various Broadband Organization Rankings:
Appendix II: Scope and Methodology:
Appendix III: Agencies That Fund Some Aspects of Telecommunications,
but Not Infrastructure:
Appendix IV: Comments from the Federal Communications Commission:
Appendix V: Comments from the Department of Commerce:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: FCC Broadband Tiers and Speeds:
Table 2: Eleven Federal Programs Supporting Infrastructure of
Telecommunications Deployment, Including Broadband:
Table 3: Agencies that Fund Some Aspect of Telecommunications, but Not
Infrastructure:
Figure:
Figure 1: Comparison of Country Rankings on OECD, ITIF, and Website
Optimization Broadband Indexes:
Abbreviations:
ADSL: asymmetric digital subscriber line:
BRAND: Broadband for Rural and Northern Development:
CIO: Chief Information Officer:
CRS: Congressional Research Service:
DSL: digital subscriber line:
EDA: Economic Development Administration:
Farm Bill: Food, Conservation, and Energy Act of 2008:
FCC: Federal Communications Commission:
GPRA: Government Performance and Results Act of 1993:
ITIF: Information Technology and Innovation Foundation:
kbps: kilobits per second:
Mbps: million bits per second:
NTIA: National Telecommunications and Information Administration:
OECD: Organization for Economic Co-operation and Development:
RDUP: Rural Development Utilities Program:
Recovery Act: American Recovery and Reinvestment Act of 2009:
USDA: U.S. Department of Agriculture:
Wi-Fi: wireless fidelity:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
May 12, 2009:
The Honorable Henry Waxman:
Chairman:
Committee on Energy and Commerce:
House of Representatives:
Dear Mr. Chairman:
Universal access to the Internet via broadband technologies--commonly
referred to as broadband Internet access--is considered a critical
economic engine, a vehicle for enhanced learning and services, and a
central component of 21st-century news and entertainment. For example,
broadband technology makes it possible for patients to go to clinics
near their homes and receive medical attention from specialists
hundreds of miles away; allows students to access information not
available from their local libraries; and gives school systems a means
of using one teacher to provide advanced courses to students in
multiple schools. The Telecommunications Act of 1996 directed the
Federal Communications Commission (FCC) and state public service
commissions to encourage the deployment of advanced telecommunications
capability, including broadband.[Footnote 1] Additionally, in 2004,
President Bush stated as a national goal that there should be
universal, affordable access to broadband technology. Similarly, in
January 2009, President-elect Obama spoke of expanding broadband lines
across rural America.
Despite the importance Congress and past and current administrations
have placed on access to broadband, the United States has not achieved
universal access to broadband technology and lags behind other
countries in terms of subscribership. For example, the United States
slipped from 4th in 2001 to 15th in 2007 and 2008 among the 30
democratic nations that make up the Organisation for Economic Co-
operation and Development (OECD)[Footnote 2] in the number of broadband
subscribers per 100 inhabitants.[Footnote 3] Although this measure is
only one of five criteria for evaluating broadband markets, the decline
of the United States in OECD's rankings caught the attention of policy
makers.[Footnote 4] In October 2008, the Broadband Data Improvement Act
initiated a variety of measures to improve the quality of federal and
state data regarding the availability and quality of broadband services
and to promote the deployment of affordable broadband services to all
parts of the nation.[Footnote 5] In February 2009, the American
Recovery and Reinvestment Act of 2009 (Recovery Act) authorized $7.2
billion for the development of a national broadband plan, the
nationwide mapping of broadband availability, and the deployment of
infrastructure to unserved and underserved areas.[Footnote 6]
Most federal programs that help fund broadband focus on improving
broadband deployment--that is, building the infrastructure on which
broadband services can be provided--because the infrastructure must be
built before the services can be delivered. You asked us to examine
these federal efforts. Accordingly, this report discusses (1) the
current federal broadband policy, the principal federal programs that
support the deployment of broadband infrastructure, and stakeholders'
views of those programs; (2) how the policies of those OECD nations
currently ranked ahead of the United States in terms of subscribership
compare with the U.S. policy; and (3) actions the states have taken to
encourage broadband deployment.
To address these issues, we analyzed relevant laws, regulations,
policies, and programs pertaining to broadband deployment; interviewed
federal officials about the policies and programs supporting broadband
deployment; and obtained information from officials and from Web sites
of some of those OECD nations currently ranked ahead of the United
States in terms of subscribership about their nations' broadband
policies and programs. We reviewed federal programs identified by the
Congressional Research Service (CRS) as funding some kind of domestic
assistance related to telecommunications that have provided federal
funds to deploy broadband infrastructure. To compare the current
federal broadband policy to the policies of those OECD nations that
currently rank ahead of the United States in terms of subscribership,
we assessed the extent to which each incorporated such elements as a
written policy, an action plan, and measurable goals. For more
information on OECD rankings, see appendix I. To obtain the views of
stakeholders and states, we interviewed representatives of U.S.
broadband provider associations and consumer organizations and
interviewed the Chief Information Officer (or his or her designee) in
48 of the 50 states[Footnote 7] and the District of Columbia. We
conducted our work from March 2008 through May 2009 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives. See appendix II for more information
about our scope and methodology.
Background:
The Internet became widely accessible to U.S. households by the mid-
1990s. For a few years, the primary means to access the Internet was a
dial-up connection, in which a standard telephone line is used to make
an Internet connection. A dial-up connection offers data transmission
speeds of up to 56 kilobits per second (kbps[Footnote 8]). Broadband
access to the Internet became available by the late 1990s. Broadband
differs from a dial-up connection in certain important ways. First,
broadband connections offer a higher-speed Internet connection than
dial up. For example, some broadband connections offer speeds exceeding
1 million bits per second (Mbps) both upstream (data transferred from
the consumer to the Internet service provider) and downstream (data
transferred from the Internet service provider to the consumer). These
higher speeds enable consumers to receive information much faster and
thus enable certain applications to be used and content to be accessed
that might not be possible with a dial-up connection. Second, broadband
provides an "always on" connection to the Internet, so users do not
need to establish a connection to the Internet service provider each
time they want to go online. The higher transmission speeds that
broadband offers cost more than dial up, and some broadband users pay a
premium to obtain very-high-speed service.
Consumers can receive a broadband connection to the Internet through a
variety of technologies, including, but not limited to, the following:
* Cable modem. Cable television companies first began providing
broadband service in the late 1990s over their cable networks. When
provided by a cable company, broadband service is referred to as cable
modem service. Cable modem service is primarily available in
residential areas. Cable modem service enables cable operators to
deliver broadband service by using the same coaxial cables that deliver
pictures and sound to television sets. Most cable modems are external
devices that have two connections, one to the cable wall outlet and the
other to a computer. Although the speed of service varies with many
factors, download speeds of up to 6 Mbps are typical. Cable providers
are developing even higher-speed services.
* DSL. Local telephone companies provide digital subscriber line (DSL)
service, another form of broadband service, over their telephone
networks on capacity unused by traditional voice service. To provide
DSL service, telephone companies must install equipment in their
facilities and install or provide DSL modems and other equipment at
customers' premises and remove devices on phone lines that may cause
interference. Most residential customers receive older, asymmetric DSL
(ADSL) service with download speeds of 1.5 Mbps to 3 Mbps. ADSL
technology can achieve speeds of up to 8 Mbps over short distances.
Newer DSL technologies can support services with much higher download
speeds.
* Satellite. Three providers currently offer broadband service in the
United States. These providers use geosynchronous satellites that orbit
in a fixed position above the equator and transmit and receive data
directly to and from subscribers.[Footnote 9] Satellite companies
provide transmission from the Internet to the user's computer and from
the user's computer to the Internet, eliminating the need for a
telephone connection. Typically a consumer can expect to receive
(download) at a speed of about 1 Mbps and send (upload) at a speed of
about 200 kbps. Transmission of data via satellite causes a slight lag
in transmission, typically one-half to three-fourths of a second, thus
rendering this service less suitable for certain Internet applications,
such as videoconferencing. While satellite broadcast service may be
available throughout the country, it generally costs more than most
other broadband modes and its use requires a clear line of sight
between the customer's antenna and the southern sky. Both the equipment
necessary for service and recurring monthly fees are generally higher
for satellite broadband service, compared with most other broadband
transmission modes.
* Wireless. Land-based, or terrestrial, wireless broadband connects a
home or business to the Internet using a radio link. Some wireless
services are provided over unlicensed radio spectrum and others over
spectrum that has been licensed to particular companies.[Footnote 10]
In licensed bands, some companies are offering fixed wireless broadband
throughout cities. Also, mobile telephone carriers--such as the large
companies that provide traditional cell phone service--have begun
offering broadband mobile wireless Internet service over licensed
spectrum--a service that allows subscribers to access the Internet with
their mobile phones or laptops in areas throughout cities where their
provider supports the service. A variety of broadband-access
technologies and services also are provided on unlicensed spectrum--
that is, spectrum that is not specifically under license for a
particular provider's network. For example, wireless Internet service
providers may offer broadband access in particular areas by
establishing a network of subscriber stations, each with its own
antenna that relays signals throughout a neighborhood and has a common
interface to the Internet. Subscribers place necessary reception
equipment outside their homes that transmits and receives signals from
the nearest antenna. Also, wireless fidelity (Wi-Fi) networks--which
provide broadband service in so-called "hot spots," or areas within a
radius of up to 300 feet--can be found in cafes, hotels, airports, and
offices. Hot spots generally use a short-range technology that provides
speeds up to 54 Mbps. Some technologies, such as Worldwide
Interoperability for Microwave Access (known as WiMAX), can operate on
either licensed or unlicensed bands, and can provide broadband service
up to approximately 30 miles.
* Fiber. This technology, also known as fiber optic, is a newer
technology for providing broadband service. Fiber optic technology
converts electrical signals carrying data to light and sends the light
through transparent glass fibers about the diameter of a human hair.
Fiber can transmit data at speeds far exceeding current DSL or cable
modem speeds, typically by tens or even hundreds of megabits per
second. Fiber optic technology may be provided in several ways,
including fiber to a customer's home or business or to a location
somewhere between the provider's facilities and the customer. In the
latter case, the last part of the connection to the customer's premises
may be provided over cable, copper loop, or radio technology. Such
hybrid arrangements may be less costly than providing fiber all the way
the customer's premises, but they generally cannot achieve the high
transmission speed of a full fiber-to-the-premises connection.
Although broadband often is referred to as a singular entity, a variety
of data speeds--ranging from 768 kbps to greater than 100 Mbps--are
defined as broadband. FCC's new categories for collecting data on
broadband Internet access service are provided in table 1.
Table 1: FCC Broadband Tiers and Speeds:
Tier: Basic Broadband Tier 1;
Speed: 768 kbps to 1.5.Mbps.
Tier: Broadband Tier 2;
Speed: 1.5.Mbps to 3 Mbps.
Tier: Broadband Tier 3;
Speed: 3 Mbps to 6 Mbps.
Tier: Broadband Tier 4;
Speed: 6 Mbps to 10 Mbps.
Tier: Broadband Tier 5;
Speed: 10 Mbps to 25 Mbps.
Tier: Broadband Tier 6;
Speed: 25 Mbps to 100 Mbps.
Tier: Broadband Tier 7;
Speed: Greater than 100 Mbps.
Source: FCC.
[End of table]
FCC has primary responsibility for regulating broadband. Section 706 of
the Telecommunications Act of 1996 directs FCC to encourage the
deployment of advanced telecommunications capability, which includes
broadband, to all Americans.[Footnote 11] Under this authority, FCC has
established a minimal regulatory environment for broadband Internet
access services, stating that less regulation will promote the
availability of competitive broadband services to consumers. FCC,
through a number of proceedings, classified broadband Internet access
(regardless of the platform) as an information service--a
classification that reduces regulatory requirements applicable to
broadband.[Footnote 12] FCC does not have explicit statutory authority
to regulate the provision of information services; however, FCC has the
authority to impose regulations under what is termed its ancillary
jurisdiction to regulate services that are reasonably related to its
existing statutory authority.[Footnote 13] FCC has concluded that it
has ancillary jurisdiction to promulgate regulations on broadband
through its rule-making procedures, but it has not yet exercised this
authority.[Footnote 14] FCC also has the authority to adopt broadband
regulations to ensure that broadband providers are capable of providing
authorized surveillance to law enforcement agencies.[Footnote 15]
As part of its responsibilities, FCC has periodically issued a report
to Congress on the status of advanced telecommunications capability in
the United States.[Footnote 16] To assist in the preparation of this
report, in 2000, FCC adopted a semiannual reporting requirement for
facilities-based broadband Internet service providers.[Footnote 17] In
November 2004, FCC modified its rules on filing this information, and
the revised rules went into effect for the companies' second filing in
2005. Specifically, FCC removed existing reporting thresholds, and
companies were required to report their total state subscribership by
technology. In 2006, we reported that the approach FCC then used to
collect data on broadband deployment, which counted broadband service
providers with subscribers at the ZIP code level, resulted in
inadequate information about broadband deployment.[Footnote 18]
Subsequent to our recommendation, in March 2008, FCC acted to increase
the precision and quality of its broadband data by revising its
methodology and requiring that broadband providers report the number of
broadband connections in service by Census Tract.[Footnote 19]
Furthermore, the Broadband Data Improvement Act calls for additional
actions to improve the quality of data available on broadband
deployment. Among other things, the Act directs FCC to:
(1) shift its assessments of broadband deployment from a periodic basis
to an annual basis;[Footnote 20]
(2) periodically survey consumers to collect information on the types
of technologies used by consumers to access the Internet, the
applications or devices used in conjunction with broadband service, and
the actual connection speeds of users;
(3) collect information on reasons why consumers have not subscribed to
broadband services;
(4) determine certain demographic data for geographical areas not
served by any provider of advanced telecommunications capability (i.e.,
areas where broadband has not yet been deployed); and:
(5) provide information on the speed and price of broadband service
capability in 25 other countries.
Two other federal agencies have responsibility for telecommunications
policies. The Office of Science and Technology Policy (OSTP) within the
Executive Office of the President has a broad mandate to advise the
President and the federal government on the effects of science and
technology on domestic and international affairs and has led
interagency efforts to develop science and technology policies and
budgets. The Department of Commerce's National Telecommunications and
Information Administration (NTIA) is the President's principal
telecommunications and information adviser and works with other
executive branch agencies to develop the administration's
telecommunications policies.
Market-Based Federal Approach to Broadband Deployment Focuses on
Achieving Universal Access:
Current Market-Driven, U.S. Broadband Policy Was Articulated in
Multiple Sources:
Agency officials we spoke with during the Bush Administration told us
that the market-based U.S. policy on broadband deployment could be
found in, or had been shaped by, various statutes, presidential
speeches, regulations, and reports. For example:
* Congress passed the Telecommunications Act of 1996 to encourage the
deployment of advanced telecommunications capability, which includes
broadband, "[and to] preserve the vibrant and competitive free market
that presently exists for the Internet and other interactive computer
services, unfettered by Federal or State regulation."[Footnote 21]
* In a speech delivered in March 2004, President Bush stated "that
there should be universal, affordable access to broadband by 2007 and
that, as soon as possible thereafter, the country should make sure that
consumers have got plenty of choices for their broadband carriers."
[Footnote 22]
* In 2004, FCC modified regulations applicable to local telephone
companies in order to expand incentives for them to invest in network
upgrades. In a series of orders, FCC ruled that incumbent local
telephone companies did not have to make certain elements of their
fiber networks serving residential customers available to competitors
at cost-based rates.
* A 2008 NTIA report reaffirmed President Bush's vision of universal
broadband access by noting, "from its first days, the [Bush]
Administration has implemented a comprehensive and integrated package
of technology, regulatory, and fiscal policies designed to lower
barriers and create an environment in which broadband innovation and
competition can flourish."[Footnote 23]
* The Broadband Data Improvement Act of 2008 was enacted to "improve
the quality of Federal and State data regarding the availability and
quality of broadband services and to promote the deployment of
affordable broadband services to all parts of the Nation."[Footnote 24]
Officials at OSTP, FCC, and NTIA during the Bush Administration told us
that the current federal broadband policy was market-based; OSTP told
us that the Bush Administration had implemented fiscal, technology, and
regulatory policies based on the recognition that a competitive
marketplace provides the best environment for achieving the United
States' broadband goals, and competitive markets should be deregulated;
an official at FCC characterized FCC's broadband policy in recent years
as one that reduced barriers to entry, lessened regulation of
broadband, and encouraged investment; and NTIA told us that federal
broadband policies of the past few years flow from an early speech made
by President Bush that emphasized the deployment of broadband, and that
NTIA has executed initiatives to remove economic disincentives.
Furthermore, according to these officials, the role of the government
in carrying out this policy was to create market incentives and remove
barriers to competition; the role of the private sector was to fund the
deployment of broadband. Accordingly, FCC, OSTP, and NTIA officials
told us they took a number of steps to open markets and encourage
competition. OSTP officials told us their agency has played the leading
role in crafting and coordinating the administration's broadband
policy, including federal efforts to support new wireline and wireless
broadband technologies. Moreover, OSTP has recommended policies to make
additional spectrum available for new wireless broadband technologies.
[Footnote 25] In addition, FCC, through a number of proceedings,
classified broadband Internet access (regardless of the platform) as an
information service. This classification reduces regulatory
requirements applicable to broadband, which FCC stated would encourage
broadband deployment and promote local competition. NTIA also took
action to encourage broadband deployment by increasing the amount of
spectrum available for advanced services and by clearing away
regulatory obstacles to promote investment.
Under this market-based policy, broadband infrastructure has been
extensively deployed in the United States. Representatives of broadband
providers told us this market-based approach to deployment has
encouraged investment in broadband infrastructure and has been
instrumental in getting this technology deployed to most of the homes
in the United States. Although a precise assessment of broadband
deployment in the United States is not possible because of data
limitations, federal officials and industry representatives estimate
that about 90 percent of American homes now have access to broadband.
However, gaps remain, primarily in rural areas, because the market does
not support private broadband infrastructure investment in low-density
areas. For example, officials from several states said that rural areas
in their states often lack broadband service. Representatives of both a
provider association and a consumer organization told us that these
areas lack broadband infrastructure because they offer little profit
potential. To ensure broadband access to all Americans, in the Food,
Conservation, and Energy Act of 2008 (the Farm Bill), Congress required
FCC to develop, in consultation with the Secretary of Agriculture, a
comprehensive rural broadband strategy.[Footnote 26] FCC must submit a
report to Congress by the end of May 2009 that describes a
comprehensive rural broadband strategy.[Footnote 27] The report is to
include, among other things, recommendations on how to coordinate
federal rural broadband initiatives and how federal programs can best
respond to rural broadband requirements and overcome obstacles that
currently impede rural broadband deployment.
In March 2009, FCC and NTIA officials told us that the federal policy
on broadband deployment is changing as a new administration and
Congress form their telecommunications agenda and as federal agencies
work to implement recent legislation. As evidence of this change in
focus, FCC and NTIA officials highlighted the new funding and
responsibilities the Recovery Act has given to federal agencies to
increase broadband availability, including developing a national
broadband plan. The Recovery Act broadband provisions will be discussed
later in this report.
Multiple Federal Programs Support Telecommunications Infrastructure
Deployment, Primarily in Rural Areas, with Two Programs Specifically
Funding Broadband:
Eleven federal programs administered by six federal agencies help fund
telecommunications infrastructure deployment, but just 2 of these
programs--Rural Broadband Access Loans and Loan Guarantees program and
the Community Connect Grant program--focus specifically on broadband
infrastructure deployment. Both programs are administered by the
Department of Agriculture's Rural Development, Utilities Program
(RDUP). In 2008, these 2 programs provided a combined total of about
$300 million for broadband infrastructure deployment. The remaining 9
programs provided over $7 billion for the deployment of various types
of telecommunications infrastructure, including broadband, in 2008.
However, because these 9 programs fund telecommunications
infrastructure deployment generally, and not broadband specifically,
the responsible federal agencies do not systematically track the amount
of funding provided for broadband infrastructure deployment. Most of
these 11 federal programs focus on helping deploy telecommunications
infrastructure, including broadband, to rural areas. For example, the
largest program at FCC, the Universal Service High Cost program, and
the largest program at RDUP, Telephone Loans and Loan Guarantees
program, help incumbent local exchange carriers pay for the
installation of and upgrades to telecommunications infrastructure, such
as poles, lines, and switches, in rural areas. Table 2 provides
additional information about all 11 programs.
Table 2: Eleven Federal Programs Supporting Infrastructure of
Telecommunications Deployment, Including Broadband:
Broadband infrastructure deployment programs:
Responsible agency: Rural Development, Utilities Program;
Program: Rural Broadband Access Loans and Loan Guarantees Program;
Description: Provides loans (and loan guarantees) to eligible
applicants, including telephone companies, telephone cooperatives,
municipalities, nonprofit organizations, and tribes, to deploy
infrastructures that provide broadband service in rural communities
that meet the program's eligibility requirements;
Funding amount, and fiscal or calendar year, funding given: $297.9
million; Fiscal year 2008[A].
Responsible agency: Rural Development, Utilities Program;
Program: Community Connect Grant Program;
Description: Provides community access to broadband services in
unserved areas through a one-time grant to such organizations as
tribes, cooperatives, private companies, and universities, and uses the
infrastructure built by the grant to create opportunities for continued
improvement;
Funding amount, and fiscal or calendar year, funding given: $13.4
million; Fiscal year 2008.
Telecommunications infrastructure deployment programs:
Responsible agency: Rural Development, Utilities Program;
Program: Telephone Loans and Loan Guarantees Program;
Description: Provides long-term-direct and; guaranteed loans to
qualified organizations, often incumbent local exchange carriers that
finance voice telephone service. Since 1995, every telephone line this
program has constructed also has been capable of providing broadband
service using digital subscriber line (DSL) technology;
Funding amount, and fiscal or calendar year, funding given: $685.2
million; Fiscal year 2008.
Responsible agency: Rural Development, Utilities Program;
Program: Distance Learning and Telemedicine Loans and Grants Program;
Description: Provides loans and grants to rural community facilities
(e.g., schools, libraries, hospitals, and tribal organizations) for
advanced telecommunications systems that can provide health care and
educational benefits to rural areas;
Funding amount, and fiscal or calendar year, funding given: $29.8
million; Fiscal year 2008.
Responsible agency: Federal Communications Commission;
Program: Universal Service High Cost Program;
Description: Provides funding to eligible telecommunications carriers
to help pay for telecommunications services in high-cost, rural, and
insular areas so that prices charged to customers are reasonably
comparable across all regions of the nation;
Funding amount, and fiscal or calendar year, funding given: $4.5
billion; Calendar year 2008.
Responsible agency: Federal Communications Commission;
Program: Universal Service Schools and Libraries Program (i.e., E-
rate);
Description: Provides discounts for affordable telecommunications and
Internet access services to ensure that schools and libraries have
access to affordable telecommunications and information services;
Funding amount, and fiscal or calendar year, funding given: $1.8
billion; Calendar year 2008.
Responsible agency: Federal Communications Commission;
Program: Universal Service Rural Health Care Pilot Program;
Description: Provides funds to cover 85 percent of the cost of
constructing 66 statewide or regional broadband telehealth networks in
42 states and 3 U.S.territories and of connecting those projects to
dedicated nationwide; broadband telehealth networks and the public
Internet;
Funding amount, and fiscal or calendar year, funding given: $13.05
million committed for funding year 2008 (July 1 to June 30).
Responsible agency: Appalachian Regional Commission;
Program: Telecommunications Initiative;
Description: Provides funds for projects that enable communities to
capitalize on broadband access, such as distance learning,
telehealth/telemedicine, e-government, and e-business applications and
workforce development;
Funding amount, and fiscal or calendar year, funding given: $3.5
million; Fiscal year 2008.
Responsible agency: Delta Regional Authority;
Program: Delta Area Economic Development;
Description: Grants for self-sustaining economic development projects
of eight states in Mississippi Delta region;
Funding amount, and fiscal or calendar year, funding given: $687,000
Fiscal year 2008.
Responsible agency: Economic Development Administration;
Program: Economic Development Facilities and Public Works;
Description: Provides funding for construction of infrastructure in
areas that are not attractive to private investment; most funding is
for water and sewer infrastructure but some has been designated for
communications projects;
Funding amount, and fiscal or calendar year, funding given: $1.3
million; Fiscal year 2008.
Responsible agency: Institute of Museum and Library Services;
Program: Library Services and Technology Act Grants to States, Native
American Tribes, and Organizations That Primarily Serve and Represent
Native Hawaiians;
Description: Provides funds for a wide range of library services
including installation of fiber and wireless networks that provide
access to library resources and services;
Funding amount, and fiscal or calendar year, funding given: $164.4
million Fiscal year 2008[B].
Source: GAO.
Note: The 11 programs do not include the new programs, such as the
Broadband Technology Opportunity Program, that will be implemented in
the coming months with funding from the Recovery Act.
[A] This is the amount that was appropriated only in fiscal year 2008;
it does not include the carry-over authority of $495 million that also
was available in fiscal year 2008.
[B] This amount includes approximately $3 million spent on broadband
deployment.
[End of table]
Although several federal programs provide funding for the deployment of
telecommunications infrastructure, including broadband, there are
processes and procedures in place to help coordinate agency efforts.
One of these is the Office of Management and Budget's financial status
report form, which must be completed by all applicants for federal
funding and requires applicants to disclose sources of funding. Another
is the agency application process, such as the one used by the U.S.
Department of Agriculture (USDA)/RDUP, which states that applicants
must list on their application all sources of federal funding they are
currently receiving. Agencies also work closely together, keeping each
other informed of current programs and applicants. For example,
officials at the Economic Development Administration (EDA) told us that
EDA coordinates with RDUP to help establish connections between
broadband infrastructures deployed in rural areas, which RDUP can fund,
while EDA itself funds infrastructure in more urban areas, which RDUP
is prohibited from supporting. Another example of cooperation between
agencies is evident in the Web sites. One site dedicated to broadband
opportunities in rural America is a joint initiative of FCC and USDA.
This site, hosted by FCC, lists programs overseen by USDA as well as
FCC, both of which provide funding for broadband deployment in rural
areas. Another Web site, used by the Appalachian Regional Commission,
provides information about the numerous federal agencies with which the
Commission works in the process of administering grants.
In addition to these 11 programs that fund the deployment of
telecommunications infrastructure, other federal programs fund various
aspects of broadband technology or use, but do not specifically support
the deployment of infrastructure. For example, the Department of
Education as well as the Institute of Museum and Library Services have
programs that provide financial assistance for telecommunications
development, but program officials told us these programs are used to
develop training for using broadband or to purchase content requiring
broadband access, not for broadband deployment. (Appendix III provides
information on these other federal programs.) Finally, other federal
agencies fund broadband infrastructure deployment, but this
infrastructure is not for public access. For example, the Department of
Defense developed its own nonpublic broadband communications network.
Stakeholders Credit Federal Programs with Advancing Broadband
Deployment, but Said More Investment Is Required to Reach Goal of
Universal Availability:
Industry stakeholders credit federal programs with helping to increase
the deployment of broadband infrastructure throughout the United
States. In particular, stakeholders noted that FCC's Universal Service
High Cost Program and its Universal Service Schools and Libraries (E-
Rate) Program, as well as all of RDUP's loans and grants programs have
been critical in increasing broadband deployment, especially in rural
areas. For example, one industry representative credited FCC's
Universal Service High Cost program with helping to finance fiber
deployment in rural areas; two industry representatives credit RDUP's
programs with helping to deploy broadband, with one representative
crediting RDUP's programs with increasing broadband deployment by
lowering broadband costs. State officials we interviewed expressed
similar views on these programs. For example, Arkansas officials said
that federal assistance from RDUP had been useful in deploying
broadband to rural and economically challenged areas of their state.
Despite the gains achieved through these programs, provider
representatives and consumer advocates both told us that additional
federal investment--through such mechanisms as loans, grants, or tax
incentives--will likely be required to make broadband universally
available. Industry representatives estimate that roughly 90 percent of
Americans now have access to broadband at home, work, or through other
community access points. However, getting broadband to the remaining 10
percent will be expensive, primarily because they live in rural areas.
Representatives of provider companies told us that the cost of
deploying broadband infrastructure in rural, low-density areas is the
reason some homes do not have access. According to one representative,
providing wireline service to the last 5 percent of homes will be too
expensive; in low-density areas, he said it would make more sense to
provide service via some type of community access program or wireless
infrastructure. Although a lack of detailed information on the current
state of deployment makes it difficult to determine the costs of
deploying broadband infrastructure to unserved or underserved areas,
estimates range from under $10 billion to over $30 billion.[Footnote
28] Several factors can influence the cost of deployment, including the
terrain, speed of the service provided, and technology employed (e.g.,
wireline or wireless technology).[Footnote 29] Because companies may
not earn a sufficient return on their investment, some industry
representatives and state Chief Information Officers (CIO) told us the
federal government would likely need to subsidize broadband deployment
to certain unserved or underserved areas to achieve universal access.
Additional federal investments in broadband deployment, however, do not
necessarily guarantee increased adoption. Representatives from four
organizations that provide broadband told us that between 80 percent
and 90 percent of the residences in their service areas had access to
broadband, but fewer than 60 percent subscribed; for some providers,
the subscribership rate was less than 40 percent. A recent study on
broadband subscribership found similar patterns. Specifically, the Pew
Internet and American Life Project found that 75 percent of Americans
use the Internet; 57 percent use the Internet at home through
broadband, 9 percent use the Internet at home through dial-up
connections, and 8 percent use the Internet from work or the library.
[Footnote 30] The report also found that some Americans, particularly
elderly or low-income persons, choose not to use the Internet, even
when broadband technology is available. The Pew report identified
several reasons why people choose not to use the Internet, including
cost and lack of interest.
The Recovery Act Provides Funds to Increase Broadband Availability and
Establishes New Requirements for FCC and NTIA:
The Recovery Act provides $7.2 billion to increase broadband
availability in the United States and establishes universal access to
broadband capability as a national goal. More specifically, the
Recovery Act provides funding for (1) NTIA to develop a broadband
inventory map; (2) FCC to develop a national broadband plan; (3) NTIA,
in consultation with FCC, to establish a grants program--referred to as
the Broadband Technology Opportunities Program--to expand broadband
services to rural and underserved areas and improve access to broadband
by public safety agencies; and (4) RDUP to issue loans, loan
guarantees, and grants to increase rural broadband availability. The
Recovery Act further requires that FCC, in developing the national
broadband plan, include benchmarks, a detailed strategy for achieving
affordable broadband service, and an evaluation of the progress of
projects funded through the Recovery Act. Although the Recovery Act
assigns lead responsibilities among the agencies for these different
broadband initiatives, these responsibilities are not mutually
exclusive. The agencies will need to take each other's efforts into
account while carrying out their individually assigned tasks. For
example, NTIA's broadband inventory data will enable FCC to identify
the areas with the largest unserved or underserved populations,
allowing FCC to tailor the plan it develops accordingly.[Footnote 31]
Given their overlapping responsibilities, it will be important for FCC,
RDUP, and NTIA to coordinate their efforts. We have previously reported
on the importance of coordinating federal efforts, especially when
these efforts target the same population, to prevent duplication and
fragmentation of effort.[Footnote 32] This potential for overlap and
fragmentation underscores the importance for the federal government of
developing the capacity to more effectively coordinate crosscutting
program efforts.[Footnote 33] Furthermore, we have noted that agencies
can enhance and sustain their collaborative efforts by developing a
strategy that includes necessary elements for a collaborative working
relationship, such as defining and articulating a common outcome;
identifying and addressing needs by leveraging resources; agreeing on
roles and responsibilities; establishing compatible policies,
procedures, and other means to operate across agency boundaries; and
developing mechanisms to monitor, evaluate, and report on results. In
commenting on a draft of this report, OSTP stated that the current
administration recognizes the need for extensive coordination among the
agencies.
The Broadband Policies of a Number of Other OECD Nations with Higher
Broadband Subscribership Are More Detailed Than U.S. Market-Based
Policy:
A number of the OECD nations that lead the United States in
subscribership have broadband policies that are more detailed than the
U.S. policy and often include timelines, action plans, and some
performance metrics. For example:
* South Korea's 2006 E-Korea Master Plan has established a goal that
every household, regardless of income, is to be equipped with access to
the Internet, with a minimum transmission speed of 1 Mbps. The plan
created the following objectives: (1) maximize the ability of all
citizens to use information and communication technologies to actively
participate in the information society, (2) strengthen global
competitiveness, (3) realize a smart government structure with high
transparency and productivity by increasing the use of information and
communication technologies, (4) facilitate continued economic growth by
promoting the information technology industry and advancing the
information structure, and (5) become a leader in the global
infrastructure by taking a major role in international cooperation.
South Korea's plan also established timelines for online services to be
expanded to include all civil services and customized digital civil
services by 2006, policy plans to achieve a 90 percent penetration rate
for the entire population by 2006, and an evaluation system that
measured the information utilization and communications technology
needed to meet those objectives. Embassy officials noted that as of
2008, 99.82 percent of households in Korea have broadband access.
* Finland's National Broadband Strategy calls for making broadband
available to 93 percent of the country's residents by 2009 and
established the following goals: (1) promote competition within and
between all communications networks, (2) promote the provision of
electronic services and content to stimulate demand for broadband
services, and (3) continue and develop special support measures in
those areas in which there is insufficient demand for the commercial
supply of broadband facilities. Finland's written policy also
identified 50 individual measures with timelines and responsible
agencies for use as metrics for assessing progress in achieving the
defined goals. For example, the Ministry of Education was responsible
for ensuring that all schools have access to reasonably priced and
efficient telecommunications by 2008. Embassy officials noted that
except for the most remote schools in the far north, all schools have
broadband access.
In contrast, the current U.S. policy, which is articulated in multiple
sources, does not include performance measures and an action plan for
implementation. The attributes of the other nations' written policies
align with the framework set forth by Government Performance and
Results Act of 1993 (GPRA).[Footnote 34] GPRA stresses the importance
of having clearly stated objectives, strategic and performance plans,
goals, performance targets, and measures in order to improve a
program's effectiveness, accountability, and service delivery.
Specifically, performance measures allow an agency to track its
progress in achieving intended results. Performance measures also can
help inform management decisions about such issues as the need to
redirect resources or shift priorities. In addition, stakeholders, such
as telecommunication providers and consumer groups, can use performance
measures to hold agencies accountable for results. In commenting on a
draft of this report, OSTP said it was working with several other
agencies to develop such metrics.
Several countries such as South Korea, Canada, and Sweden have provided
financial support to spur broadband deployment in rural or underserved
areas, provided incentives to private companies to build networks, and
enacted a number of efforts to increase broadband subscribership and
digital literacy. For example, the South Korean government established
several agencies to promote broadband access in both the public and the
private sector by, for instance, providing training to all citizens,
including the elderly and disabled, to increase their "digital
literacy" (i.e., knowledge needed to use the Internet). Canada, in
2002, provided support for rural access through the Broadband for Rural
and Northern Development (BRAND) program, with funding of $80 million
to eligible communities for broadband infrastructure projects.[Footnote
35] BRAND recommended that the government complement market forces with
well-targeted government initiatives, particularly focusing on
communities in areas that the market is unlikely to serve. Similarly,
Sweden provided subsidies for broadband infrastructure development
through grants and tax relief, including funding for rural broadband
deployment. In addition, the Swedish government increased demand for
broadband through digital literacy programs for small and medium-sized
businesses, libraries, and schools.
States Vary in Their Approaches to Increasing Broadband Deployment:
Officials from 48 states and the District of Columbia reported wide
variation in their approaches to increasing the level of broadband
deployment in their states. More than half of the state CIOs (or their
designees) we spoke with told us they were aware of gaps in broadband
deployment within their states. To address these gaps, CIOs said they
were considering or had taken a variety of actions, including mapping,
planning, and allocating funds.
* Mapping broadband deployment. Twelve state CIOs reported that their
states have mapped broadband deployment, and 2 of these states,
California and Massachusetts, have each mapped both the speed and the
availability of broadband in their state and placed the information on
their state's Web site. CIOs from another 13 states told us they were
planning to map their states in the near future.
* Developing broadband deployment plans. Twelve state CIOs told us
their states have publicly available broadband deployment plans, some
of which include strategies to increase deployment. For example, Utah's
plan provides grants to providers to increase the deployment of
broadband in rural areas. Vermont has created the Vermont
Telecommunications Authority, designed to build public-private
partnerships with service providers, and is working on cellular and
broadband models with the goal of 100 percent access by 2010. Lastly,
Maryland has defined regions of the state in need of broadband and has
provided some funding to the Maryland Broadband Cooperative for the
installation of fiber backbone infrastructure. In addition to these
existing plans, CIOs from 6 states said they are in the process of
developing broadband deployment plans.
* Allocating funds for broadband deployment. Fourteen state CIOs told
us their states had provided some type of financial support to local
providers, state cooperatives, or state agencies for broadband
deployment, ranging from bonds to grants to appropriations from state
budgets. In addition, some states have provided tax incentives to local
providers for the provision of broadband, particularly in unserved or
underserved areas. For example, Mississippi provides investment tax
credits to those companies investing in the state, ranging from 5
percent to 15 percent over 10 years, and gives the highest credits for
investment in the least populous areas of the state.
* Stimulating demand for broadband. CIOs in several states expressed
concern about the low level of broadband subscribership in their states
and have taken action to stimulate demand. For example, Nebraska is
providing information and training to people in rural communities using
the Nebraska Business Information Technology mobile classroom for high-
speed technology education. South Carolina, to encourage broadband
subscribership, has a program to distribute laptops among students in
grades 9 through 12 and also offers computer training in its continuing
education classes.
Conclusions:
With extensive private-sector investment and minimal government
intervention, some type of broadband infrastructure has been deployed
to approximately 90 percent of U.S. households. Bringing this
infrastructure to the remaining unserved or underserved regions will,
by most estimates, cost tens of billions of dollars and will likely
require federal investment because of the low profit potential in these
areas. The recently enacted American Recovery and Reinvestment Act
establishes universal access to broadband as a goal and provides
federal funding to RDUP and NTIA for grants and loans, to NTIA for
mapping broadband infrastructure, and to FCC for developing a national
plan for broadband deployment. These efforts will help guide federal
involvement in deploying broadband in the coming years. Additionally,
the efforts complement each other. NTIA's data will allow all agencies
to identify and cost-effectively target federal funds to the areas with
the largest unserved or underserved populations and will inform the
plan developed by FCC. The Recovery Act requires that the national
broadband plan include some of the elements we found in written
policies of OECD nations with higher broadband subscribership,
including goals and benchmarks. To achieve transparency and
accountability in the use of federal funds, FCC will need to include
additional elements, such as timelines, specific performance measures,
and clearly defined roles and responsibilities for the responsible
federal agencies. Increasing accountability for achieving intended
results is especially important given the potential costs of expanding
broadband deployment to currently unserved or underserved areas.
Recommendation for Executive Action:
To increase transparency and accountability for results, we recommend
that the Chairman of FCC, in developing the national broadband plan:
* consult the Secretary of Agriculture and the Assistant Secretary of
Commerce and, at a minimum, specify performance goals and measures for
broadband deployment, including time frames for achieving the goals
and:
* work with the Secretary of Agriculture and the Assistant Secretary of
Commerce to define the roles and responsibilities for each of these
agencies in carrying out the plan.
Agency Comments:
We provided a draft of this report to FCC, the Department of Commerce,
OSTP, and the Department of Agriculture for their review and comment.
FCC and the Department of Commerce provided written comments, which are
reprinted in appendixes IV and V, respectively. Both agencies
emphasized the current administration's efforts to bring broadband
technology to all Americans and discussed the role of the Recovery Act
in realizing this goal. In its written comments, FCC recognized the
need for a more definitive policy and agreed with our recommendations
that performance measures and greater coordination to define roles and
responsibilities are important to its implementation. In its written
comments, the Department of Commerce emphasized that it is working
closely with the Department of Agriculture and FCC to ensure the
success of the President's broadband initiatives and noted that, to
some extent, the Recovery Act defined the roles and responsibilities of
each agency involved in the development and implementation of a
national broadband deployment plan. We recognize in the report that the
Recovery Act assigns lead responsibilities to the agencies for
different broadband initiatives; however, given that these
responsibilities are not mutually exclusive, we continue to believe
further delineation of the roles and responsibilities is warranted.
FCC, the Department of Commerce, and OSTP, through the National
Economic Council, provided technical comments, which we incorporated as
appropriate. The Department of Agriculture responded through RDUP that
it did not have any comments on the draft report.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the Chairman
of the Federal Communications Commission and other interested parties.
In addition, the report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
If you have any questions about this report, please contact me at (202)
512-2834 or goldsteinm@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. Contact information and major contributors to this
report are listed on appendix VI.
Sincerely yours,
Signed by:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Comparison of Various Broadband Organization Rankings:
Although the Organisation for Economic Co-operation and Development's
(OECD) rankings are an important source of information on the status of
broadband in many countries, OECD is not the only organization that
measures broadband deployment and subscribership, and the OECD metric
we have discussed--subscribership per 100 inhabitants--is not the only
available metric. Other ranking organizations include the Information
Technology and Innovation Foundation (ITIF)[Footnote 36] and Web Site
Optimization,[Footnote 37] and their metrics include the percentage of
households that subscribe to broadband and the percentage of households
that have access to broadband. In addition, OECD uses other metrics to
assess the status of broadband in many countries, such as broadband
affordability and download speeds. Figure 1 compares broadband rankings
for the United States and other OECD countries. The figure includes
OECD's second quarter 2008 rankings of subscribership per 100
inhabitants and ITIF's and Web Site Optimization's rankings. The figure
shows that while the United States ranks 15th in the number of
subscribers per 100 inhabitants, it ranks 10th and 11th in the other
reports in the percentage of households that subscribe to or have
access to broadband.
As the figure indicates, countries' rankings vary with the metric used.
For example, while Japan ranks second in ITIF's composite score of
subscribership, speed, and price, it places 17th in OECD's June 2008
ranking of subscribership per 100 inhabitants. Similarly, South Korea,
which ITIF ranks first, with 93 percent household penetration, is 7th
in OECD's June 2008 ranking of subscribers per 100 inhabitants. In an
April 24, 2007, letter to OECD, U.S. Ambassador David Gross took issue
with the methodology on which OECD's new ranking was based,
particularly because it does not include people who gain access to
broadband services through multiple platforms and access points, such
as college students and others who use "Wi-Fi hotspots."[Footnote 38]
Figure 1: Comparison of Country Rankings on OECD, ITIF, and Website
Optimization Broadband Indexes:
[Refer to PDF for image: table]
Nation: Denmark
OECD ranking: 1;
ITIF ranking: 7;
OECD broadband penetration per 100 inhabitants: 37;
ITIF household penetration (subscribers per household): 0.76;
Website optimization household penetration (percentage): 80%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: Netherlands;
OECD ranking: 2;
ITIF ranking: 4;
OECD broadband penetration per 100 inhabitants: 36;
ITIF household penetration (subscribers per household): 0.77;
Website optimization household penetration (percentage): 80%;
Countries' percentage of total OECD broadband subscribers: 2%.
Nation: Norway;
OECD ranking: 3;
ITIF ranking: 9;
OECD broadband penetration per 100 inhabitants: 33;
ITIF household penetration (subscribers per household): 0.68;
Website optimization household penetration (percentage): 75%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: Switzerland;
OECD ranking: 4;
ITIF ranking: 10;
OECD broadband penetration per 100 inhabitants: 32;
ITIF household penetration (subscribers per household): 0.74;
Website optimization household penetration (percentage): 80%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: Iceland;
OECD ranking: 5;
ITIF ranking: 8;
OECD broadband penetration per 100 inhabitants: 32;
ITIF household penetration (subscribers per household): 0.83;
Website optimization household penetration (percentage): 80%;
Countries' percentage of total OECD broadband subscribers: less than
1%.
Nation: Sweden;
OECD ranking: 6;
ITIF ranking: 6;
OECD broadband penetration per 100 inhabitants: 32;
ITIF household penetration (subscribers per household): 0.54;
Website optimization household penetration (percentage): 65%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: South Korea;
OECD ranking: 7;
ITIF ranking: 1;
OECD broadband penetration per 100 inhabitants: 31;
ITIF household penetration (subscribers per household): 0.93;
Website optimization household penetration (percentage): 97%;
Countries' percentage of total OECD broadband subscribers: 6%.
Nation: Finland;
OECD ranking: 8;
ITIF ranking: 3;
OECD broadband penetration per 100 inhabitants: 31;
ITIF household penetration (subscribers per household): 0.61;
Website optimization household penetration (percentage): 69%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: Luxembourg;
OECD ranking: 9;
ITIF ranking: 14;
OECD broadband penetration per 100 inhabitants: 28;
ITIF household penetration (subscribers per household): 0.56;
Website optimization household penetration (percentage): 77%;
Countries' percentage of total OECD broadband subscribers: less than
1%.
Nation: Canada;
OECD ranking: 10;
ITIF ranking: 11;
OECD broadband penetration per 100 inhabitants: 28;
ITIF household penetration (subscribers per household): 0.65;
Website optimization household penetration (percentage): 72%;
Countries' percentage of total OECD broadband subscribers: 4%.
Nation: United Kingdom;
OECD ranking: 11;
ITIF ranking: 13;
OECD broadband penetration per 100 inhabitants: 28;
ITIF household penetration (subscribers per household): 0.55;
Website optimization household penetration (percentage): 67%;
Countries' percentage of total OECD broadband subscribers: 7%.
Nation: Belgium;
OECD ranking: 12;
ITIF ranking: 17;
OECD broadband penetration per 100 inhabitants: 26;
ITIF household penetration (subscribers per household): 0.57;
Website optimization household penetration (percentage): 61%;
Countries' percentage of total OECD broadband subscribers: 1%.
Nation: France;
OECD ranking: 13;
ITIF ranking: 5;
OECD broadband penetration per 100 inhabitants: 26;
ITIF household penetration (subscribers per household): 0.54;
Website optimization household penetration (percentage): 66%;
Countries' percentage of total OECD broadband subscribers: 7%.
Nation: Germany;
OECD ranking: 14;
ITIF ranking: 16;
OECD broadband penetration per 100 inhabitants: 26;
ITIF household penetration (subscribers per household): 0.47;
Website optimization household penetration (percentage): 58%;
Countries' percentage of total OECD broadband subscribers: 9%.
Nation: United States;
OECD ranking: 15;
ITIF ranking: 15;
OECD broadband penetration per 100 inhabitants: 25;
ITIF household penetration (subscribers per household): 0.57;
Website optimization household penetration (percentage): 67%;
Countries' percentage of total OECD broadband subscribers: 30%.
Nation: Australia;
OECD ranking: 16;
ITIF ranking: 12;
OECD broadband penetration per 100 inhabitants: 24;
ITIF household penetration (subscribers per household): 0.59;
Website optimization household penetration (percentage): 78%;
Countries' percentage of total OECD broadband subscribers: 2%.
Nation: Japan;
OECD ranking: 17;
ITIF ranking: 2;
OECD broadband penetration per 100 inhabitants: 23;
ITIF household penetration (subscribers per household): 0.55;
Website optimization household penetration (percentage): 61%;
Countries' percentage of total OECD broadband subscribers: 12%.
Source: GAO presentation of Organization for Economic Cooperation and
Development (OECD), Information Technology and Innovation Foundation
(ITIF) and Website Optimization data.
[End of figure]
[End of section]
Appendix II: Scope and Methodology:
To determine the current federal broadband policy, we interviewed
officials at the Office of Science and Technology Policy (OSTP), the
National Telecommunications and Information Administration (NTIA), and
the Federal Communications Commission (FCC), and reviewed recent
reports by FCC and NTIA.[Footnote 39] To learn about the broadband
policies of those countries that the OECD, in June 2008, ranked ahead
of the United States in broadband subscribership per 100 residents, we
contacted each country's embassy in the United States.[Footnote 40] We
requested information from embassy officials on whether their country's
current broadband policy included the following: a written policy, a
timeline, an action plan, goals, and performance measures. We selected
these items because the Government Performance and Results Act of 1993
(GPRA) emphasizes these elements as important for the effective and
efficient management of government programs.
To determine the principal federal programs that support the deployment
of broadband infrastructure, we reviewed a Congressional Research
Service (CRS) report to Congress, Broadband Internet Access and the
Digital Divide: Federal Assistance Programs, updated June 4, 2008,
which lists federal domestic assistance that can be associated with
telecommunications development, including broadband deployment. This
list includes 11 federal agencies and 23 federal programs. After an
initial review of this list and some preliminary audit work, we reduced
this list to 19 programs administered by a total of 8 federal agencies.
We interviewed federal officials at all 8 agencies listed by CRS and
reviewed information about their programs and determined that 5
agencies and commissions overseeing a total of 10 programs specifically
fund the deployment of telecommunications infrastructure, including
broadband infrastructure.
To obtain various stakeholders' views on how federal programs have
affected broadband infrastructure deployment, we interviewed officials
of associations that represented wireless providers and
telecommunications and cable companies, large and small, urban and
rural. We also interviewed officials of organizations representing
consumers, including those who are economically disadvantaged. For both
provider and consumer representatives, we developed and used sets of
questions about their views on current federal policy and programs, the
current status of broadband deployment and subscribership, the level of
competition, the reasons for the lack of access to broadband in some
areas, and suggestions for improvements in the current federal
programs. The organizations and associations whose representatives we
interviewed are as follows:
Alliance for Public Technology (APT):
American Cable Association:
Connected Nation:
Consumer Federation of America:
National Association of State Utility Consumer Advocates (NASUCA)
One Economy:
Organization for the Promotion and Advancement of Small Telephone
Companies (OPASTCO):
PEW Internet Project:
Rural Independent Competitive Alliance (RICA):
The Wireless Association (CTIA):
Wireless Internet Service Providers Association (WISPA):
To learn the states' views on the federal government's efforts to
increase broadband infrastructure deployment as well as actions the
states have taken to encourage broadband deployment, we developed a set
of questions in consultation with GAO methodologists and used them to
interview each state's Chief Information Officer (CIO) or designee. We
interviewed the CIOs in 48 of the 50 states and the District of
Columbia. Two states were unavailable because of internal issues. We
conducted these interviews from August 15, 2008, until February 6,
2009, and sought information on state officials' views on the current
federal broadband policy and programs, how they could be improved, and
what actions the state governments had taken to increase broadband
deployment. We selected the CIOs as the most knowledgeable source of
information about state broadband activities based on our understanding
that broadband is not regulated by state utility commissions and our
conversation with representatives of the National Association of State
Chief Information Officers.
We conducted this performance audit from March 2008 through May 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix III: Agencies That Fund Some Aspects of Telecommunications,
but Not Infrastructure:
To determine the principal federal programs that support the deployment
of broadband infrastructure, we reviewed the CRS report that identifies
federal domestic assistance that can be associated with
telecommunications development, including broadband deployment.
[Footnote 41] This report identified a total of 23 programs
administered by 11 agencies. Based on information in the CRS report and
initial conversations with agency representatives, we removed 7
programs and 3 agencies: We determined that 2 programs should not be
included because they did not provide funding for telecommunications
infrastructure that could be accessed by any member of the public; we
eliminated 3 more programs because the agencies told us they no longer
fund any telecommunications infrastructure; lastly we removed 2
programs by subsuming them into another program, which we added at the
advice of the agency. We then added 6 more programs for a total of 7
additions to the original list provided by CRS. This left a total of 23
programs administered by 8 agencies. We interviewed federal officials
at all 8 agencies and examined program documentation to determine
whether these programs provide financial assistance for broadband
deployment. Based on our analysis, we determined that 11 programs
administered by 6 agencies do provide such funding, as shown in table 2
in the main report, and 12 programs administered by 3 agencies do not
(ILMS programs are listed in both tables). Table 3 identifies the
agencies and programs that do not fund telecommunications
infrastructure.
Table 3: Agencies that Fund Some Aspect of Telecommunications, but Not
Infrastructure:
Responsible agency: Department of Education;
Program: Education Technology State Grants;
Description: Grants to states or school districts to use technology to
improve student achievement; improve technological literacy of
students, and integrate technology into the curriculum;
Reason for exclusion: Does not fund broadband deployment.
Responsible agency: Department of Education;
Program: Star Schools;
Description: Grants to use information technology to improve teaching
and learning of core academic subjects in schools;
Reason for exclusion: Does not fund broadband deployment.
Responsible agency: Department of Education;
Program: Ready to Teach;
Description: Grants to carry out a national telecommunications-based
program to improve teaching in core curriculum areas;
Reason for exclusion: Grant money not intended for broadband
deployment. Grant money is used for development of online professional
development programs.
Responsible agency: Department of Education;
Program: Special Education--Technology and Media Services for
Individuals with Disabilities;
Description: Supports development and application of technology and
education media activities for disabled children and adults;
Reason for exclusion: Grant money not intended for broadband
deployment. Grant money supports creation of special educational
materials and technologies, such as materials and technologies
accessible to and usable by students with physical and sensory
disabilities.
Responsible agency: Department of Health and Human Services, Health
Resources and Services Administration;
Program: Telehealth Network Grant Program;
Description: Provides grant funds to rural health care networks to
develop telehealth services that use broadband infrastructure;
Reason for exclusion: Generally does not support deployment of
broadband infrastructure but does pay for the purchase of advanced
telecommunications services.
Responsible agency: Department of Health and Human Services, Health
Resources and Services Administration;
Program: Telehealth Resource Center Grant Program;
Description: Provides grants that support establishment and development
of telehealth resource centers, which assist health care organizations,
health care networks, and health care providers in the implementation
of cost-effective telehealth programs to serve rural and medically
underserved areas;
Reason for exclusion: Generally does not support deployment of
broadband infrastructure.
Responsible agency: Department of Health and Human Services, Health
Resources and Services Administration;
Program: Licensure Portability Grant Program;
Description: Provides support for state professional licensing boards
to develop and implement state policies that will reduce statutory and
regulatory barriers to telemedicine;
Reason for exclusion: Generally does not support deployment of
broadband infrastructure.
Responsible agency: Department of Health and Human Services, National
Library of Medicine;
Program: Medical Library Assistance;
Description: Provides funds to train professional personnel and
strengthen library information services. Facilitates access to and
delivery of health science information. Plans and develops advanced
information networks. Supports certain biomedical publications.
Conducts research in medical informatics and related sciences;
Reason for exclusion: Generally does not support deployment of
broadband infrastructure.
Responsible agency: Institute of Museum and Library Services, National
Foundation on the Arts and Humanities;
Program: National Leadership Grants;
Description: Supports projects with national impact that advance the
ability of museums and libraries to preserve culture, heritage, and
knowledge and to enhance learning;
Reason for exclusion: Does not support deployment of broadband
infrastructure.
Responsible agency: Institute of Museum and Library Services, National
Foundation on the Arts and Humanities;
Program: Laura Bush 21st Century Librarian Program;
Description: Supports project to develop library leaders and recruit
and educate the next generation of librarians;
Reason for exclusion: Does not support deployment of broadband.
Responsible agency: Institute of Museum and Library Services, National
Foundation on the Arts and Humanities;
Program: 21st Century Museum Professionals;
Description: Improve the knowledge and skills of museum professionals;
Reason for exclusion: Does not support deployment of broadband.
Responsible agency: Institute of Museum and Library Services, National
Foundation on the Arts and Humanities;
Program: Museums for America;
Description: Supports projects that build museums' capacity to serve
their communities;
Reason for exclusion: Does not support deployment of broadband.
Source: GAO and CRS.
[End of table]
[End of section]
Appendix IV: Comments from the Federal Communications Commission:
Federal Communications Commission:
Office Of The Chairman:
Washington:
May 1, 2009:
Mr. Mark L. Goldstein:
Director, Physical Infrastructure:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Goldstein:
Thank you for the opportunity to review the draft Government
Accountability Office (GAO) report regarding federal broadband
deployment policy. We welcome GAO's suggestions on advancing the
national broadband plan required by the American Recovery and
Reinvestment Act.[Footnote 42]
Your draft report takes note of the country's poor standing in the
international rankings of broadband penetration. I have been concerned
for many years that when it comes to broadband, the United States
continues to be far too low in the global rankings. Broadband can be
the great enabler that restores America's economic well-being and opens
doors of opportunity for all Americans to pass through, no matter who
they are, where they live, or the particular circumstances of their
individual lives. And yet, as a country, we have been well out of the
lead for some time in getting this essential technology out to our
citizens. I believe this, in large part, is due to a failure to develop
a national plan for broadband advancement.
As your draft report finds, the last administration had a free-market
approach to broadband regulation. There was some build-out under this
approach, but not nearly enough. Quite simply, the free market alone
cannot solve the problems we face. We have gotten away from our all-
American tradition of handling infrastructure challenges through public-
private partnership, such as the ones that built this country's roads,
turnpikes, canals, harbors, railroads and highways. In order to succeed
in bringing modem communications to all of our citizens, we must again
employ such a concerted approach. I commend the Obama administration
for its leadership in establishing broadband as a priority and
recognizing that achieving the country's full potential in this area
will require a coordinated, multi-faceted effort.
The development of a national plan for achieving universal, nationwide
access to broadband capability is a central element of the ongoing
federal efforts directed at broadband. I applaud the Congress for
mandating that this country develop a national broadband plan by
February 2010. I consider this mandate to be one of the most important
charges that Congress has bestowed upon this Commission since passage
of the Telecommunications Act of 1996, and we are dedicating ourselves
to a fulsome, forward-looking, and data-driven approach to making this
nation a beacon to the world in broadband deployment and use. The
funding that the Recovery Act provided for grants and loans for
particular broadband projects is a very important down-payment on this
nation's broadband future, and will inform us also as we develop a long-
term national broadband plan.
In its draft report, GAO recommends that, in developing the national
broadband plan, the Chairman of the Federal Communications Commission
(Commission) consult with the Secretary of Agriculture and the
leadership of the National Telecommunications and Information
Administration (NTIA) and that, working with those leaders, at a
minimum: 1) specify performance goals and measures for broadband
deployment, including time-frames for achieving them, and 2) define the
roles and responsibilities for each of these agencies in carrying out
the plan.[Footnote 43] I am pleased to note that federal interagency
coordination of broadband-related efforts under the Recovery Act and
other legislation is well underway. Early on, the Obama administration
formed an interagency working group to bring relevant agencies together
to talk about broadband issues of common interest. The working group
includes representatives from NTIA and the U.S. Department of
Agriculture (USDA), as well as the Commission and others. The
continuing dialogue facilitated by this forum will enable the
Commission and other agencies with broadband-related obligations under
the Recovery Act to carry out their efforts in a coordinated fashion,
consistent with the recommendations in the draft report.
With regard to the Commission's efforts to develop a plan, on April 8,
we unanimously voted to initiate a Notice of Inquiry on the national
broadband plan, seeking comment on a wide range of issues associated
with its development.[Footnote 44] Many of these issues pertain to the
subject matter of the draft report's recommendations to the Commission:
creating benchmarks for meeting the Recovery Act's mandate of universal
access to broadband capability nationwide,[Footnote 45] measuring
progress under the national broadband plan,[Footnote 46] and
coordinating Commission efforts with those of other agencies tasked
with broadband-related obligations under the Recovery Act, including
the USDA's Rural Utilities Service (RUS) and NTIA.[Footnote 47] In
particular, the Commission requested comment on how the NTIA grant
programs and the RUS rural broadband programs should inform Commission
analysis and development of the national broadband plan[Footnote 48]
Also in this regard, the Commission asked for comment on the specific
steps agencies should take to cooperate with each other to ensure that
their broadband programs Under the Recovery Act are
consistent.[Footnote 49]
Significantly, the Broadband NOI also referenced the Government
Performance and Results Act, which requires federal agencies to develop
performance measures for major functions and operations,[Footnote 50]
and GAO's previous recommendation that agency plans articulate a
results orientation by creating performance measures that address
important dimensions of a program.[Footnote 51] With regard to the
former, the Commission took note of recent guidance issued by OMB
covering agencies involved in Recovery Act initiatives.[Footnote 52]
This guidance, which was updated on April 3, 2009, requires such
agencies to submit finalized program plans by May 15, 2009 that include
measures of quantifiable outcomes supported by corresponding
quantifiable output measures.[Footnote 53] The Commission is currently
working to develop outcomes and measures for submission to OMB, but has
also sought comment in the Broadband NOI on outcomes and measures that
would be useful in assessing progress toward the goals of a national
broadband plan.[Footnote 54] In the Broadband NOI, the Commission
further requested comment on how progress under the plan can be
measured relative to progress that would have occurred in the absence
of any program, so that we may all better understand the impact of the
program.[Footnote 55]
Comments on the issues raised in the Broadband NOI are due on June 8,
2009, and reply Comments are due on July 7, 2009. We look forward to
reviewing the record in this proceeding to gain insight from all
stakeholders into the best ways to develop and carry out the national
broadband plan. Consistent with the recommendations in the draft
report, we intend to continue coordinating closely with the other
agencies involved in broadband related initiatives as we move forward
with this and other Recovery Act proceedings.
Thank you again for your recommendations. As I have indicated
previously, I view the Commission's charge to spearhead the development
of a national broadband plan as an extraordinarily important one, and
my colleagues and I are determined to give it our best possible effort.
Sincerely,
Signed by:
Michael J. Copps:
Acting Chairman:
[End of section]
Appendix V: Comments from the Department of Commerce:
The Secretary Of Commerce:
Washington, D.C. 20230:
April 29, 2009:
Mr. Mark L. Goldstein:
Director, Physical Infrastructure:
Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Goldstein:
Thank you for the opportunity to comment on the Government
Accountability Office's (GAO) draft report entitled
"Telecommunications: Broadband Deployment Plan Should Include
Performance Goals and Measures to Guide Investment," GAO-09-494. While
the report focused primarily on the broadband policy goals of the
previous administration, I would like to take this opportunity to
reiterate President Obama's vision of bringing the benefits of
broadband technology to all Americans.
As GAO's report recognizes, in February 2009 the President signed the
American Recovery and Reinvestment Act of 2009 (Recovery Act), which
authorized $7.2 billion for the development of a national broadband
plan, the nationwide mapping of broadband service availability, and the
deployment of broadband infrastructure and services to unserved and
underserved areas. To meet the challenge of bringing affordable
broadband to all Americans and to meet the statutory mandates of the
Recovery Act, this Administration has set five goals for broadband
stimulus funding: (1) create jobs; (2) expand broadband access in
America; (3) stimulate investment by requiring grantees that take
Federal money to invest some of their own funds; (4) ensure that our
schools, universities, libraries, community centers, job training
centers, hospitals, and public safety personnel have access to high-
speed broadband service; and (5) encourage demand for broadband access.
The Department of Commerce's National Telecommunications and
Information Administration (NTIA) has a significant role in the
President's broadband initiatives. The Recovery Act authorizes NTIA to
implement the Broadband Technology Opportunities Program (BTOP), a $4.7
billion competitive grants program to expand broadband services to
unserved and underserved areas. Through the BTOP, NTIA will provide
competitive grants to States, nonprofit organizations, and-if it is
determined to be in the public interest-broadband service providers.
NTIA is working to ensure that BTOP is administered effectively and
efficiently. For example, NTIA is focused on creating metrics and
reporting requirements that will ensure that the grants we make are
effective in moving the country closer to the Administration's
broadband goals.
In its draft report, GAO recommends that, to increase transparency and
accountability for results, the Chairman of the Federal Communications
Commission (FCC) should consult with the Secretary of Agriculture and
the Department of Commerce's Assistant Secretary for Communications and
Information in developing a broadband plan which, at a minimum,
specifies performance goals and measures for broadband deployment,
including time frames for achieving the goals. GAO further recommends
that the FCC Chairman work with the Secretary of Agriculture and the
Assistant Secretary for Communications and Information to define the
roles and responsibilities of each of these agencies in carrying out
the plan.
The Recovery Act, to a certain extent, has defined roles for each
agency regarding the development and implementation of a national
broadband plan. The Recovery Act requires NTIA to establish a national
broadband service deployment expansion plan, in consultation with the
FCC, and to develop and maintain a comprehensive nationwide inventory
map of existing broadband service capability and availability. It also
directs NTIA to coordinate with the FCC in establishing non-
discrimination and network interconnection obligations for applicants
under the BTOP grant program. The Recovery Act directs the FCC to
develop a national broadband plan, in consultation with the Department
of Commerce, to ensure that all people of the United States have access
to broadband capability. It provides for the FCC to have access to
mapping data and metrics provided to the Department of Commerce and
other government agencies pursuant to the Broadband Data Improvement
Act, Public Law No. 110-385, for the purpose of developing the national
broadband plan. The Recovery Act also provides new authorization for
the Department of Agriculture's Rural Utilities Service (RUS) to
continue to provide broadband grants, loans, and loan guarantees to
establish broadband service in rural areas without sufficient access to
high-speed broadband service.
I am pleased to report that, in the relatively short amount of time
since the Recovery Act was signed, the Department of Commerce, the
Department of Agriculture, and the FCC have worked very closely to
ensure the success of the President's broadband initiatives. NTIA, the
FCC, and the RUS have coordinated efforts to provide the public with
general information regarding the broadband initiatives, and to receive
input from the public on how the agencies should structure their
respective broadband grant and loan programs.
On March 10, 2009, senior officials from each of these entities held a
kickoff public meeting to discuss aspects of the Recovery Act.
Subsequently, NTIA and the RUS held a series of public meetings,
including field hearings in Flagstaff, Arizona, and Las Vegas, Nevada,
to afford interested Americans the opportunity to help shape the
broadband program so that the stimulus funds can be used efficiently
and effectively. These meetings entailed discussions on specific topics
related to broadband initiatives, including grantee eligibility;
interconnection obligations; definitions of broadband and underserved,
rural, and unserved areas; and the role of the States. Moreover, on
March 12, 2009, NTIA and RUS published a joint Request for Information
seeking comments to assist NTIA in establishing and administering BTOP,
and RUS in implementing its expanded authority under the Recovery Act.
In addition, the FCC recently released a Notice of Inquiry seeking
comment on the development of the national broadband plan to further
implement the President's broadband initiatives. (See In the Matter of
the National Broadband Plan, FCC 09-31, Notice of Inquiry, GN Doc. No.
09-51 (rel. April, 8, 2009))
Thank you again for the opportunity to provide the Department's
comments on this draft report. The Obama Administration is committed to
meeting the challenges and executing the opportunities provided by the
Recovery Act in order to stimulate economic growth, create jobs, and
help lay the foundation for long-term prosperity for all Americans.
Sincerely,
Signed by:
Gary Locke:
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Nikki Clowers and Faye
Morrison, Assistant Directors; Stephen Brown; Elizabeth Curda; Sharon
Dyer; Kevin Egan; Elizabeth Eisenstadt; David Hooper; Hannah Laufe;
Sara Ann Moessbauer; Josh Ormond; Madhav Panwar; and Nancy Zearfoss
made key contributions to this report.
[End of section]
Footnotes:
[1] Telecommunications Act of 1996, Pub. L. No. 104-104, § 706(a), 110
Stat. 56, 153 (1996).
[2] The OECD is a unique forum through which the governments of 30
democracies work together to address the economic, social, and
environmental challenges of globalization.
[3] Taylor Reynolds and Sacha Wunsch-Vincent, Broadband Growth and
Policies in OECD Countries, a special report prepared at the request of
OECD, July 2008, 24-25.
[4] See app. I for more information about the OECD rankings and the
Department of State's views of these rankings.
[5] Pub. L. No. 110-385, title I, 122 Stat. 4096 (2006).
[6] Pub. L. No. 111-5, 123 Stat. 115 (2009).
[7] Officials in two states were unable to accommodate our request for
an interview.
[8] In digital telecommunication, the bit rate is the number of bits
that passes a given point in a telecommunication network in a given
amount of time, usually a second. Thus, a bit rate is usually measured
in some multiple of bits per second--for example, kilobits, or
thousands of bits per second.
[9] There also are low earth orbit satellite providers such as
GlobalStar and Iridium that provide some level of broadband service.
These satellite systems are in a nonstationary orbit and are between
250 and 600 miles in orbit.
[10] Radio spectrum is a natural resource used to provide an array of
wireless communication services. FCC regulates commercial entities' use
of spectrum. With unlicensed spectrum, a number of users without
licenses share a portion of the spectrum, adhering to certain
technological specifications. In contrast, with licensed spectrum, FCC
licenses entities to use a specific portion of the spectrum. GAO,
Telecommunications: Broadband Deployment Is Extensive throughout the
United States, but It Is Difficult to Assess the Extent of Deployment
Gaps in Rural Areas, GAO-06-426 (Washington, D.C.: May 5, 2006).
[11] Pub. L. No. 104-104, § 706(a), 110 Stat. 56, 153 (1996). Section
706(c) of the act describes advanced telecommunications capabilities as
"high-speed, switched, broadband telecommunications capability that
enables users to originate and receive high-quality voice, data,
graphics, and video telecommunications using any technology."
[12] See e.g., FCC-02-77, Mar. 15, 2002, FCC 05-150, Sept. 23, 2005,
and FCC-07-30, Mar. 23, 2007.
[13] See National Cable Telecomm. Ass'n. v. Brand X Internet Services,
545 U.S. 967, 976 (2005) (FCC has jurisdiction to impose additional
regulatory obligations under its Title I ancillary jurisdiction to
regulate interstate and foreign communications).
[14] FCC, however, has relied on its ancillary jurisdiction in
adjudicatory proceedings, for example, in the proceeding in which it
found Comcast in violation of FCC's open-access guidelines. Memorandum
Opinion and Order, Formal Complaint of Free Press and Public Knowledge
Against Comcast Corporation for Secretly Degrading Peer-to-Peer
Applications, FCC 08-183 (Aug. 1, 2008). Comcast filed a petition
appealing this order on Sept. 4, 2008, with the U.S. Court of Appeals
for the D. C. Circuit.
[15] Federal courts have upheld FCC's authority to regulate broadband
Internet service providers under the Communications Assistance for Law
Enforcement Act. Pub. L. No. 103-414, 108 Stat. 4297 (1994). See, e.g.,
American Council on Education v. FCC, 451 F.3d 226 (2006).
[16] See 47 U.S.C. § 157 nt.; see, e.g., Inquiry Concerning the
Deployment of Advanced Telecommunications Capability to All Americans
in a Reasonable and Timely Fashion, and Possible Steps to Accelerate
Such Deployment Pursuant to Section 706 of the Telecommunications Act
of 1996, GN Docket No. 07-45, Fifth Report, 12 FCC Rcd 9615 (2008).
[17] A facilities-based carrier is one that owns most of its
facilities, such as switching equipment and transmission lines. A non-
facilities based carrier is one which leases most of its switching and
lines from others.
[18] [hyperlink, http://www.gao.gov/products/GAO-06-426].
[19] See FCC-08-89, Mar. 19, 2008.
[20] The Broadband Data Improvement Act, Pub. L. No. 110-385, § 103(a),
122 Stat. 4096, 4096 (codified at 47 U.S.C. §§ 1301-1304).
[21] Telecommunications Act of 1996, Pub. L. No. 104-104, § 509, 110
Stat. 56, 138 (1996) (amending the Communications Act of 1934).
[22] Remarks by President George Bush at Expo New Mexico, Albuquerque,
New Mexico, Mar. 26, 2004.
[23] Department of Commerce, National Telecommunications Information
Administration, Networked Nation: Broadband in America 2007
(Washington, D.C., January 2008).
[24] Pub. L. 110-385, title 1, 122 Stat. 4096 (208).
[25] Executive Office of the President, President's Council of Advisors
on Science and Technology, "Building Out Broadband," Dec. 13, 2002.
[26] Pub. L. 110-246 § 6112, 122 Stat. 1651, 1966 (2008).
[27] On Mar. 10, 2009, FCC issued a public notice requesting comments
on how FCC and the Department of Agriculture should implement this
requirement.
[28] Philip J. Weiser, A Framework for a National Broadband Policy, The
Aspen Institute (Washington D.C., 2008, 13-14); The Rural Broadband
Initiative: Deploying Next-Generation Broadband Service to Rural
America, The Digital Policy Institute (Ball State University, Jan. 5,
2009, 3); NECA Rural Broadband Cost Study: Summary Of Results, 06/21/
00.
[29] Although wired networks can usually provide higher speeds than
wireless networks, in cost estimates provided by RDUP, the cost of
service provided via a wireless network is about 20 percent of the cost
of service provided over a wireline network.
[30] Pew/Internet, Home Broadband Adoption 2008: Adoption Stalls for
Low-income Americans Even as Many Broadband Users Opt for Premium
Services that Give Them More Speed, John Horrigan, (Washington, D.C.,
July 2008). The remaining 1 percent of Americans was unsure whether
their connection was broadband or dial-up.
[31] According to an FCC public notice, FCC also expects that the rural
broadband strategy it is developing in response to the Farm Bill will
inform its effort to develop a comprehensive national broadband plan.
[32] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, [hyperlink,
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21,
2005); Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2,
2003); and Managing for Results: Barriers to Interagency Coordination,
[hyperlink, http://www.gao.gov/products/GAO/GGD-00-106] (Washington,
D.C.: Mar. 29, 2000).
[33] Fragmentation refers to those circumstances in which more than one
federal agency (or more than one bureau within an agency) is involved
in a mission in the same broad area of national need. See GAO, Managing
for Results: Using the Results Act to Address Mission Fragmentation and
Program Overlap, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-97-146] (Washington, D.C.: Aug.
29, 1997).
[34] Pub. L. No. 103-62, 107 Stat. 285 (1993).
[35] The Information Technology & Innovation Foundation, Explaining
International Broadband Leadership (Washington, D.C., May 2008, app.
A).
[36] ITIF [hyperlink, http://www.itif.org] is a nonpartisan research
and educational institute--a think tank--whose mission is to formulate
and promote public policies to advance technological innovation and
productivity internationally, in Washington, and in the states.
[37] Web Site Optimization [hyperlink,
http://www.websiteoptimization.com] is a Web performance and Internet
marketing firm.
[38] Ambassador David A. Gross, United States Coordinator,
International Communications and Information Policy, United States
Department of State, Washington, D.C.
[39] U.S. Department of Commerce, National Telecommunications and
Information Administration, Networked Nation: Broadband in America
2007, Washington, D.C., January 2008; FCC, High Speed Services for
Internet Access: Status as of June 30, 2007, March 2008.
[40] We did not assess the reliability of the data used by OECD to rank
countries on various indexes because the data are provided to OECD by
the governments of the individual countries and the methodology used by
each country to compile such data is not presented in the report.
[41] CRS, Broadband Internet Access and the Digital Divide: Federal
Assistance Programs (Washington, D.C., June 4, 2008).
[42] American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5
(Recovery Act), § 6001(k)(2).
[43] GAO Report at 23-24.
[44] A National Broadband Plan for Our Future, GN Docket No. 09-51,
Notice of Inquiry, FCC 09-31 (rel. Apr. 8, 2009) (Broadband NOI).
[45] Id. at paras. 14-28.
[46] Id. at paras. 29-34.
[47] Id at paras. 62, 112-18.
[48] Id at para. 36.
[49] Id at para. 113.
[50] Id. at para. 34 (citing Government Performance and Results Act of
1993, Pub. L. No. 103-62, 107 Stat. 285 (GPRA)).
[51] Broadband NOI at para. 34 (citing United States Government
Accountability Office, "Agency Performance Plans: Examples of Practices
That Can Improve Usefulness to Decisionmakers," GAO/GGD/AIMD-99-69
(February 1999) and United States Government Accountability Office,
"Telecommunications: FCC Needs to Improve Performance Management and
Strengthen Oversight of the High-Cost Program," GAO-08-633 (June
2008)).
[52] Broadband NOI at para. 34 (citing Office of Management and Budget,
"Initial Implementing Guidance for the American Recovery and
Reinvestment Act of 2009," Memorandum, M-09-10 (Feb. 18, 2009)).
[53] "Updated Implementing Guidance for the American Recovery and
Reinvestment Act of 2009," Memorandum, M-09-15 (April 3, 2009).
[54] Broadband NOI at para. 34.
[55] Id.
[End of section]
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