Beyond the status quo

Bringing broadband to the masses is kind of like the weather: Everyone talks about it, but no one is doing anything about it. President Bush’s plan of bridging the digital divide is laudable in theory, but problematic in reality.
The problem is no one can agree on the business model.
M2Z Networks is taking its idea to bring wireless broadband to the nation to court after hearing FCC Chairman Kevin Martin planned to turn down M2Z’s proposal. M2Z has a controversial plan to operate a nationwide broadband network in the 2155 MHz-2175 MHz spectrum band. But rather than pay for the spectrum upfront, M2Z would return 5% of revenues to the government. The proposal is not favored among carriers that have had to pay for spectrum. (Bear in mind, however, that no company paid for cellular spectrum, nor have MSS operators had to pay for their spectrum so there are cases where the FCC just gives the invisible gold away.)
New and old wireless players are exploring novel ways to cut the revenue pie. There are flat fees, revenue shares, ad-supported options, etc. The government-private partnership model is getting a lot of attention lately as well. Although the FCC may turn down revenue-share plans like M2Z’s, local governments are embracing such proposals. Philadelphia was one of the first to spearhead such efforts with a muni Wi-Fi network built and run by EarthLink. Reports indicate that the service is generally good (but inside coverage is not), about 80% of the 135-square-mile area is covered and that EarthLink expects to profit on its $13.5 million investment. However San Francisco has had nothing but setbacks in its attempt to blanket the city with Wi-Fi coverage.
What role should government play in deploying broadband service? Telecom, wireless and cable companies are deploying broadband access, and companies like Clearwire and Sprint Nextel resolve to do the same; maybe the government should provide a subsidy to low-income families or high-cost areas like they do the school lunch program (but not the Universal Service Fund program.)
The biggest test of the public-private relationship will start next year during the 700 MHz auction. Who will bid and how much they’ll offer for the right to build a public-safety/commercial network remains to be seen. And that’s just the starting point: whether a business can meet public safety’s needs as well as make a profit on commercial operations will be the real test.
In the meantime, broadband will continue to be deployed in fits and starts.