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Dueling Broadband: Bush Vs. Kerry
by Drew Clark
Both President Bush and Democratic presidential candidate John Kerry said on Thursday that they want all Americans to have access to high-speed Internet service. But they differed over how to use television frequencies and whether to use tax credits to expedite broadband access.
In simultaneous speeches on opposite coasts, each candidate touted his support for the technology industry and its key policy priorities in Washington. Bush stressed deregulation in the broadband arena and tax-free Internet access. But he also said that the federal government can encourage innovation and that his administration is doing that with broadband over power lines and through various wireless technologies that transmit information.
Kerry, meanwhile, scored the Bush administration for proposing a budget that would cut science funding in real dollars for 21 out of 24 federal agencies, including the National Science Foundation. He promised to double funding for the Manufacturing Extension Partnership (MEP) program and to restore aid for the Advanced Technology Program (ATP). The latest Bush budget proposes a 90-percent cut for MEP and elimination of ATP.
Kerry also cited Organization on Economic Cooperation and Development data that showed the United States falling from fourth in broadband development per capita in 2001 to 10th in 2003. "We won't get very far with a leadership that lets America fall to 10th in the world when it comes to adopting broadband Internet access," Kerry said. "We need a leadership that says if Bangalore in India can be completely wired, then so should all of America."
John Kerry's Digital Vision
Kerry's solution to the global broadband gap calls for expediting the transition to digital TV and offering a tax credit to firms that deploy high-speed Internet infrastructure.
His plan relies on using spectrum to facilitate broadband, and unlike Bush, he fingered the 108 megahertz (MHz) of prime spectrum currently used by broadcasters to send digital TV signals. He said he would complete the transition to digital TV, devote 24 MHz to "first responders" to emergencies, and split the rest among companies that would use broadband connections based on the wireless Wi-Fi standard and companies seeking to reserve and license that spectrum.
"After more and more households transfer to digital television, we will sell spectrum space to private companies and use the money to invest in science and technology and pay for every dime of the plan I am discussing today," Kerry said.
Jason Furman, an economic policy adviser to Kerry, said the transfer to digital TV is "a really serious, critical" element of Kerry's plan. In addition to supporting an FCC proposal to effectively end the digital transition by 2009, Furman said Kerry endorsed a New America Foundation plan to pay consumers to buy equipment necessary to receive digital signals.
"Sen. Kerry is committed to subsidizing consumers so we can continue to make the transition," Furman said. The up to $3 billion necessary for such a subsidy would more than pay for itself because it would free 24 MHz for public-safety uses, 42 MHz for "unlicensed" Wi-Fi devices that can be deployed without FCC permission, and 42 MHz whose sale to the cellular industry is expected to net more than $30 billion.
"Realistically, wireless in the broadcast bands may be the best way to accelerate broadband deployment on an affordable basis, especially in rural areas," said Michael Calabrese, director of the spectrum policy program at the New America Foundation. "We were very pleased to see that John Kerry today very explicitly embraces a major expansion of unlicensed spectrum access for wireless broadband, particularly in the broadcast band."
Read My Lips: No Taxes And No Regulation
Bush addressed various economic initiatives, including hydrogen-cell technologies, energy policy and electronic health records. But he spoke about broadband in greater detail than before.
Two elements of his approach include opposition to taxes on broadband access and limited regulation. He called on Congress to extend the ban on Internet taxes and praised the FCC for removing line-sharing rules on telecommunications companies that deploy high-speed wires.
"Regulations for the telephone were established years ago, and I don't think those regulations should apply to a 21st-century technology," Bush said. "I thought the FCC did a smart thing ... by telling [telecom companies] they don't have to give away use of their fiber-optic lines."
Some see Bush's position as finally taking sides in the divisive legislative and regulatory wars over telecom policies that have pit the dominant Bell carriers against competitors. "It is encouraging because it is an appreciation that the best way to serve consumers is through facilities-based competition, as opposed to assuming that the best way to do it is through one wire into the home," said Randy May, senior fellow of the Progress and Freedom Foundation.
In addition to endorsing technology to offer broadband over power lines, Bush spoke about the importance of electromagnetic spectrum. He released a yearlong report on "Spectrum Policy for the 21st Century."
The study calls for reserving 20 MHz of spectrum as a test bed for innovative radio-frequency technologies, legislation to let government agencies like the Defense Department auction less-used spectrum to the private sector, and procedural reforms about how the federal government manages spectrum. Neither the report nor Bush took a position on digital TV.
'Moving In The Right Direction'
Although the Bush administration has supported an extension of the research and development tax credit, an issue crucial to the technology industry, it has not endorsed calls for broadband tax credits. Bills in the House and Senate would offer a 10-percent credit for rural and inner-city investments in current broadband technology and a 20-percent tax credit for any investments in advanced technologies -- those with connection speeds 20 times faster than cable modems. Many observers see that as a crucial way to stimulate the industry.
Critics said Bush continues to lack an appreciation for investments in the technology sector. "The major thing to understand about the Bush tech agenda is that it is a day late and a dollar short," said Rob Atkinson, vice president of the Democratic Leadership Council's Progressive Policy Institute. "He has largely ignored it, and when he understands that John Kerry is out there pressing the issue, he knows he should, too."
Bush's defenders said the president appreciates that government cannot replace private industry in making investment decisions. Commerce Department Undersecretary Phil Bond praised the president for sticking to the 2007 date for universal broadband access, saying, "It is his goal, he has given it to the country, so he has locked in on this and [is] pushing on it."
Technology industry officials are pleased that both parties are finally talking broadband. "Everyone is moving in the right direction," said Grant Seiffert, vice president of external affairs for the Telecommunications Industry Association."
Of Bush, he said: "He is the president, and we are quite pleased [in] that he outlined broadband" in such extensive details. "That is important, and impressive, and has a huge impact in signaling to the sector and the industry that [broadband] is important to all of our futures."
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