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Promoting Innovation and Competitiveness
A New Generation of American Innovation

Promoting Innovation and Economic Security Through Broadband Technology

“This country needs a national goal for…the spread of broadband technology. We ought to have…universal, affordable access for broadband technology by the year 2007, and then we ought to make sure as soon as possible thereafter, consumers have got plenty of choices when it comes to [their] broadband carrier.”

--- President George W. Bush, March 26, 2004

Executive Summary

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Promoting Innovation and Economic Security Through Broadband Techonolgy

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  • Broadband provides Americans with high-speed Internet access connections that improve the Nation’s economic productivity and offer life-enhancing applications, such as distance learning, remote medical diagnostics, and the ability to work from home more effectively.
  • Consistent with this vision, the Administration has a record of comprehensive and demonstrably effective broadband initiatives that are creating an economic and regulatory climate in which broadband can flourish. Developing the most competitive broadband market in the world will provide American consumers with the most affordable and highest quality broadband service in the world.
  • Broadband technology will enhance our Nation’s economic competitiveness and will help improve education and health care for all Americans. The Bush Administration has implemented a wide range of policy directives to create economic incentives, remove regulatory barriers, and promote new technologies, all of which are essential to making broadband competitively available and affordable.

Creating Economic Incentives

  • In an effort to spur investment, the President signed into law a jobs and growth package that allowed companies to depreciate capital expenditures more quickly, including capital equipment used for broadband deployment. Companies are more likely to make important investments in broadband technology if they can depreciate the capital costs associated with broadband rollout more quickly.
  • President Bush is committed to making broadband affordable. The President has signed into law a two-year extension of the Internet Access Tax moratorium and has called on Congress to pass legislation that would explicitly extend the moratorium to broadband and make the moratorium permanent. Taxing broadband access would increase the cost of broadband for consumers.

Removing Regulatory Barriers

  • The Administration supports the Federal Communications Commission’s (FCC) decision to free new fiber-to-the-home investments from legacy regulations. Deregulating new ultra-fast broadband infrastructure to the home removes a significant barrier to new capital investments.
  • On April 26, 2004, the President signed an Executive Memorandum that implements Federal rights-of-way reforms to streamline the process for broadband providers to get access to Federal lands to build high-speed infrastructure. The reforms will help to minimize burdens on industry by simplifying and standardizing the rights-of-way process across all relevant agencies, while allowing agencies to use their resources wisely.

Promoting Innovation

  • The Administration has made unprecedented strides in balancing the commercial spectrum needs of critical government agencies (including Department of Defense, Department of Transportation, and Department of Homeland Security) and commercial interests. The Administration has identified 90 MHz of spectrum to be auctioned for next generation wireless services.
    • Currently only one wireless carrier is offering wireless broadband. Once the 90 MHz is auctioned, multiple wireless carriers will have the opportunity to become broadband carriers – stimulating vigorous competition and bringing lower prices and improved services to consumers.
    • The Administration has nearly doubled the amount of spectrum available for innovative wireless broadband applications such as Wi-Fi and Wi-Max. These technologies can provide a range of new services from granting consumers broadband access in restaurants, airports and other public places, to providing an economically viable solution for providing broadband services in rural areas.
    • To ensure these technologies continue to develop, the Department of Commerce’s National Institute of Standards and Technology is chairing the Wi-Max standard setting body.
    • To build on this record of success, the President has launched an initiative to create a Spectrum Policy for the 21st Century. The Department of Commerce is scheduled to deliver a report to the President this summer on how to improve spectrum management.
  • The Administration is working to enable the rollout of broadband technology. The Department of Commerce is developing the technical specifications necessary to enable the widespread and responsible deployment of broadband over powerlines (BPL). Having conducted 10 million measurements of BPL systems, the Department of Commerce will be able to chart the clear technical path forward for BPL to coexist with other critical uses of spectrum. Once deployed, BPL has the potential to turn every electrical outlet into a broadband pipeline.
  • The President supports investment in research and development and has proposed the largest Federal R&D budget in history, $132 billion in Fiscal Year 2005. Federal research and development help lay the foundation for advances in broadband technologies. In FY 2005, the National Information Technology Research and Development (NITRD) program is budgeted for $2.0 billion and includes research directly related to broadband technology. The President proposed making permanent the Research and Experimentation Tax Credit, which promotes private sector investment in new technologies such as broadband.
  • Important Facts about Broadband:
    • Broadband is high-speed Internet access.
    • Broadband in the United States is “always-on,” allowing a computer to remain connected to the Internet 24 hours a day.
    • Distance learning, remote medical procedures, interactive web teleconferencing, and real-time video and audio all require Internet speeds beyond what traditional dial-up service can offer.
    • Broadband has grown from just over 7 million subscriber lines in December 2000 to almost 24 million in June 2003, a 230 percent increase.
    • Consumers are adopting broadband faster than they have adopted other technologies such as color televisions, wireless phones, VCRs, and personal computers.
    • Approximately 90 percent of all U.S. zip codes have access to at least one form of wireline broadband connection (cable modem or DSL), up from just over 70 percent at the end of 2000.
    • 75 percent of zip codes in the United States have access to broadband through both cable modem and DSL.