- - Wednesday, July 26, 2017

ANALYSIS/OPINION:

Microsoft President Brad Smith announced recently a broad, sustained, cooperative initiative among private industry and federal, state and local governments to extend broadband access ultimately to all Americans, focused in particular on rural America, where broadband has been most lagging. He discussed the issue at a Media Institute luncheon in Washington, D.C., on July 11.

Mr. Smith reported that 34 million Americans lack access to broadband today, 23.4 million in rural areas. As he put it, broadband is now a necessity of life and progress, particularly useful in rural areas for health care, agriculture and education, as well as everyday life. Just as with electricity and telephone service, internet broadband should be extended to every American, Mr. Smith said.

Microsoft’s solution for extending universal broadband more quickly is based on utilizing TV White Spaces, which are the unused bandwidth between TV broadcast channels. “You can be one kilometer away and can still use wifi with it,” Mr. Smith explained. Microsoft has already used such White Spaces in 20 countries, connecting 185,000 people to the internet.

Microsoft’s goal is to work with private and public partners to eliminate the U.S. rural broadband gap by July 4, 2022. “TV White Spaces are the most cost-effective solution for closing this gap for 80 percent of rural America,” Mr. Smith said.

Microsoft is seeking $8-$12 billion in private-sector investment, to build out universal broadband for everyone using White Spaces, existing wireless technologies and satellite coverage. Microsoft and its consultants at Boston Consulting Group project that this combination of technologies would achieve universal coverage with reduced costs of about 80 percent.

Microsoft’s Rural Airband Initiative will initially pursue 12 projects in 12 states in 12 months, connecting 2 million people to the World Wide Web. Those states include Arizona, Georgia, Kansas, Maine, Michigan, New York, North Dakota, South Dakota, Texas, Virginia, Washington and Wisconsin.

Microsoft will work with corporate partners by paying for upfront capital costs, and licensing all 39 of its patents in White Space technology royalty free to everyone who will work collaboratively on the project. Microsoft plans to recoup costs by revenue-sharing with partners. For the next five years, Microsoft will use its resources to expand coverage and work with these partners instead of making a profit.

The public-sector contributions minimize increased government spending and use of taxpayer funds. These are:

• Federal Communications Commission (FCC) action to ensure that three channels in the 600 megahertz band, which are the TV White Spaces, are available for wireless use in every market in the U.S.

• Federal and state infrastructure investments, mostly from currently planned and committed funds, targeting on a matching basis capital investments that would best expand internet access and coverage into rural areas in the most cost-effective way, particularly including TV White Spaces, fixed wireless and satellite coverage.

• Broadened and accelerated action by the FCC to collect and report publicly on the state of broadband coverage in rural counties, which would aid policymakers and the private sector in making these investments.

Mr. Smith added, “Broadband connections have become indispensable for accessing health care, advancing education, improving agriculture, and growing a small business. As a country, we should not settle for an outcome that leaves behind over 23 million of our rural neighbors. To the contrary, we can and should bring the benefits of broadband coverage to every corner of the nation.”

Expanding broadband to every American in every area of the country would help increase economic growth, which is President Trump’s central agenda as well. It is the kind of connectivity infrastructure that economists have recently recognized as pro-growth in the modern, interconnected global marketplace. Mr. Smith is right that extending internet broadband throughout rural America would improve agricultural productivity, education-creating human capital, growth and opportunity for small business, and health care services. All of that adds to bottom line growth of gross domestic product.

Government regulation has hampered broadband investment in recent years, particularly so-called “net neutrality” regulation. If investors feel they will not be free to control and operate their investment, that adds up to a powerful deterrent to make the investment in the first place. The FCC itself has recently publicly recognized as much.

Microsoft’s rural broadband initiative is welcome leadership that will help restore America’s booming, world-leading economic growth in the 21st century.

• Peter J. Ferrara is a senior fellow at the Heartland Institute, a senior policy adviser at the National Taxpayer Limitation Foundation, and principal and general counsel at the Raddington Group.

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