The Need For Speed

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Editor’s Note: This guest post was written by Julius Genachowski, Chairman of the Federal Communications Commission. Prior to his FCC appointment, Genachowski was Chief of Business Operations and before that General Counsel at IAC/InterActiveCorp; Special Advisor at the private equity firm General Atlantic; and co-founder of the technology incubator LaunchBox Digital.

This week’s iPhone announcement and last week’s release of the new Kindle Fire, Windows 8/Nokia Phone, and Droid RAZR by Google/Motorola offer the latest evidence that, over the past few years, the U.S. has regained global leadership in key areas of communications technology.

These high-powered devices, and the demands they place on our broadband networks, underscore a critical challenge. To ensure the U.S. is at the forefront of the next wave of Internet innovation, we need to drive continued improvements in our wired and wireless broadband infrastructure – super-fast, high-capacity, and ubiquitous broadband networks.

To risk the colloquial, we feel the need – the need for speed. As Tom Friedman and others have written, in this flat global economy a strategic bandwidth advantage will help keep the U.S. as the home and most desired destination for the world’s greatest innovators and entrepreneurs.

It wasn’t long ago that Asia and Europe were seen as ahead of the U.S. in broadband-powered innovation and infrastructure. Take mobile. As a 2008 Businessweek story said, America’s reputation for too long was as a “wireless backwater.” But thanks to America’s innovative technology and broadband companies, and to smart government policies, the story today is different. It’s one of comeback and leadership.

After trailing in key 3G metrics, we are now leading the world in deploying the next generation of wireless broadband networks – 4G LTE – at scale. We have 69% of the world’s LTE subscribers, making the United States the global test bed for LTE apps and services.

In a powerful example of innovative public policy spurring innovative new services, the U.S. pioneered Wi-Fi, and we continue to lead the world in unlicensed spectrum innovation. Last year, the FCC freed unused “white space” spectrum between broadcast TV stations, liberating the most unlicensed spectrum in 25 years and setting the stage for Super Wi-Fi, and more unlicensed spectrum is on the way.

America is also leading in what’s running on these networks – another comeback. More than 80% of smartphones sold today throughout the world run operating systems developed by U.S. companies, up from less than 25% three years ago.

Today’s “apps economy,” already massive and still in the early innings, is fundamentally a made-in-the- U.S.A. phenomenon.

With firms like Salesforce.com, Amazon, Rackspace, and others, the U.S. pioneered and continues to lead the fast-growing cloud computing industry. U.S. companies are the clear leaders in the tablet sector worldwide, accounting for roughly three-quarters

of tablets sold and for the operating system on almost all tablets. And pause on this: 30% of American adults have a tablet or e-reader, up from only 2% just three years ago. On wired broadband infrastructure, we’ve made major progress too. At the beginning of 2009, broadband networks capable of 100 megabits per second passed less than 20% of U.S. homes. That number is now over 80%, putting the U.S. – for the moment – near the top of the world in deployment of high-speed broadband infrastructure.

This progress is important for job creation and investment. Mobile innovation is estimated to have created 1.6 million U.S. jobs over the past five years, and the nascent apps economy alone has already created nearly 500,000 U.S. jobs. Companies delivering cloud services added 80,000 new jobs in 2010, not counting the many jobs they helped create by boosting productivity and lowering costs for businesses large and small. From 2009 to 2011, annual investment in wired and wireless networks increased approximately 30% to more than $60 billion, even in this challenging economy. And these metrics are just the beginning. The benefits for education, health care, energy, and public safety are all proving themselves out through amazing inventors and entrepreneurs, and give real reason for optimism that technology can bring positive revolution to these sectors.

But progress isn’t victory, particularly in this fast-moving sector. Challenges to U.S. leadership are real. This is a time to press harder on the gas pedal, not let up. The first challenge is the need for faster and more accessible broadband networks. We need to keep pushing because our global competitors aren’t slowing down. I’ve met with senior government officials and business leaders from every continent, and every one of them is focused on the broadband opportunity. If we in the U.S. don’t foster major investments to extend and expand our broadband infrastructure, somebody else will take the lead.

We need to keep pushing because innovators need next-generation bandwidth for next-generation innovations – genetic sequencing for cancer patients, immersive and creative software to help children learn, ways for small businesses to take advantage of Big Data, and speed- and capacity-heavy innovations we can’t yet imagine.

We need to remove bandwidth as a constraint on our innovators and entrepreneurs. In addition to steadily increasing broadband speed and capacity for consumers and businesses throughout the country, we need – as we said in our National Broadband Plan – “innovation hubs” with super-fast broadband, with speed measured in gigabits, not megabits.

There have been some positive recent developments on this front. The Gig.U initiative, led by National Broadband Plan architect Blair Levin, has already catalyzed over $200 million in private investment to build ultra-high-speed hubs at in the communities of many leading research universities.

And in Kansas City, Google recently launched the first large-scale commercial effort to bring 1-gigabit- per-second service to residential consumers. Gig.U and Google Fiber will serve as testbeds, charting courses for communities to partner with broadband service providers to build world-leading, job-creating networks, but more must be done. I challenge communities to develop ways to incent more private investments in high-speed networks, and I challenge broadband providers to consistently improve the speed and capacity of their networks.

We accept this challenge at the FCC. Through last year’s landmark overhaul of our universal service program, we’ve created the $4.5 billion-a-year Connect America Fund, a public-private partnership to extend broadband deployment, including high-speed broadband to anchor institutions. We’re continuing to modernize our E-rate program, which invests over $2 billion per year to connect schools and libraries. And we’re ramping up our broadband speed measuring efforts to increase transparency in the market, drive competition, and empower consumers.

Our broadband networks also need to be universally accessible and affordable so consumers and businesses actually use them. Multiple studies indicate the U.S. lags a number of other countries in broadband affordability and the speeds that consumers subscribe to, and nearly 1 in 3 Americans are still not connected to the Internet at home.

Another key challenge on the mobile side is the wireless spectrum crunch. U.S. mobile data traffic grew almost 300% last year, and driven by 4G LTE smartphones and tablets, traffic is projected to grow an additional 16-fold by 2016. With this exponential growth, demand for our wireless capacity is on pace to exceed supply. Congested wireless networks are slower wireless networks.

So what can our country do to meet these critical challenges?

Some argue the private sector will solve these challenges itself, and that all government has to do is get out of the way. I disagree. The private sector must take the lead, but the public sector has a vital though limited role to play.

Among the policy levers government needs to use is the removal of barriers to broadband buildout, lowering the costs of infrastructure deployment with new policies like “Dig Once” that says you should lay fiber when you dig up roads. The President recently issued an Executive Order implementing this idea, suggested in our Broadband Plan. Government must promote competition, which drives innovation and network upgrades.

We must ensure the Internet remains an open platform that continues to enable innovation without permission.

We must unleash more wireless spectrum for broadband and significantly increase the efficiency of spectrum use. The Commission is moving forward with a bold new plan for incentive auctions – a new paradigm in spectrum policy that uses market forces to repurpose beachfront spectrum used by TV broadcasters for licensed (think 4G LTE) and unlicensed (think WiFi) wireless broadband.

And we must promote universal access to broadband through programs like the new Connect America Fund, the most significant program ever developed to expand Internet infrastructure in rural America.

America led the 20th century economy because we led the world in innovation. With the right policies and private sector action, we can deploy world-leading wired and wireless networks that enable the U.S. to continue to push the envelope on technological innovation, ensure a strategic bandwidth advantage, and strengthen our global competitiveness.