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Bush's Bold Plan for Broadband
Last week, the President called for 'universal, affordable access' for broadband by 2007.
April 5, 2004: 10:06 AM EDT
By Peter H. Lewis Fortune Magazine

NEW YORK (Fortune Magazine) - Speaking last week at a campaign rally in Farmington, New Mexico, President George W. Bush surprised many in the technology world by calling for universal, low-cost access to broadband data services for American households by 2007.

Like his earlier call for a manned mission to Mars, the President's "bold plan for broadband" was ambitious, but a bit short of details. Following is an excerpt from his remarks, as transcribed by the White House:

I want to talk about one other thing we've got to do to make sure this is a good place for people to realize their dreams and start a business and get well educated, is we've got to make sure this country is on the leading end [sic] of broadband technology. You see, new ideas and new businesses and new ways to educate people in Farmington, New Mexico are going to occur when we're able to get information flowing across cables and telephone lines in a fast way. That's what broadband technology is. It means we'll open the highways of knowledge溶ew highways of knowledge.

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This country needs a national goal for broadband technology, for the spread of broadband technology. We ought to have a 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 purchasing the broadband carrier. See, the more choices there are, the more the price will go down. And the more the price goes down, the more users there will be. And the more users there will be, the more likely it is America will stay on the competitive edge of world trade.

The more users there are, the more likely it is people will be able to have interesting new ways to receive doctors' advices [sic] in the home. The more affordable broadband technology is, the more innovative we can be with education. It's important that we stay on the cutting edge of technological change, and one way to do so is to have a bold plan for broadband.

Let me say one thing about broadband -- we don't need to tax access to broadband. The Congress must not tax access to broadband technology if we want to spread it around.

(Applause.)

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On the same day, John F. Kerry, the presumptive Democratic nominee for President, identified "broadband" as one of the key technology initiatives of the coming decade. The candidate stopped short, however, of offering a bold plan of his own. In the past, Senator Kerry was a supporter of the 1996 E-Rate program, which subsidized high-speed Internet access for thousands of schools and libraries.

Regardless of who wins the November election, how realistic is it to have "universal, affordable access for broadband technology by the year 2007," as the President put it?

It depends, of course, on your definitions of "universal" and "affordable."

"If by universal you mean 100 percent, no, it's not realistic," said Russ Fradin, executive vice president of ComScore Networks, a market research firm. Mr. Fradin noted that there are U.S. households that still do not have telephone service. Cable television, too, has been around for decades yet millions of households have resisted its allure.

And, Mr. Fradin continued, "affordable is another loaded word. In many of the larger U.S. markets, because of increasing competition between cable and DSL providers, the cost is down to $20 or $30 a month. Is that affordable? Maybe not to some people, but compared to dial-up it's relatively affordable. It's definitely cheaper than it was a few years ago."

Of the estimated 75 percent of Americans who have some form of access to the online world from home, more than half still connect via dial-up modems in a slow way, with speeds of 56 kilobits per second or less. But the balance between dial-up and broadband is shifting rapidly, ComScore found, especially in the largest metropolitan areas. In two cities, San Diego and Boston, more people now go online via broadband than via dial-up.

But if one assumes a more forgiving definition of "universal" and "affordable," Mr. Fradin said, "Yes, I think it's certainly a realistic goal to have relatively affordable, universal broadband access in the top 50 markets in the U.S." by 2007.

As always, rural and poorer areas generally lag behind the big cities in availability and affordability of advanced services.

Mr. Fradin noted that several variables could affect the rapid rollout of broadband services. On one hand, competition among cable and telephone companies is subject to both market and regulatory limits. And, he noted, "2007 is not very far away. In terms of build-out, the big cable and telephone companies probably already know where they'll offer broadband access two or three years from now."

On the other hand, wireless broadband access is a wildcard, he said. The rise of so-called 3G (third-generation) or subsequent wireless communications systems in theory will allow consumers to connect to the Internet at broadband speeds from their mobile phones. And, public high-speed wireless access points are popping up in McDonald's restaurants and Starbucks coffee shops, not to mention hotels, airports and gas stations.

If we get to the point where there's a Starbucks on every corner and a WiFi broadband access point in every Starbucks, and a broadband connection in every cellphone, then yes, in theory, one could argue that universal broadband access is definitely possible in a few years.

The "affordable" part still bothers me. It is difficult to imagine that a family without health insurance would consider $25 a month for broadband Internet access to be affordable. But perhaps President Bush has a bold but secret plan, other than tax cuts, to subsidize broadband Internet access for low-income households.

I eagerly await further details from the campaign trail.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: テつゥ 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices テつゥ S&P Dow Jones Indices LLC 2018 and/or its affiliates.