Tech leaders: Feds should push broadband

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By Patrick Thibodeau

WASHINGTON (IDG) -- A group representing the nation's largest technology companies is pushing the White House and Congress to make broadband access a national priority on par with the 1960s effort to put a man on the moon.

Palo Alto, California-based Technology Network (TechNet) includes companies such as Microsoft Corp., Intel Corp. and Cisco Systems Inc. The organization wants to set a goal of having 100M bit/sec. connections available in 100 million U.S. households by 2010. Today's broadband connections are typically less than 2M bit/sec.

The companies are also seeking an interim goal of 6M bit/sec. connections for at least 50 percent of U.S. households by the end of 2004.

Today, some 80 percent of the households have access to broadband, defined by the Federal Communications Commission as 200K bit/sec. and up. But only about 10 percent of those households have signed up for it -- an audience that's too small to encourage businesses to offer broadband content. But, in what is becoming a chicken-and-egg argument, without feature-rich content, some observers are arguing that there is no incentive for consumers to pay $40 to $50 per month for Digital Subscriber Line access or cable modems.

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While content and copyright issues still have to be addressed, TechNet officials said the key problem now is improving the network.

"What you've got right now is a technology that is jury-rigged from old technology," said Rick White, CEO of TechNet and a former Republican congressman from Washington state. "It was never really designed to provide a high-bandwidth connection and frankly doesn't do a good job of it."

Current broadband speeds are too slow, Les Vadez, a senior vice president at Intel, said at a briefing today. "All you can do with it, for every practical purpose, is the same that you can with a slow connection but a little bit faster," he said.

What's needed, said the high-tech executives who are members of TechNet, is for lawmakers at the local, state and federal levels to strip away regulatory obstacles to high-speed deployment and provide subsidies to some of the end users of the technology. The U.S. also needs a national plan to guide broadband deployment, something Europe, Japan and other governments are already doing.

The group, which represents about 300 companies and venture capital firms, said it isn't seeking tax incentives for its member firms.

The high-tech executives, however, stopped short of taking a position on some of the more controversial pieces of legislation now pending in Congress, namely the Tauzin-Dingell Broadband Bill, sponsored by U.S. Reps. W.J. "Billy" Tauzin (R-Louisiana) and John D. Dingell (D-Michigan). That bill would end line-sharing restrictions now imposed on Baby Bells.

The Baby Bells say those restrictions hurt their ability to invest in broadband. But competitors such as AT&T Corp., which need access to the Bell lines, say removal of those restrictions on regional carriers would undermine their broadband investments.

TechNet officials said they have discussed the issue with the Bush administration and congressional leaders and said it's an emerging priority of the administration.

The broadband argument raises intellectual-property issues. TechNet executives have claimed that content is an important driver of broadband usage and cited Napster Inc.'s music-sharing service as an example. At its height, the peer-to-peer file sharing service accounted for almost a quarter of the data moving to and from residential customers through Redwood City, California-based At Home Corp.'s broadband service. Napster's unrestricted peer-to-peer sharing model was ultimately curbed by a federal court because of copyright issues.

"It is quite clear that compelling content, which is made available on economic terms that respect the intellectual rights of owners, can be a tremendous spur to the growth of broadband networks," said John Doerr, an analyst at venture capital firm Kleiner Perkins Caufield & Byers in Menlo Park, California.

"Americans want that," he said. "Unfortunately, I think we've swung from one extreme to another."