Washington Prowler

National Public Internet

The Obama plan to create a government-run "competitor" to private broadband companies.

By 6.14.11

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Over the past 18 months, the Obama Administration has been seeking to more stringently regulate Internet, broadband, and wireless broadband networks operated by such communications firms as AT&T, Verizon, Sprint, as well as Comcast and Time Warner Cable. Now it is taking steps to create a taxpayer-financed, government-run broadband network that while ostensibly deployed for use by public safety officials, would compete for business against the current wireless broadband companies.

Late last week a bill co-sponsored by U.S. Senators John D. (Jay) Rockefeller (D-WV) and Kay Bailey Hutchison (R-TX), that would set aside a wide swath of valuable wireless spectrum to public safety, passed by a bipartisan vote in the Senate Commerce Committee.  Funding to build the network would come from the auctioning of additional spectrum to private companies, as well as taxpayer dollars.

While the United States has one of the most advanced and competitive wireless industries in the world, the Obama Administration wants to create a public corporation similar to institutions like the Corporation for Public Broadcasting to manage and operate the wireless network.  Some inside the White House, according to sources, also support having the government-owned and managed wireless network competing in the marketplace against companies like AT&T and Verizon.

"Some people want the network to only be used by public safety and first responders," says a White House source with knowledge of the thinking of several senior Obama Administration officials involved in the discussions. "But we're talking about a network that could also be used for commercial purposes, especially in parts of the country where people don't have broadband services.  So these folks could do things like access the Internet, stream movies, and do the kinds of things most other Americans pay AT&T and Verizon to do, but you'd expect that as the government, we'd be able to offer those services at considerably cheaper prices."

The Rockefeller-Hutchison bill passed with the support of both public safety groups and the wireless and broadband industry, in part, because there were private assurances from Rockefeller that in the end, the government-operated network would not allow for such so-called "secondary uses" as consumer Internet access or phone services.

But some Obama Administration officials see the proposed network as an opportunity to create new competition in the wireless marketplace. Within the next week, the FCC is expected to release a report that declines to identify the wireless marketplace as "competitive" even though in the past, the federal agency has determined that the wireless market is exactly that.

"What you are seeing out of the Obama FCC is an effort to use official government reports to influence public opinion and seed the ground for White House and Cabinet-level department policies that essentially further 'socialize' our economy," says a senior Republican Commerce Committee aide. "You saw it with net neutrality, you've seen it with health care and the environment and now you're seeing it with wireless communications."

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