Michigan Broadband Summit Kellogg Center, East Lansing 5/20/2009

1. Michigan Broadband Summit Kellogg Center, East Lansing5/20/2009 U.S. BROADBAND POLICY AND THE FUTURE OF MICHIGAN LIBRARIES. John Windhausen, Jr. President, Telepoly Consulting jwindhausen@telepoly.com (202) 256-9616

2. U.S. BROADBAND POLICY AND THE FUTURE OF MICHIGAN LIBRARIES. How Michigan Libraries Can Play a Vital Role in the Information Age, Serve as an Example for Broadband Deployment Everywhere, and Help Guide our Nation’s Information Policy in the Right Direction.

3. “A Blueprint for Big Broadband”An EDUCAUSE White Paper Issued January 2008 Key Recommendation: The Federal Government should allocate $33 Billion to subsidize the construction of 100 Mbps local broadband connections to every home and business. www.educause.edu/ir/library/pdf/EPO0801.pdf

4. Why Should the Federal Government Subsidize Broadband? • Broadband has become an “essential” service • Broadband demand is exploding. • Industry (except for Verizon) investing less than what America needs (microeconomics trumping macroeconomics). • U.S. falling behind our international competitors.

5. Is BB really an “essential” service?

6. Broadband Is Replacing Television Danny Ledonne rarely misses "The Daily Show." . . . The thing is, Ledonne doesn't own a television. . . . [He] can watch all the TV he wants merely by opening his laptop, or going to his cellphone or iPod. Thanks to dozens of videocasting Web sites, such as Hulu, TV.com, Joost and Fancast, full-length episodes of more than 90 percent of the shows carried by the major broadcast networks are legally accessible within a day of being broadcast. . . “Click, Change: The Traditional Tube Is Getting Squeezed Out of the Picture” , Washington Post, Sunday, May 17, 2009.

7. Look at what Broadband can do for these other “essential” services . . . • Telephone service (Voice over IP) • Health care: (Telemedicine: remote medical monitoring; remote surgeries!) • Education: (Distance learning - not just for college; increasingly K-12 students) • Energy consumption (meter reading; smart grid) • Transportation (telecommuting; traffic management)

8. Rob Atkinson, ITIF: “there are significant [positive] externalities from high-speed broadband . . . if left to themselves, market forces alone will lead to less investment in broadband than is societally optimal.”

9. Broadband is THE Essential Infrastructure. Broadband is not just AN Essential Infrastructure

10. 2. How Much Broadband Do We Need? A LOT!

11. Overall Internet Traffic Continues to Grow • According to the Minnesota Internet Traffic Studies (MINTS), U.S. and World Internet traffic growth is 50-60%/year. • Total Internet traffic growth is currently doubling about every 18 months. (Moore’s Law)

12. “The Coming Exaflood,” Brett Swanson, Wall St. Journal, Jan. 20, 2007 "Without many tens of billions of dollars worth of new fiber optic networks, thousands of new business plans in communications, medicine, education, security, remote sensing, computing, the military and every mundane task that could soon move to the Internet will be frustrated. All the innovations on the edge will die."

13. High Definition (HD) Video May Accelerate Growth Patterns • A single HD video stream (1080p) = 2.5 Mbps • Next generation (“Quad TV” 2160p) = ? • Ultra HD = ? • Rule of Thumb: Take your existing BB capacity, multiply by 10. That’s what you will need just 4 years from now.

14. 3. Industry Slow to Invest in Broadband. Is this why? FCC Broadband Report: Cable-Telco BB Market Share

15. Cable’s Long-term (?) Vision • The "Father of the Cable Modem" praised the cable industry's DOCSIS 3.0 spec as a "truly impressive technology," but RouzbehYassini of YAS Broadband Ventures warns that broadband capacity requirements will eventually outstrip it. • "It's "a great technology... a technology that will go on for five, six, seven, or even eight years.” http://www.lightreading.com/document.asp?doc_id=172668&site=cdn

16. Why doesn’t the private sector invest more in broadband? • "Today, fiber serves no purpose," Philippe Capron, chief financial officer of Vivendi. "There is no new revenue stream and no supplemental service to offset the considerable investment. All that it does is to encourage the illegal downloading of films.” (February 2009)

17. The U.S. has had no broadband plan. The private sector makes its decisions based on microeconomics – its profit/loss statement. But the nation’s broadband strategy should be driven by macroeconomics – including the benefits to the nation as a whole.

18. U.S. Broadband Policy (pre-2008): “You got to be careful if you don't know where you're going, because you might not get there.”

19. 4. U.S. Falling Behind in International Broadband Rankings. • 15th in broadband adoption • 14th in average download speed • 18th in broadband price per megabit • 16th in broadband quality

20. International Speed and Price Comparison

21. United States Broadband Subscribership: 2002-2008

22. BB Subscriber Growth: US/Europe

23. Countries with more rural population and smaller GDP per capita than the U.S. have better BB Penetration.

24. Japan: FTTH is replacing DSL.

25. Australia February 2009 • National broadband "fibre-to-the-home" network now to be built over eight years by a company established by the government. - Network will give 90 per cent of homes, schools and businesses a connection of 100 megabits a second, 100 times faster than now. - Those remaining will get a service of 12 megabits a second through wireless technologies. - Will support 25,000 jobs a year for each year of construction, with 37,000 jobs in the peak year of construction.

26. Canada February 2009 • 2009-10 Budget proposes $225 M over 3 years to extend broadband coverage to unserved communities. • "To call this commitment modest is being charitable,” [Internet Law Professor Michael] Geist said. "I don't know what the right number for Canada is, but what we needed was a firm commitment to universal broadband — and this falls short."

27. “Digital Britain” Industry Developments BritainJanuary 2009 • BT promised to invest €1.5 B in next generation access networks over next 5 years. • BT plans to offer 40Mbps to 10 million homes by 2010 (of 23M total households). • Preference for Fiber-to-the-Node (FTTN).

28. “Digital Britain” Government Recommendations Britain January 2009 • “[if] by 2012 up to ten per cent of homes are still in not-spots, not-a-lot spots or not-at-all good spots, then the gulf in access and connectivity will appear starker than it is today.” • Proposed a Universal Service Commitment by 2012 to ensure every household has available 2 Mbps, which it said may be “future-proof.”

29. Greece February 2009 • €2.1 B ($2.7B) to build fiber connections to pass 2 million homes during the next seven years with fiber access connections in 50 cities. • Not dictating final loop technology • Open access basis • Operated by firm that does NOT provide retail services.

30. European Union European Union recovery plan has “earmarked” €1 billion ($1.3 billion to "extend and upgrade high-speed Internet in rural communities" where broadband rollout might otherwise not be planned by commercial network operators.

31. NTIA RUS • Broadband Technology Opportunities Program (BTOP) • Dept. of Commerce • $4.7 Billion • Distance Learning, Telemedicine and Broadband Program [?] • Dept. of Agriculture • $2.5 Billion Broadband Funding in theAmerican Recovery and Reinvestment Act (ARRA )

32. 4 Pots of BTOP Funding $ 200 Million $ 250 Million $ 350 Million $ 10 Million $ 141 Million $ ~3.75 Billion • Expanding public computer center capacity (“at least”) • Stimulate broadband demand and usage (“at least”) • Broadband Mapping (“up to”) • Inspector General for audits • Administrative Expenses • Broadband Grants

33. “Expanding Public Computer Center Capacity” • “not less than $200,000,000 shall be available for competitive grants for expanding public computer center capacity, including at community colleges and public libraries” • Note that the $200 M is a floor, not a cap. NTIA may allocate even more to this pot. • Note competitive grants. Meeting minimum requirements will not be good enough.

34. What does “expanding public computer center capacity” mean? • Physical building (bricks and mortar) • Power (electricity may need to be upgraded) • Computer Hardware and computer stations. • Computer Software • Furniture • Inside wire • Routers and internal equipment • Wireless routers to serve the surrounding community • Conduit (drilling holes, digging trenches outside the building) • Outside wire (the coaxial cable, the fiber optic cable) • The one-time charge to connect to the telco/cable/municipal/wireless network on the street.

35. Libraries have two pots of money to pursue: • The $200 M pot for public computing • The $3.75 B pot for broadband deployment. • Libraries may apply for funding from one or both pots (but may not accept funding from both pots for the same expenses).

36. Of the 5 Purposes of the ARRA funding: (3) provide broadband education, awareness, training, access, equipment, and support to— • (A) schools, libraries, medical and healthcare providers, community colleges and other institutions of higher education, and other community support organizations and entities to facilitate greater use of broadband service by or through these organizations; • (B) organizations and agencies that . . . [service] low-income, unemployed, aged, and otherwise vulnerable populations;

37. The BTOP and RUS programs open the door for “Fiber to the Library.” • Fiber is future-proof: virtually unlimited capacity will last for decades. • Fiber requires digging trenches or stringing wires = JOBS • The library can serve as an “anchor institution”, encouraging further deployment of fiber to the surrounding community. • ALA cost estimate in the range of $40,000 per library.

38. Examples of Fiber Initiatives: • Maine: One of the first statewide schools and libraries networks, now converting to fiber. • Maryland: already funded fiber to nine counties on the Eastern Shore. • Virginia: used tobacco settlement funds to build fiber in southern (rural) areas • Vermont: Burlington fiber has expanded to rural counties

39. More Fiber Examples: • Lafayette Louisiana: finally deploying fiber after years of court cases. • UTOPIA: Utah cities have had financial difficulties attracting customers to their fiber networks • Canarie Project in Canada: paying higher energy bills to subsidize fiber

40. Why Should Libraries Care about Broadband? • The world is changing, and public libraries have a responsibility to lead the U.S. in the right direction - toward open and democratic access to information.

41. A Timeline of Information Delivery

42. One Vision of the Future: • “In the next 5-10 years, how we obtain information will turn upside down. All the traditional forms of information delivery are essentially dead. The traditional printed newspapers no longer exists, television in the form of preset channels is replaced by single shows that you can watch whenever you like. Radio shows are replaced podcasts and vodcasts.”

43. The Future of Information Delivery. • The news stream of the future will be personalized to each individual person. . . • Traditional web sites will lose their importance. . . • Each person will have their own individual web site that manage their news and information specifically for them.

44. Whether or not this vision becomes reality depends on the openness of the Broadband Networks.

45. The Importance of Open Broadband Networks, by Dilbert

46. There is no law or regulation today that requires broadband networks to be open. Why do we need Net Neutrality legislation/regulation?

47. Why Should Libraries Care about Broadband? • On a more practical level: • Broadband Internet Access could become the critical service that justifies future funding.

48. Pew Internet and American Life Project: • Q: What would it take dial-up users to switch to broadband? • 35% say price would have to fall • 19% say nothing would get them to change • 16% don’t know • 14% say it would have to become available where they live • 11% cite some other reason By providing broadband Internet access at no charge, public libraries provide the solution to the high price of broadband for low-income consumers.

49. Quantitative Benefits of Broadband: San Francisco Public Library (SFPL) TOTAL ESTIMATED BENEFITS OF THE ENTIRE SFPL FOR FY05-06: Low EstimateHigh Estimate $ 87,210,554 $ 207,464,792 SFPL Budget (Cost): $62,108,717 $ 62,108,717 Benefit/Cost ratio $ 1.40 /$1.00 $ 3.34/$1.00 • On-line Databases $ 24,358,427 $ 49,483,059 • Computer Usage $3,398,160 $ 8,863,327 • WiFi $ 481,140 $ 962,279 Subtotal: $ 28,237,727 $ 59,308,665

50. Goshen Virginia “Gets it”