Kerry, Bush Split on Broadband

WASHINGTON — A John Kerry administration would use federal subsidies to
help spur broadband deployment while President Bush would continue his
policy of deregulation to spread the technology, two think tank
officials said Tuesday.

Thomas Lenard of the conservative Progress and Freedom Foundation and
Robert Atkinson of the Progressive Policy Institute, which helped craft much
of the Clinton administration policy, said broadband deployment policy is
one of the few tech policy issues where Bush and Kerry differ.

Earlier this year, Bush called for universal and affordable broadband access
for all Americans by 2007. Kerry has pushed for an equally aggressive
broadband rollout but without a specific deadline.

“The Bush approach is that the best way to get greater broadband deployment
is to reduce regulations, deregulate in areas where regulations have
essentially provided disincentives to the deployment of broadband,” Lenard
said at a debate sponsored by the tech trade group CompTia. “Kerry believes
the market can not do it alone, so you need to subsidize it.”

Kerry is proposing a 10 percent tax credit for investments in current
broadband technology for rural and inner city areas. He’s proposing a 20 percent tax
credit for next-generation broadband technologies, which the Massachusetts
Democrat defines as speeds of more than 20 times today’s networks.

According to the Kerry technology plan, the tax credits would cost $2
billion over five years and would be paid for by the estimated $30 billion
the government will gross by auctioning off the spectrum left behind by
broadcasters transitioning to digital television.

“This is one of those issues … between two fundamentally differing
approaches,” Atkinson said. “What Bush is proposing is [by 2007] every
single American can get low-speed broadband. I think that’s emblematic of
their approach. When Kerry is talking about broadband, he is talking about
big broadband. He is talking about networks that are 10 to 100 times faster
[than today] and setting that as a goal.”

The Bush broadband policy is primarily centered at the Federal
Communications Commission (FCC), where Chairman Michael Powell has
championed a multi-platform approach to broadband deployment. Under Powell,
the FCC has promoted wireless broadband and broadband over power lines as
alternative third and fourth pipes to compete with cable modems and DSL.

“This is a case where personnel is policy,” Lenard said, referring to Bush’s
appointment of Powell as FCC chairman. “Bush says the market can really do
it; Kerry says the market can’t do it without federal subsidies.”

Last month, the FCC released its fourth annual report to Congress on
broadband deployment. The FCC said the United States ranks number one in the
world with 28 million subscribers, followed by the European Union (23
million), Japan (14 million), China (12 million), South Korea (11 million)
and Canada (4.5 million).

But in terms of residential broadband penetration — the number of
subscribers per 100 people — the United States with its 6.9 subscribers per
100 residents ranks behind 10 other countries. South Korea is the global
leader with 21.3 subscribers per 100 people, followed by Hong Kong (14.9),
Canada (11.2), Taiwan (9.4) and Iceland (8.4).

The FCC report said subscribership to advanced services providing
bi-directional Internet speeds in excess of 200 kilobits per second (Kbps)
has more than tripled from 5.9 million lines to 20.3 million lines since

Cable modem and ADSL service providers comprise the largest majority of
advanced service lines, with cable representing 75.3 percent of the lines
and ADSL another 14.9 percent. As of last December, 6.8 percent of ZIP codes
in the United States had no high-speed lines. In the last report, 22.2 percent of ZIP
codes reported no high-speed connections.

On other technology issues, both Lenard and Atkinson said there are subtle
but non-substantive differences between the two presidential candidates.

“In many cases, the Bush rhetoric is right, but I question his [real]
commitment [to tech-related issues],” Atkinson said. “The Bush record [on
telecom policy] is a little bit of a mixed bag.” Lenard agreed the Bush
administration was a “little bit disengaged the first three years [on
telecom policy],” but again stressed that Bush’s appointments to key
administrative posts spoke well for the president’s policies.

The two think tankers also agreed technology issues are not on the
frontlines of the public debate over the national elections.

“Both of us are puzzled why this [technology policy] wasn’t the subject of the
third [presidential] debate,” Atkinson joked.

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