President Obama pitches $18 billion wireless broadband plan

By Cecilia Kang

MARQUETTE, Mich. — In this remote snow-swept college town rejuvenated in parts by Internet commerce, President Obama on Thursday outlined a plan to create similar economic stories through the expansion of super-fast wireless Internet connections.

Speaking at Northern Michigan University, Obama unveiled an ambitious blueprint to use $18 billion in federal funds to get 98 percent of the nation connected to the Internet on smartphones and tablet computers in five years.

To get there, the federal government will try to bring more radiowaves into the hands of wireless carriers to bolster the nation’s networks and prevent a jam of Internet traffic. He said he hoped to auction airwaves currently in the hands of television stations and government agencies to raise about $27.8 billion.

And with the money raised, the government would fund new rural 4G wireless networks and a mobile communications system for fire, policy and emergency responders. The remaining funds raised — about $10 billion — would go toward lowering the federal deficit over the next decade.

First outlined in his State of the Union speech, the plan is part of a push to reshape the nation’s infrastructure of deteriorating roadways and manufacturing plants into one with high-speed railways and high-speed Internet networks the president said are essential to compete globally in years ahead.

“To attract the best jobs and newest industries, we’ve got to out-innovate, out-educate, out-build and out-hustle the rest of the world," Obama said in his speech.

The plan is ambitious and complicated and relies heavily on the participation of cautious television broadcasters who are loath to easily give up their greatest asset — spectrum, experts say.

Specifically, $10.7 billion would go toward building an interoperable public safety network so first responders can communicate, send video files and e-mails during disasters and national security threats.

The administration also plans a one-time allotment of $5 billion from a federal phone subsidy to be used for wireless broadband expansion in rural areas. About $3 billion would go to a government research and development program for ways to use mobile Internet access for emerging technologies and applications in health, education and energy.

Its estimates don't include how much money it would return to broadcasters who give up airwaves in voluntary "incentive auctions." Those television broadcasters will get a cut of the proceeds, the administration has promised though it hasn't offered more details.

But broadcasters want more guarantees auctions will be voluntary and they are searching for details on how much they would receive from the auctions.

Those details, however, are crucial for broadcasters, said Gordon Smith, president of the National Association of Broadcasters.

"We aren't against the plan but want to make sure this is truly voluntary, and we want to hold harmless those who don't want to participate," Smith said.

They are sitting on what is considered beachfront spectrum that is ideal for powerful Internet connections from a flood of Droids, iPhones and Xoom tablets hitting the market.

"It is not at all clear that incentive auctions will take place," Gigi Sohn, president of the public interest group Public Knowledge, said in a statement. She praised the federal attention to mobile broadband technology but said, "even under circumstances of familiar auction procedures, estimates of revenue can vary greatly from what is actually achieved."

Some lawmakers point to a questionable track record for federal programs to expand broadband connections.

As Obama toured Marquette’s Getz’s Clothiers, a retailer that has expanded its business on the Web thanks to broadband Internet for Marquette's population of 20,000, the House Energy and Commerce Committee held a hearing on oversight of recent funding for broadband programs.

More than $7 billion in stimulus funds have been distributed to broadband grants in rural areas and lawmakers grilled recipients and government officials over economic gains from those grants.

“Before we target any more of our scarce taxpayer dollars for broadband, it is critical to examine whether the money already being spent is having an impact, as well as how we can minimize waste, fraud and abuse,” said Rep. Fred Upton (R-Mich.), chairman of the energy and commerce committee.

Because the funds for new mobile broadband networks would come from auctions and not from the U.S. Treasury, it "has a better-than-even chance of happening," Paul Gallant, an analyst at investment firm MF Global said.

The White House said the funds won’t come out of taxpayer pockets, pointing to its expectations of auction proceeds.

Obama chose to visit Marquette because of the town's success in attracting commercial partners such as Intel to build a mobile broadband network based on WiMax technology on the university campus. Northern Michigan University partnered with towns nearby to expand cell towers so that elementary schools, police and residents could also access wireless networks fast enough to access streaming videos without a wireline connection.

"If you can do this in the snowy wilderness of the Upper Peninsula, we can do this all across America," Obama said.