COMMERCE SECY. REPEATS PROMISE TO STIMULATE BROADBAND DEMAND

Commerce Secy. Donald Evans repeated Wed. his promise that Commerce Dept. would be “proactive” in stimulating broadband demand. “Broadband is delivered to homes but consumers are not picking it up,” he said. About 70 million homes have access in U.S. but “very few actually use it, about 20%,” he said: “We need to do what we can about the demand side” of broadband access. Innovations such as broadband are “absolutely vital” to U.S. economy, Evans said, with IT alone accounting for 2/3 of productivity growth and 1/4 of economic growth. “Over the next 10 years, broadband is expected to add half a trillion dollars -- $50 billion a year -- to the economy.” Building national broadband network will create more than 1 million new jobs, he said.

Planned actions by Commerce to “unlock demand for broadband” he described: (1) President’s Council of Advisers on Science & Technology (PCAST) will examine demand-side policies, including whether lack of “ killer application” hurts demand for broadband (CD March 6 p3). (2) Commerce’s Technology Administration and Economics & Statistics Administration will hold March 25 workshop to examine applications that improve productivity and would encourage broadband deployment, including supply-side management and customer relations. Evans said Commerce “will continue to work with Congress and the FCC to further roll out broadband.” Administration budget also encourages broadband deployment by “creating the right environment” with investments in R&D and tax relief.” Administration budget includes $110 billion for R&D of all kinds, Evans said, and favors accelerated depreciation for capital equipment and “to make the R&D tax credits permanent, which would encourage broadband deployment.”

Evans spoke at Broadband Expo organized by Commerce Dept. that showcased dozen firms that used broadband technology. Companies demonstrated long distance learning, telemedicine and “homeland security” applications such as high-speed connections that let airport security match passenger data against biometric or national security databases. Evans originally had been scheduled to speak at TechNet policy luncheon in Reagan Center across street but bowed out to deliver his remarks at Commerce event. TechNet, advocacy group for high-tech CEOs, was in Washington to meet with policymakers on potential legislative fallout from Enron bankruptcy. Subjects included securities litigation, stock option accounting, trade promotion authority and pending Tech Talent Bill (S-1549, H-3130). In Jan. visit group unveiled its plan for universal broadband. It called on “President and policymakers to make broadband a national priority” and set goal of making affordable 100 Mbps broadband connections available to 100 million U.S. homes and small businesses by 2010. TechNet plan calls for regulatory relief and “targeted tax incentives” to reach that goal. It is focused largely on supply of broadband infrastructure -- at odds with Administration plan to increase broadband demand.

Although luncheon was devoted largely to Enron, several speakers commented on broadband plan. “I love the idea of a big goal by a given date,” Sen. Lieberman (D-Conn.) said. He advised group that it needed “to better educate both the Congress and the Administration,” and to date “Administration has been pretty silent on this question.” Most members of Congress don’t appreciate connection between broadband and job creation, he said, adding that role of Congress should be to “create an appropriate regulatory or lack of regulatory climate to allow broadband to grow.” What broadband needs to thrive often is “misunderstood,” he said: “What we are not asking for is an old-fashioned industrial policy where the government picks winners and losers.” Lieberman said he would prepare legislation that would ask Administration within 6 months “to come out with a broadband policy,” adding that Congress also would ensure it was “the right kind of broadband policy.”

TechNet proposal is “great idea” and broadband applications such as distance education are “understood by members of Congress,” Sen. Baucus (D-Mont.) said, Multiyear broadband rollout plan needed to be national policy, not urban project, he said: “Rural states want to be part of it; if it is a national broadband policy, we're all in it together. All Americans need to be treated the same way, with the same access and roughly the same prices.”

Tauzin-Dingell opponents seized on Tues. comments of Evans and Council of Economic Advisers Chmn. Glenn Hubbard, who described Bush Administration’s focus on increasing demand for broadband (CD March 6 p3). That is one of tasks assigned to President’s Council of Advisers on Science & Technology (PCAST), which met Tues. near White House. Citing our coverage of meeting, Voices for Choices Co-Chmn. Charles Black said Hubbard’s remarks “are a much-needed clarion call for every federal policymaker involved with telecommunications issues… Commerce Secretary Evans and Professor Hubbard are on the right track -- a track that Congress and federal regulators should quickly join.” American ISP Assn. Pres. Sue Ashdown faulted Congress for focusing on building broadband networks when consumer demand was low: “It is not in the best interest of American consumers to choke off competition through flawed supply-side legislation, and we stand ready to work with Secretary Evans to ensure that broadband usage finally catches up to availability for American consumers.” CapNet Exec. Dir. Tim Hugo said Administration’s approach at PCAST meeting differed from supply-side approach of Congress: “Because the Tauzin- Dingell legislation will not solve our nation’s broadband problems, we need to see a national broadband policy that will foster greater demand for high-speed Internet services.”