WHITE HOUSE SEES REGULATION AS MUST IN PROMOTING BROADBAND

Regulation is a key element in the Bush administration’s push for greater broadband deployment, officials said Wed. At a briefing for reporters on the administration’s efforts to promote multiple broadband options for consumers, Office of Science & Technology Policy (OSTP) Dir. John Marburger said “regulation is necessary” to prevent interference and support standards: “It’s an essential function of government.”

Asked about broadband-related bills on Capitol Hill, OSTP Assoc. Dir.-Technology Richard Russell said the administration hadn’t taken a position on any of the VoIP bills, and might be willing to accept a compromise bill on an Internet tax moratorium if President Bush could sign the legislation this year.

“Having the government get out of the way” of the private sector as it deploys broadband “is an important goal,” said Commerce Dept. Undersecy.-Technology Phil Bond. But he agreed with Marburger that there were several reasons for govt. involvement, including standard-setting and ensuring the U.S. is the “innovation center of the world” through intellectual property protection. He said the federal govt. can create an “investment environment” through a permanent R&D tax credit; the credit expired June 30, and legislation to temporarily renew it is in a House-Senate conference.

Bond reiterated Bush’s goal of universal access to broadband by 2007. He said multiple technologies -- including Wi-Fi, WiMax, broadband-over-power-line and satellite -- would help with that. He said 73.5% of the most rural zip codes already are passed by at least one provider, and WiMAX, with a service radius up to 30 miles, offers a way to reach others. Most WiMAX business models envision a radius of 3-5 miles with speeds ranging from those of consumer DSL to T-1. NIST is actively involved in WiMAX development, he said, and the administration “is very excited about it.”

Bush’s stated goal is universal access, not adoption, Russell said. As for broadband adoption, Marburger said new services and applications likely will make broadband more attractive to fence-sitters. But Russell said a less-quoted line of Bush’s after the 2007 promise is endorsing “competition as soon as possible thereafter.” Russell predicted broadband prices will drop as more competitors enter a market. Price is a key element that will drive broadband adoption, he said, and any state or local taxation on broadband would deter adoption.

The sponsors of Internet tax moratorium legislation in the House and Senate targeted about 7 states currently taxing DSL; the House bill’s language is more explicit. The House bill also eliminates all grandfathering and makes the moratorium permanent. The compromise that passed the Senate would last 5 years, apply new grandfathering to DSL-taxing states, and phase out those state taxes over time. The House passed its bill last year and the Senate months ago, but conferees haven’t even been named. Hill sources say little or no discussion is occurring. Russell said “there’s no question the administration wants legislation” making the moratorium permanent, but suggested the White House was open to compromise to achieve revival of the moratorium, which expired last Nov. “The President wants to sign a bill this year,” Russell said, repeating that statement for emphasis moments later.

The officials declined repeated opportunities to comment on how VoIP should be regulated, noting the FCC is doing a rulemaking on the subject. Bond did say that with respect to CALEA, “we're certainly going to find a way that law enforcement concerns are examined and taken into consideration.” Asked whether the Universal Service Fund should be used for broadband, as many suggest, Russell said “then you automatically assume broadband pays in to Universal Service.” Cable, he noted, doesn’t. “We have not come out with a universal service platform,” he said.

While the telecom sector for years has pressed for mentions of broadband in the President’s speeches, and some felt that until this year those mentions had been too few, the officials Wed. insisted broadband has been a central focus of the administration since the beginning. Bond cited freeing of spectrum for 3G services and progress on ultra- wideband. Russell cited a policy announced by Bush earlier this year that streamlines rights-of-way on federal land and waterways. “The President has a whole raft of policies related to the spread of broadband,” Marburger said. He also holds the title of Science Advisor to the President.

“This administration understands the potential” of the broadband revolution, Marburger said. He cautioned, however, that “regulating is getting more and more difficult” because of an explosion of consumer devices, and the fact that new digital applications use spectrum differently. “I cannot emphasize too much,” he cautioned, how difficult it is to predict the future when regulating: “Over-regulating is a serious problem.”