Bring U.S. Broadband Up to Speed

For long-term economic growth, Obama's stimulus package should include a $10 billion to $15 billion investment in high-speed communications infrastructure

By Sol Trujillo

The Obama Administration's stimulus package to jump-start the American economy should include a crucial and relatively inexpensive program to improve the country's communications infrastructure. This would ignite long-term growth throughout the economy and close a serious technology gap between the U.S. and many other countries.

The U.S. desperately needs to catch up with global leaders in two areas of high-speed broadband communications. The first is extending the current world-class wired broadband service now used by big business, smaller companies, and consumers across America. The second is increasing the transmission speed and reach of wireless service to nearly everywhere in the nation. Achieving these two goals would bridge the digital divide between city and country and provide a powerful productivity tool to all sectors of society: private enterprise, nonprofit organizations and institutions, and every level of government. A federal stimulus plan should do more than just add jobs in the telecommunications industry.

U.S. Missing Out on Productivity Gains

In many countries, including Australia, broadband service is available to a much larger percentage of the population than in the U.S. Many have much faster and more versatile third-generation, or 3G, wireless broadband networks—what much of the rest of the world calls the "mobile Internet." On the wired side, many countries have a lead in the penetration of robust fixed-line networks that their businesses are using to innovate and create new opportunities. The greater power and penetration of their networks means their businesses can reach more customers. Result: Companies in other countries are leveraging broadband and the Internet to operate more efficiently and create game-changing competitive advantages. Their governments are also using high-speed broadband technologies to reach more citizens and lower the cost of services in health care, education, and public safety. America is missing these productivity gains at a time when it needs them most.

Based on what I have seen as CEO of media and telecommunications companies on three continents, I believe the U.S. should use a small portion of its stimulus spending as seed money for the nationwide deployment of high-speed broadband networks, wireless and wired, capable of transmitting data at speeds of 100 megabits per second (Mbps), compared with speeds of one or two Mbps that are common today. But it's important that the right policy mix be in place to encourage the private sector to invest the additional capital necessary for these networks.

Japan, South Korea, and Europe have been well ahead of the U.S. for a while. China just approved a measure to upgrade to 3G wireless service at an estimated cost of $41 billion. And Australia, with territory nearly as large as the continental U.S. and a very similar population distribution, has wireless network speeds of 14.4 Mbps to cell phones, laptops, and other wireless devices on a mobile Internet that reaches 99% of the population. This speed, many times faster than the best U.S. wireless networks, enables Australians to transmit real-time video, photos, MRI images, and other data that cannot yet be delivered by American wireless systems. Our network is ready to operate at 21 Mbps and, in the next year or so, we will double Australia's network speeds to 42 Mbps—providing bandwidth fast enough to download a two-hour movie to a laptop on a beach in four minutes. That's faster than all but a tiny fraction of U.S. wireline broadband connections.

Economists who say productivity gains based on digital technologies have peaked have not seen the future as it is playing out in other countries, particularly on the wireless front. In Australia, for example:

• Construction companies download drawings to remote sites and coordinate jobs in real time without sending managers on the road.