September Commission Meeting September 29, 2009 141 days until Plan is due 2 What we hope to accomplish today • Describe current/near-term state of broadband in the United States • Enable Commissioner/public feedback for mid-course review • Lay foundation for gap analysis and solution sets 3 Outline of presentations 10. Adoption—the Cost of Digital Exclusion and Opportunities for Acceleration 11. Introduction to National Purposes 12. Health Care 13. Energy 14. Education 15. Civic Engagement/ Government Performance 16. Innovation and Investment 17. Disabilities 18. Consumers 19. Economic Opportunity 20. Public Safety and Cyber Security 21. Concluding Remarks 1. Introduction 2. Framework for the National Broadband Plan 3. A Few Highlights 4. Applications 5. Deployment and Future Deployment Plans 6. Lessons from International Studies 7. Spectrum 8. Implications for the PSTN 9. Break 4 Challenges for today’s meeting: Distilling the record Workshops/hearings - To date: 25 - Scheduled: 4 - Witnesses: 236 The Written Record - Response to NOI 820,453 records/entries 836,882 pages - Response to public notices 89 public notices 8154 total responses 8986 pages - Blog responses 840 posts 8340 comments 33 3 3 6 6 7 7 8 9 10 12 13 14 13 14 15 17 20 22 31 Gov’t - International Satellite Finance CLEC Fiber Cable Disabilities Content Government - State Web ILEC Wireless Think Tanks Government - Local Government - Federal Alt wireless Minority Other Equipment Consumer & Pub. Int. Academic Number of hearing witnesses, by organization 5 Challenges for today’s meeting: Historic approach to data • Good policymaking requires consistently updated data • Many problems with existing broadband data • Multiple government agencies conduct surveys for economic indicators - Adding broadband questions inexpensive and valuable 6 Framework for the National Broadband Plan 7 Today’s broadband in America: Workshops told a good news/bad news story Education Good News Bad News •71% of teens say Internet has been primary source for recent school project •Most job searches online •Application process increasingly online •Online training improving efficiency •Broadband-enabling consumer savings and improved product information Jobs Small Business Health Care Economic Development Consumer Welfare •Broadband enables faster acceleration, small business to function like large enterprises •61% of Americans search for health information online •Many examples of communities using connectivity to lure new business investment •Students not online at growing disadvantage •Those offline find it increasingly harder to search, train, and apply for jobs •Many small businesses don’t have connectivity sufficient for new opportunities, like cloud computing •Finding medical information without online access limits patients’ knowledge, choices and care •Current broadband access in many places insufficient to attract new investment •Offline consumers face knowledge and cost gap 8 Vision: High-performance America • For individuals: a platform for education, training, and other tools to create the most opportunity, wherever one lives, whatever one’s circumstances • For businesses: a platform that facilitates innovation, lowers costs, and enables access to markets world-wide • For governments: a platform that empowers efficiency, responsiveness, and continual improvement on par with advanced enterprises 9 Broadband enables innovations necessary for the transformation National Priorities Government Operations •Service delivery and efficient government •Improved performance •Transparency •Civic engagement •Policy High-speed connectivity Ubiquitous adoptionUniversal access •Smart grid •Smart home applications •Smart transportation •Telework Energy/ EnvironmentHealth Care •Electronic health records •Remote/ home monitoring •Mobile monitoring •Telemedicine •Health information exchange •American Graduation Initiative •STEM •Nat’l Ed Tech Plan •eBooks and content •Electronic student data management Education Public Safety •Interoperable mission critical voice and broadband network •Next-gen 9-1-1 •Alerts •Cybersecurity Economic Opportunity •Job creation and economic development •Job training and placement •Community development 10 Key concepts in legislation • Universality • Affordability and adoption • Maximum utilization • Serving national purposes 11 Underlying economic principle: Broadband a key input into the economy • Broadband likely a general purpose technology • Broadband a significant part of the economy • Broadband part of a larger IT framework that has improved productivity 12 Broadband as foundation for sustained economic success: Accelerating the dynamic of the broadband ecosystem AdoptionDeployment Applications and Devices 13 Broadband as foundation for sustained economic success: Accelerating the dynamic of the broadband ecosystem AdoptionDeployment Applications and Devices • Increase deployment through reduction in cost or increase in supply of key inputs affected by government, such as spectrum, ROWs • Increase adoption through revenues, such as USF, and targeted programs, such as digital literacy • Facilitate applications through use of government data, or devices through standard setting process Examples of government levers 14 Current math Private Investment + USF + BTOP + BIP < Congressional Objectives Options for rewriting the equation -Unleash underutilized assets -Align supply and demand efforts -Maximize utilization of shared deployment efforts -Potentially deploy some new assets Core challenge for the National Broadband Plan 15 Historic examples of unleashing underutilized assets Unleashed spectrum for 4G platformDTV Transition Unleashed use of unlicensed spectrum for multiple purposes WiFi/Shared Spectrum Orders Unleashed mobile to become mass market product Lowering Wireless to Wired Terminating Access Charges Unleashed a competitive dynamic forcing cable, and then telcos, to upgrade networks Program Access Rules Unleashed phone network to serve as platform for data network Enhanced Service Provider Exception Unleashed phone network to be a platform for new devices, including modems Carterfone 16 A few highlights of what is coming Applications Deployment Adoption National Purposes 1. Wide variation in requirements from current applications, e.g., ~200 kbps to ~10 Mbps 2. Actual maximum download speed about half of advertised at peak hour for median user 1. ~5M homes get less than 786 kbps advertised; universalization cost: ~$20Bn 2. ~35M homes get less than 10 Mbps; universalization cost: ~$50Bn 3. One platform capable to meet certain demand scenarios for 50% to 80% of homes 4. Capex and opex drive universalization costs: opex driven by wholesale transport 5. Increasing problems with USF, need reform to fund future network 1. Several segments show penetration rates materially below the 63% average 2. Growing social cost: access to jobs, education, government services, information 3. First market research effort focused on non-adopters to design segmented approach 1. Value-creation requires apps, devices, connectivity, processes, and training 2. Health: Broadband enables hosted EHR: 18% savings and higher adoption by doctors 3. Energy: standards and home networking will drive innovation in demand management 17 Applications 18 Key Questions to discuss today • Why is understanding application usage important? • What applications do Americans use today? • What network performance do these applications require? • What network performance do Americans receive today? 19 Applications drive use of the Internet • The utilityof the Internet is an important driver of adoption and usage - Applications and bandwidth create a virtuous cycle • Applications migrate from offline to online, from entertainment to utilitarian social benefit - The boundary between entertainment and public value applications is artificial • Different applications require different performance parameters 20 Most application usage today is focused on browsing, communication and entertainment Web browsing, communication and entertainment are key usage drivers today Top web sites mirror this focus Note: “Other” includes long-tail sites with < 100 visitors and traffic from promotional servers Source: comScore September 2009 panel 0 20 40 60 80 100% Time spent on the internet by application (% of total hours) Engagement Othercategories of use Community/ Education Retail Services (photo, etc.) Socialnetworking, blogs News/ Information/ Search E-Mail/ IM/ Telecommunications Entertainment and sports 21 Different “use cases” drive application needs (consumer only) Utility Emerging multi-media AdvancedFull media Basic email and browsing Advanced browsing, basic download Advanced Multimedia applications Next-gen and two-way applications Library of congress MIT tele- learning Sign language video 22 New mobile devices are enabling convergence of basic fixed and mobile application profiles Utility Emerging multimedia Advanced Full media • Minimum today, but emerging (e.g. Videoconferencing) • iPhone enabling voice recognition for person with disability • Smartphone accessing library to upload/ download photos • Kindle accessing ebooks • Basic smartphones accessing news Minimal• P2P or HD streaming • 2-way HD video teleconferencing Low• SD video streaming • Interactive gaming or physical commands Med• Two-way browsing • Content streaming and download High• Voice • Email • One-way browsing Example uses Application and device example Similarity to fixed 23 Broadband speed needs vary by application type Example applications Actualdownload speed demands (Mbps)*Content type 0.5-5+ (Speed impacts down/up time and render) • Advanced web browsing, iTunes • Social Networking, P2P, etc • Medical Records download/ sharing • Large download (or upload) usage 0.3-0.5• Aleks (Online interactive education) • Pogo online games • Basic interaction 1-5• Streamed classroom lectures • Hulu • SD streamed video 0.1-0.3 (Speed impacts down/up time and render) • Basic email, E-book download • Web-browsing, job search, government website access • Basic download (or upload) usage 2-5+• Real-time interactive experiences & gaming• 2-way advanced video interaction 5-10+• Video teleconference and TeleLearning • HD Telemedicine (diagnostic imaging) • Enhanced video teleconferencing 0.6-1.0• Lower definition telemedicine• Video-conference + VOIP 0.1-0.3• PBS, Rhapsody• Streamed audio 0.1-0.3• Skype, Vonage• Voice over the Internet (VOIP) 10+• Broadcast quality HDTV • HD streamed University lecture • HD streamed video 0.3-0.5• Consumer generated education videos• Basic streamed video 1-5+• IPTV• IP TV Sources: FCC analysis, California Broadband Task Force report, Adtran FCC submission, Speedmatters.com report, Technet Broadband Primer, ITIF report March 2009, Discussions with content providers N o n r e a l - t i m e R e a l - t i m e Symm. Symm. Symm. Symm. Symm. Symm. 24 Speed is not the only critical characteristic • Throughput – Download and Upload speeds • Availability/ reliability • Latency • Packet loss • Jitter • Throughput – Download and Upload speeds • Availability/ reliability Primary performance drivers: • Streamed video and music • VOIP (+ video) or teleconference • IP TV • 2-way video gaming • Email • Web browsing • SD and HD video download Typical applications: Non real-time Real-time Both speed and quality determine user experience Speed primarily determines user experience Sources: FCC analysis; Telcordia PN response filing 25 Different application use cases result in varied speed and performance demands 0 2 4 6 8 Actual download speeds necessary to run concurrent applications (Mbps) Utility BrowsingEmail 0.5 Emerging multimedia YouTube video BrowsingEmail 1.0 Full media StreamedSD classroom lecture Browsing Email 4.0 Advanced 2-way video tele- conference Browsing Email 7.0 Latency Latency, Upload Latency, Upload, etc Example basket of applications by use case: Note: Examples represent ranged estimates of concurrent assumption; For example “Utility” assumes basic email at 0.1-0.3 Mbps and basic browsing at 0.3 Mbps, while “Emerging Multimedia” assumes both of those but a concurrent Youtube video running at 0.5 Mbps; “Advanced Connection” and “Specialized need” assume more robust email and web browsing needs alongside a real-time application such as a streamed SD classroom lecture at 1-5 Mbps or a 2-way video teleconference at 5-10 Mbps 26 Actual speed varies from advertised; actual speed enables the internet’s value 0 2 4 6 Consumer fixed broadband download speeds in U.S. (Mbps) comScore median (September 2009) Maximum advertised subscribed speed 6.0 comScore median (September 2009) Actual speed received 3.0 Difference is driven by a number of important factors • Maximum advertised relates to the theoretical maximum performance of a connection technology (e.g., Digital subscriber line) • Actual median speeds lag advertised by ~50%, creating consumer confusion - Due to general internet congestion, user device processing speed, Connection type, etc. - “Busy Hours” create additional congestion and lower median speeds additional 10-20% • OFCOM (UK) did a similar analysis and found that actual average speed is 57% of advertised - Similarly “actual average” of 4.3 Mbps is ~65% of “advertised average” of 6.6 Mbps • Internet Service Providers (ISPs) only control some of these factors • However, we will focus on actual median speeds (at busy hours) to understand network needs and increase consumer transparency Maximum advertised speed is often cited, but actual is more useful Note: Busy hours ~7-10PM Source: OFCOM, comScore September 2009 panel 27 The speed of the network largely determines what “use cases” can be enabled Source: comScore September 2009 panel 0 5 10 15 20 25% 256 K 2 500 K 5 768 K 8 1M 5 2M 18 3M 15 4M 7 5M 9 6M 7 7M 5 8M 4 9M 4 10M 3 10M + 9 Basic email and browsing Utility Percent of subscribers by ACTUAL top speed received Email, video streaming, browsing Emerging multimedia Large email, browsing, video and two- way streaming Full media Advanced Advanced email, browsing and high bandwidth applications ~50% of U.S. consumers receive less than 3.0 Mbps 28 Summary • The Internet creates value only if applications are adopted by consumers; greater adoption yields greater value • Internet users spend time browsing, communicating and watching entertainment, but the utility of the internet is in usage -- today’s streaming video is tomorrow’s streaming lecture • It is critical to focus on actual end-user speeds during the busy hours of usage, when typical Americans want to be online; advertised and actual speeds are not the same • Applications and device use and demands are evolving; Internet use today will not look like Internet use tomorrow 29 Deployment and Future Deployment Plans 30 Key deployment questions •How many housing units are passed by selected broadband technologies, and at what speeds? •What are the economics of providing universal broadband availability at different service levels? •What are the primary policies and programs impacting the universalization of broadband? 31 Key deployment questions •How many housing units are passed by selected broadband technologies, and at what speeds? •What are the economics of providing universal broadband availability at different service levels? •What are the primary policies and programs impacting the universalization of broadband? 32 Data currently available to the team are insufficient to conduct analysis at the desired level of accuracy Source: OBI analysis Geographic granularity Availability (separate from demand) Infrastructure data Data necessary for full analysis Data currently available •Data at the Census block level (100 times more granular than Census tracts) •Only national data set is at the Census tract level •Service availability in an area irrespective of take rates or speed of services subscribed •Only national data set reports households subscribing to certain speeds • Data that: –Verifies information on pricing –Provides a baseline for calculating the cost of building new infrastructure •No single database of all relevant broadband infrastructure exists Advertised v. actual •Information about actual throughput (speed) delivered by access networks •Information only about advertised, carrier-reported, speed 33 Minimally necessary assumptions about service within a tract likely overestimate service availability and speed No DSL 768 kbps DSL 1.5 Mbps DSL 3-5 Mbps DSL 10 Mbps DSL In reality, it is unlikely that service is evenly distributed throughout a given Census tract 1. Service available anywhere in a tract is available to every housing unit (HU) in that tract 2. The speed provided to the highest-speed HU in each tract is available to every HU in that tract Sources: Census Bureau; March 2009 Form 477 data; OBI analysis However, Form 477 data was not designed to address this distribution question Census tract Hous- ing units Total ADSL subs ADSL: 768k - 1.5Mbps ADSL: 1.5 - 3.0Mbps 3749265 1,229 208 6 97 … As a result, minimal assumptions are necessary in order to make any estimate These necessary assumptions probably overstate availability No DSL 768 kbps DSL 1.5 Mbps DSL 3-5 Mbps DSL 10 Mbps DSL 34 1 Numbers do not add to 100% due to rounding; not additive; based on 2009 Form 477 reports 2 Current NTIA definition of downstream broadband Source: 2009 Form 477 data; OBI analysis This interpretation of the data probably underestimates the number of unserved housing units •Assumes that availability of service in a tract is indicative of service everywhere in that tract •Assumes that speed provided to the highest-speed HU in each tract is available to every HU in that tract 0.4 (0.3% of HUs) 90.7 (71.3% of HUs) 124.2 (97.3% of HUs) 127.0 (99.3% of HUs) N/A Number of HUs in tracts where at least this speed tier is available (cumulative) Millions 100+ 10-100 3-10 .768-3 < .7682 Download speeds (advertised) Mbps 0.4 (0.3% of HUs) 90.3 (71% of HUs) 33.5 (26% of HUs) 2.8 (2% of HUs) 0.9 (0.7% of HUs) Number of HUs in tracts where each speed tier is available1 Millions Adding these assumptions allows for a preliminary estimate of housing units currently passed 35 1 Near-term capability of access plant, given current upgrade path; capabilities may differ materially from actual delivered speeds 2 Hybrid fiber coaxial Sources: 2009 Form 477 data; service provider, equipment manufacturer, and trade association filings and publications; analyst reports; OBI analysis 14-17 (11-13% of HUs) 91-94 (70-72% of HUs) 119-122 (93-96% of HUs) 121-124 (95-97% of HUs) N/A Number of HUs in tracts where at least this speed tier is available (cumulative) Millions 100+ 10-100 3-10 .768-3 < .768 Download speeds (capability)1 Mbps 14-17 (11-13% of HUs) 76-79 (56-59% of HUs) 26-29 (20-23% of HUs) 1-4 (1-3% of HUs) 3-6 (2-5% of HUs) Number of HUs in tracts where each speed tier is available Millions • Estimates include impact of DOCSIS 3.0 build-out in HFC1 footprint, but not 4G build- out • Estimates reflect capability of last- mile and access- network infrastructure, not service offered by providers Triangulating with other sources allows for significantly better assumptions about availability in the near term 36 Network performance levels are substantially driven by how deeply fiber has been driven into the network Copper second mile, copper last mile Fiber Tier 1 inter- connection point to core Central office Copper Remote terminal Copper Core •Insufficient copper connectivity between the central office and the remote terminal often limits availability of high-speed internet access Source: OBI analysis Last mile Second mile Middle mile 1 TELCO EXAMPLE 37 Fiber second mile, copper last mile Fiber Tier 1 inter- connection point to core Central office Fiber DSLAM Copper Core Source: OBI analysis Last mile Second mile Middle mile 2 •Deeper fiber can shorten loop lengths •Extending fiber to cell sites enables 4G •Node splitting often requires incremental fiber Network performance levels are substantially driven by how deeply fiber has been driven into the network 5-20 Mbps Incremental download speed increase versus case 1 TELCO EXAMPLE 38 Fiber second mile, fiber last mile Fiber Tier 1 inter- connection point to core Central office Remote terminal Fiber Core 1 Fiber to the premises Source: OBI analysis Last mile Second mile Middle mile 3 Fiber Network performance levels are substantially driven by how deeply fiber has been driven into the network •End-to-end fiber networks offer nearly unlimited scalability and performance •FTTP1 is necessary to compete with the fastest national broadband infrastructures (S. Korea/Japan) TELCO EXAMPLE 75+ Mbps Incremental download speed increase versus case 2 39 Competitive intensity may depend on different end-user broadband demand scenarios 1 Fiber to the node Sources: 2009 Form 477 data; service provider, equipment manufacturer, and trade association filings and publications; analyst reports; OBI analysis Downstream bandwidth supported 1 Mbps 14-16% 23-27% 51-57% 23-27% 14-16% 2-4%1-3% 51-57% 25 Mbps HFC and FTTP (Case 3) HFC and FTTN1 (Case 2) 78-82% 3-9% 10 Mbps 14-16% 3-9% HFC and DSL (Case 1) •Will low cost/low performance products be available in areas served by high- speed offerings? •What is the impact of low competitive intensity on price and innovation? •What is the impact of the planned 4G build-out? Wireline broadband technology platform coverage (after completion of announced DOCSIS 3.0 build-out) Percent of HUs passed Two technologies meeting demand One technology meeting demand Zero technologies meeting demand 40 Key deployment questions •How many housing units are passed by selected broadband technologies, and at what speeds? •What are the economics of providing universal broadband availability at different service levels? •What are the primary policies and programs impacting the universalization of broadband? 41 . . . driving up costs and limiting revenue opportunities Economics of providing broadband to the rural U.S. are challenging because of low linear density Sources: Census Bureau; NJ Office of State Planning; OBI analysis The average distance between homes increases rapidly from urban to rural areas . . . •Higher costs –Last mile plant costs –Central office and node electronics density –Transport and transit costs •Limited revenue –Low revenue density due to fewer homes per mile –Lower median income levels 0 100 200 300 400 500 600 700 800 0 10 20 30 40 50 60 70 80 90 100 Distance between U.S. housing units Yards; percentile of U.S. households Distance between units rises rapidly for last 2-5% 42 U.S. households are part of a complex technology ecosystem that includes diverse broadband infrastructures FTTP HFC DSL Fiber Transport Copper Transport Wireless Pt to Pt Hybrid Copper Fiber 2nd Mile Access Wireless Access Source: OBI analysis Satellite Dedicated Internet Access Managed IP MPLS/VPLS ATM Frame Relay Middle Mile Access Core Internet Dedicated Private Line DS3, OCn Carrier-E Internet Exchange IX Internet Exchange IX Internet 43 1 “Opex” refers to present value of operating expenditure. Does not include costs already incurred (e.g., spectrum, prior plant build- out). Assumptions made with regard to oversubscription rates on shared access networks, upgrade path for each technology, cost of equipment, maintenance, operations, urban/rural mix, and discount rate Sources: Service provider, equipment manufacturer, and trade association filings and publications; analyst reports; OBI analysis Selected last mile technologies have different cost/performance tradeoffs FTTP HFC (with DOCSIS 3.0 upgrade) DSL (with FTTN upgrade) 4G wireless Capability at estimated commercial deployment Mbps Average incremental cost/subscriber to move to maximum downstream bit rate1 Dollars 4 2 20 Up 10 Down 30 Up 100+ Down 100+ Up 0.5 Down Up Down Capex Opex 900 1,200 750 2,700 •High performance capability, but high cost due to new build-out required •Cost/performance profile benefits from costs already incurred and low DOCSIS 3.0 upgrade costs •Cost/performance profile benefits from costs already incurred of existing telco plant •4G build-out benefits from 2G and 3G infrastructure build out •4G costs do not scale well to FTTN and DOCSIS levels Comments Final analysis will likely take into account additional technologies (e.g., satellite) 44 Challenge in rural areas is both capex and opex Estimated annual cost/subscriber to provide wireline service1 Dollars 1 Does not include costs already incurred (e.g., spectrum, prior plant build-out). Assumptions made with regard to penetration rate, upgrade path, cost of equipment, maintenance, operations, urban/rural mix, length of fiber run, and discount rate Sources: Service provider, equipment manufacturer, and trade association filings and publications; analyst reports; OBI analysis 6 50 35 150 57 300 Transit and transportNetwork opexCapex Rural Urban 45 The incremental cost to universal availability1 varies significantly depending on speeds required 111-116 33-37 7-10 3-6 Housing units requiring upgrade to reach each tier Millions 350 50 35 20 Incremental cost to universal availability of these advertised speeds (Best estimate) $, billions 10-30 100+ 3-10 .768-3 Capability at estimated commercial deployment Mbps •Limitations on latency •Bandwidth usage and over-subscription costs Incremental cost will also depend on: •Costs of upgrading backhaul network •Required uplink speeds 1 For one access network. Includes both capex and discounted opex Sources: 2009 Form 477 data; service provider, equipment manufacturer, and trade association filings and publications; analyst reports; OBI analysis 46 Key deployment questions •How many housing units are passed by selected broadband technologies, and at what speeds? •What are the economics of providing universal broadband availability at different service levels? •What are the primary policies and programs impacting the universalization of broadband? 47 Some USF1 recipients have made progress in bringing broadband to rural America The smallest rural ILECs2 are upgrading their plant to bring broadband to rural consumers . . . Percent share of rural coop telco lines that have been upgraded to offer select speeds of internet access3 1 Universal Service Fund 2 Incumbent Local Exchange Carriers 3 Survey data. Assumes that if a higher speed is offered, all lesser included speeds are also offered 4 Excludes Competitive Eligible Telecommunications Carrier (CETC) support 5 Includes lines Verizon is proposing to sell to Frontier Sources: NTCA Broadband/Internet Availability Survey Reports (2004-2008); FCC data; FCC staff estimates 18% AT&T, Verizon and Qwest5 82% Owned by others . . . Even though most non- upgraded access lines are owned by those three companies Percent of total U.S. access lines not upgraded to offer broadband 0 10 20 30 40 50 60 70 80 90 100 05 74 74 04 07 91 80 06 08 88 +17 pct pts 3 Mbps 200 kbps (incremental) . . . And receive more high- cost support than AT&T, Verizon and Qwest. . . Percent share of total USF high- cost support for ILEC lines, 20084 86% Owned by others 14% AT&T. Verizon and Qwest5 48 In addition, the fund faces systemic, structural problems 2000 2002 2004 2006 2008 2010 85 80 75 0 -11% . . . Driving a higher USF contribution factor Percent 04 05 0602 0700 01 08 5 4 3 0 +9% CAGR 03 Outlays to ILECs Outlays to CETCs1High-cost fund has been rapidly growing . . . $, billions 2000 2002 2004 2006 2008 2010 8.5 8.0 7.5 7.0 6.5 6.0 12.5 12.0 11.5 11.0 10.5 10.0 0.0 9.0 9.5 As demand for funding grows, and the revenue base subject to assessment shrinks, consumers and businesses will face higher contribution factors in the future . . . While assessable revenue base declines . . . $, billions 1 CETC funding was capped on a state-by-state basis in 2008 Source: FCC data Assessable revenue Contribution factor has more than doubled since 2000 49 Regulatory policies affecting middle mile cost and deployment Special access services Forbearance from regulation Current policy regime • ILEC rates, terms and conditions for time-division multiplexing (TDM) special access services are regulated in many areas • Flexibility from tariff requirements is currently granted in many metropolitan statistical areas (MSAs) based upon a competitive “trigger” analysis • Forbearance from regulation of Verizon’s packet and IP transport “deemed granted” in 2006 • AT&T, Qwest, CenturyLink,1 and Frontier were granted IP/packet forbearance in 2007, but are still subject to Title II regulation Rigorous data analysis will be necessary to fully understand and quantify impact of these policy levers 1 For legacy Embarq exchanges only 2 Total element long run incremental cost Source: OBI analysis UNE • High-cap circuits can be purchased at TELRIC2 rates in some circumstances 50 The cost of obtaining pole attachments and rights of way may have a significant impact on fiber deployment 100 58-60 Labor 18-20 Rights of way, pole attachments, and permits TotalMaterials 20-22 Estimated total cost of an aerial fiber build Percent Source: OBI analysis •Make-ready charges can average $4- 6,000/mile •Make-ready delays of up to 18-24 months can also raise cost of fiber deployment •Rights of way fees are highly variable and can exceed hundreds of dollars per year per foot 51 Placing fiber in an open trench can yield efficiency gains when underground/aerial options are not readily available 8,000 45,000 5,000 SplicingMaterials Placement Total 22% 58,000 78% Estimated total cost of a fiber build1 Dollars; percent 1 10,000 foot build; assumes 48-fiber strand Source: OBI analysis •Joint trenching can often save >50% of the total cost of a fiber build •These savings are lessened if: –Conduit or aerial placement is available –Fiber size increases •A trench fee may replace some placement expense Cost avoidable by joint trenching 52 Summary • The number of homes that do not have broadband depends on the type and amount of broadband required; at least 3-6 million households lack any high-speed access • The cost to make broadband universally available also depends on the type and amount of broadband required, and probably falls in the $20-350 billion range • Different technologies have different upgrade paths, each with its own cost/performance characteristics • These costs are often driven more by opex than capex • The opex challenge is often magnified in rural areas due to difficult transport economics • As application use evolves and demand for high-speed services increases, only a small percentage of Americans may have access to a provider able to serve high-speed product markets • 4G deployment may affect demand as well as the value pool within any of these high-speed market segments • Depending on bandwidth requirements, 4G may even compete in rural areas, but could require large amounts of new spectrum • Some USF recipients have made progress in bringing broadband to rural America, but the fund faces systemic and structural problems • There are a number of other policies that potentially impact broadband performance and economics • Transport pricing and availability (e.g., special access) • Cost of driving fiber deeper into the network (e.g., rights of way and joint trenching) 53 Lessons from International Studies 54 • Review international broadband plans and related experience • Examine 22 countries with national broadband strategies - Conduct in-depth case studies on at least 10 • Focus on: - Innovative policies and tactics - Plan results - Delivery and execution challenges • Extract lessons and best practices for the U.S. International objectives 55 Select countries with broadband plans (initial screen) United KingdomIreland TaiwanHong Kong SwedenGermany SingaporeFrance NorwayFinland New Zealand Denmark NetherlandsCanada MexicoBrazil KoreaBelgium JapanAustria ItalyAustralia Drivers behind broadband plans have generally been: • National competitiveness • Human resource development • Innovation • Job creation and investment Bold: Case Studies Red: Countries visited so far 56 We will focus on elements relevant to U.S. plan U.K. Sweden Singapore Korea Japan Germany France Finland Denmark Canada Australia Country Rural Deployment Spectrum Reclamation Initiative National Purpose Initiatives Successful Adoption Programs Network Fiber Upgrade Area of focus for International team/IB 57 Korea: Three national broadband plans 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-12 • Deployment & Adoption • National backbone • Strategic fiber • IT training for 10 million citizens • Applications & National Purposes • Ubiquitous household access at 1Mbps+ • 100+Mbps to 60% of subscribers • E-Government and education • Goal: upgrade network to 1Gpbs by 2012 to urban areas • Convergence between telecom and broadcasting Source: Korean Ministry of Communications and Information Cyber Korea eKorea uKorea 58 Country program: Korea’s 1999 adoption initiative1 Goal: - Increase broadband use and adoption by lower income and elderly households Tactics: - Government sponsored free training and ongoing technical support provided to target population 4Including 20 hour week-long e-literacy courses - Government facilitated availability of heavily discounted PCs, sold via low- interest loans - Telco privatization and competition drove down broadband prices to less than $30/month Outcomes: - 10M PCs placed into homes increased home PC penetration from 19% in 1999 to 71% in 2000 - Home broadband adoption increased from 4M in 2000 to 12 Million by 2005 - Today, 83% of households in Korea have adopted broadband access iSource: Korean National Information Society Agency 59 Broadband Data Improvement Act (BDIA) data gathering efforts The BDIA requires the Commission to include in its annual Section 706 Report a detailed comparison of broadband service capability from 75 communities in at least 25 countries. - Comparison of U.S. communities with similar foreign communities based on various criteria Commission staff has gathered sub-national data and information to meet the requirements of the BDIA and to inform the FCC’s work on the National Broadband Plan. - Availability and pricing data - Demographic (community) data - Information on national broadband strategies - Market information 60 Initial hypothesis • Broadband plans need to be enduring strategies that require four or more years of continuous effort - Coordination and buy-in across Federal agencies and local governments • Program evaluations are needed to benchmark progress and enable course correction opportunities - Benchmarks are as important for national purposes as for deployment and adoption • Policy changes that are supported by consistent funding sources can enable long-range planning by agencies and the private sector 61 Spectrum 62 Discussion overview • Today we focus on the need for more spectrum • We are also analyzing options to make more efficient use of existing spectrum, through new technologies and mechanisms, but this is a topic for another day • Our presentation incorporates learnings from: - Workshops (spectrum, wireless deployment, wireless technology) - Field hearing (Austin, TX) - Submissions in the record - Research and team analysis 63 Summary • Mobile broadband use is exploding: bandwidth-hungry devices, apps, and users are driving increased demand for spectrum • Major players have all expressed a need to allocate more spectrum for broadband • Some models suggest a need for more than 1 GHz of total allocated spectrum • After decades of new allocations, the spectrum pipeline is drying up • It will take years for any new spectrum to reach the market, so we must act now 64 1 1 1 0 1 0 1 0 0 1 0 11 0 1 0 1 0 0 Spectrum is a key enabler Remote Health Monitoring Online Textbooks 1010100 111010100101 Video Streaming 10100001 Spectrum Required 10101110101110101 1011 10 10 00 01 65 Wireless is moving to broadband Yesterday Today Tomorrow Apps Devices Users Business Consumers & Business Consumers, Business & Machines 66 Mobile data usage is exploding 6 17 41 91 201 397 2008 2009 2010 2011 2012 2013 Petabytes per Month Source: Cisco VNI, 2009 129% CAGR 67 0 20 40 60 80 100 120 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 U n i t S a l e s i n t h e U S ( m i l l i o n s ) Smartphones Standard Wireless Telephones Smartphones are replacing standard phones Source: TIA, Wilkofsky Gruen Associates from “TIA’s 2009 ICT Market Review and Forecast”. Smartphone sales to overtake standard phones by 2011 68 Analysts project rapid growth in mobile broadband Forrester Research 67 84 100 114 127 139 0 20 40 60 80 100 120 140 160 2008 2009 2010 2011 2012 2013 M o b i l e d a t a u s e r s ( m i l l i o n s ) Yankee Group 1.0 2.7 6.3 11.9 17.7 23.3 29.4 0X 10X 20X 30X 2009 2010 2011 2012 2013 2014 2015 P r o j e c t e d D a t a T r a f f i c G r o w t h R e l a t i v e t o 2 0 0 9 Gartner 0% 5% 10% 15% 20% 25% 30% 35% 40% 2008 2009 2010 2011 2012 2013S m a r t p h o n e P e n e t r a t i o n Rysavy 0X 20X 40X 60X 80X 100X 2008 2010 2012 2014 2016 2018 P r o j e c t e d 3 G / 4 G T r a f f i c G r o w t h R e l a t i v e t o 2 0 0 9 69 Spectrum available for mobile broadband has tripled Old Stock Cellular 50 MHz PCS 120 MHz 170 MHz New Stock EBS/BRS 194 MHz AWS-1 90 MHz 700 MHz 70 MHz 364 MHz 534 MHz Total Stock 3X G block 10 MHz 70 Smartphones and Mobile PCs are driving traffic growth Standard Smartphone Mobile PC 450X Source: Cisco 30X “Mobile broadband handsets (speeds of 3.5G and higher) and portables will account for 83% of all mobile data traffic by 2013.” Cisco, 2009 Data usage relative to a standard handset 71 Record is clear: More spectrum needed Party Record AT&T Data usage on AT&T’s mobility network has increased 5000% in the past 3 years Clearwire 120 megahertz of contiguous spectrum is needed for true mobile broadband Fibertower 100MHz or more will be needed for wireless backhaul in the next few years NGMN Alliance Next generation mobile networks require 20 MHz channels and more than 120 MHz of harmonized spectrum T-Mobile Minimum 40 MHz deployment is necessary to enjoy the spectral efficiency and trunking benefits of LTE Verizon Wireless Might acquire more than 100 MHz of spectrum in the next five years, if it were available WCAI Mobile wireless broadband providers will require 150 MHz of spectrum or more to adequately meet consumer needs 72 840 760 1300 1720 1280 ITU projection of future spectrum needs Estimated U.S. Wireless Broadband Spectrum Requirements (MHz) Source: ITU, “Estimated spectrum bandwidth requirements for the future development of IMT-2000 and IMT-Advanced” 2010 2015 2020 Lower market development rate Higher market development rate 73 Spectrum Reallocation Is A Multi-Year Process Band First Step Available for Use Approximate Lag Time Cellular (AMPS) 1970 1981 11 years PCS 1989 1995 6 years 700 MHz 1996 2009 13 years AWS-1 2000 2006* 6 years * Incumbent relocation is ongoing 74 Pipeline: 50 MHz Spectrum Licenses Suitable for Mobile Broadband 1994-2001 2002-2008 The spectrum pipeline is drying up MDS* (BRS) 198 MHz 276 MHz 2009 Pipeline PCS A&B 60 MHz MDS* (BRS) 78 MHz PCS C 30 MHz PCS DEF 30 MHz AWS-1 90 MHz 700 MHz 52 MHz 700 MHz 18 MHz 700 MHz 10 MHz AWS-3 20 MHz AWS-2 20 MHz EBS* 116 MHz * In 2004 MDS/ITFS was rebanded to create the EBS/BRS band 75 Implications of the PSTN 76 The fundamental transition Voice- oriented (PSTN) Broadband multimedia oriented Mostly copper to fixed users Mostly fiber and wireless to fixed and mobile users A p p l i ca t i o n Infrastructure 77 Implications for policy • The transition from old to new is technology and market driven, not “managed” • Regulatory frameworks designed for the old must be actively reshaped to accelerate the pace and universality of the transition. In particular we must: - Redirect resources from propping up the old to efficiently encouraging the new (USF, intercarrier comp,…) - Decide which legacy policy goals are no longer necessary, and which remain important (emergency services, interconnection, carrier of last resort,…) - Ensure that no American is left stranded in the old world • The more rapidly we move to universal broadband, the lower the legacy costs incurred 78 Break: Fifteen minutes 79 Adoption—The cost of Digital Exclusion and Opportunities for Acceleration 80 Approximately two-thirds of American adults have adopted broadband at home 2008 2009 2008 2009 67% 64% 63% 63% Based on Nielsen in-home media surveys of American households Nielsen Based on subscriber counts from industry reported data Pike & Fischer Based on a mail survey of American and Canadian households and adults Forrester Research Group Based on a phone survey of American households and adults Pew Internet and American Life Broadband adoption Year Data source Methodology 81 Home BB adopters (63%) 20% No access (~4%) 0% 10% Have access, but have not adopted (33%) 40% 30% 60% 50% 70% 80% 90% 100% Reasons the remaining one-third have not adopted are not well understood • Limited data on barriers that non-adopters face • Transitioning non-adopters to broadband is different than technology transitions of the past • Overall adoption will grow naturally over time Source: Pew Internet & American Life Project, Home Broadband Adoption, June 2009 Reasons for non-adoption Percent of U.S. households 82 Adoption levels vary across demographic groups *Hispanics includes both English and Spanish speaking Hispanics; 63% based on survey of English-only respondents Source: Pew Internet & American Life Project, Home Broadband Adoption, June 2009 Avg. 63% RaceEducation Income Geography Age 40 46 65 61 72 77 46 67 88 71 35 83 71 52 30 30 90 80 70 60 50 40 30 20 100% 10 0 65+50-6430-4918-29 BlackWhiteRuralNon- rural $100K+$40- 50K <$20KCollege + Some college HS grad Less than HS Percent of American adults Hispanic* 83 Cost of digital exclusion is large and growing • Consumers who comparison shop in brick and mortar stores pay more for goods & services than those who comparison shop online • Study of car buyers showed that those who use online referral services and get price information online pay less than those who do not5 • Finding medical information without access to online health sources limits patients’knowledge, choices and care • 61% of American adults have searched for health information online; of those 60% say the online information affected a decision about treating an illness or condition4 • Non-adopters have increasingly limited resources to gather current events information • 40% of Americans say they get most of their news from the Internet (more than those who cite newspapers); the Wall Street Journal is three inches narrower today than it was in 20043 • Students without broadband connections lack access to the same level of information as their connected peers • ~65% of teens go online at home to complete Internet-related homework and 71% of teens say the Internet was their primary source for information for completing a recent school project2 • Getting a job is more difficult without access to online postings and the ability to submit applications online • In 2005, 77% of Fortune 500 Companies did not give jobseekers the option of responding offline to positions posted on the corporate careers website1 Employment Education News Healthcare Consumer welfare Market data Implication for non-adopters 1 See: http://www.taleo.com/research/articles/talent/don-miss-the-next-strategic-turn-115.html 2 Natalie Carlson, National Survey Finds Kids Give High Marks to High Speed, Hispanic PR Wire (April 2007) 3 Pew Research Center for the People and the Press (December 2008); news releases (December 2005) 4 Pew Internet & American Life Project , The Social Life of Health Information (June 2009) 5 Scott Morton, Fiona M., Zettelmeyer, Florian and Silva-Risso, Jorge M., Internet Car Retailing (February 2001) 84 Among non-adopters, lack of relevance cited as main reason for not having broadband at home 80% 70% 60% 50% Availability 17% Price 19% Usability 13% Relevance 50% 40% 0% 100% 10% 20% 30% 90% Usability: too difficult, waste of time, too old, physically unable Price: price must fall, too expensive, no computer Relevance: not interested in getting online, nothing could get me to switch, too busy, other unspecified reasons Non-broadband or Internet users citing price or availability as barrier are: Non-broadband or Internet users citing relevance or usability as a barrier are: Availability: broadband not available Source: Pew Internet & American Life Project, Home Broadband Adoption, June 2009 Broadband adoption levels Percent of dial-up or non-Internet users • Older: median age is 51 • Women: 60% • Black: 23% vs. 11% in sample • Low income: 39% vs. 16% in sample • Rural: 33% vs. 19% for sample • Older still: median age is 63 • Low income: 32% vs. 16% in sample 85 Survey questions will be designed around three themes for non-adopters • Are there broadband users in non-adopters’ homes? • Did non-adopters used to be Internet users? • Do non-adopters frequent places (e.g., libraries) where there are access points? • Do they encounter decision-points in their lives (educational choices, job search) where broadband access would be helpful? • Do they have the digital skills to use broadband? • Are disabilities a barrier to use? • Level of monthly bill • Cost of purchasing & owning hardware • Worries about online content • Concerns about sharing personal information online • Difficulty in getting gadgets to work • Unaware of broadband’s potential benefits How do attitudes about broadband and modern information gadgetry influence adoption? How does the personal context of a non-adopter influence adoption decision? How does affordability figure into adoption? 86 Not all non-adopters are the same; new survey will help us better understand differences • Segmentation to be built around non-adopters’ responses to questions on: -Attitudes -Affordability -Personal context • Segmentation of non-adopters helps us: -Understand size of various non-adopters groups -Determine nature of barriers facing different segments -Tailor solutions to address the specific barriers to adoption for each segment • Survey to be fielded by mid-October; data delivered to us in November • First time in U.S. this analysis has been done for non- adopters 87 Based on current data, we have segmented non- adopters and identified their barriers to adoption “Content with life offline”“Digitally isolated” “Resource-constrained” -or- “Access-constrained” “Inclined, but skill challenged” -or- “Inclined, but device challenged” P e r c e p t i o n : B B i s r e l e v a n t Proximity: digital support system Low Low High High New survey data will allow us to refine and size these segments HYPOTHESIS 88 Video case study Video clip for Tech Goes Home 89 Understanding existing programmatic efforts • 3 adoption-specific workshops with 21 participants • Broad discussions included: - Building the fact base - Importance of applications - Existing programmatic efforts • Majority of workshops discussed adoption or barriers, including: - State & local governments - Job training - Healthcare - Disability opportunities - Opportunities for small and disadvantaged businesses - E-gov/civic engagement • Current programs are diffuse and fragmented • Broadband means different things to different people • Successful programs share certain key elements 90 Current adoption programs are diffuse & fragmented • Cost support - Hardware - Service - Training • Access away from home • Digital literacy • Content based - Relevance - Usability • Adaptive technology Methods of Encouraging Adoption Stakeholders Involved from Every Sector 91 Successful programs focus on unique needs of target populations • Comprehensive programs and services • Focus on the household and not just anchor institutions • Community based services and institutions relevant to target populations • Intensive services • Human element is essential Key Program Elements1 Focus on Individual Needs Channel Career Center Workforce training graduates Resume creation, online job search, online applications School Vulnerable High School Students School work college & financial aid applications Senior Center Older Americans Connecting with grandchildren, health information Participants Example Uses Early Signs of Success2 68.8%83.3%Help my kids/ family with homework 68.1%86.3%Find and apply for jobs/ internships 68.1%82.4%Research educational opportunities % who used materials at least 1x/week since training % who learned something about… I wanted to learn… 1 Greg Goldman, Digital Impact Group, FCC Workshops 2 OMG Center for Collaborative Learning, “Learning More about What Works: Short-Term Client Outcomes of the Sustainable Broadband Adoption Pilot Program.” July 2009. Percentages based on those respondents who cited listed purpose as a reason for participation. 92 “Content with life offline” “Resource-constrained” -or- “Access-constrained” Proposed solutions should address segment-specific needs HYPOTHESIS Issues for consideration Segment size Government role Probability of success “Inclined, but skill challenged” -or- “Inclined, but device challenged” “Digitally isolated” P e r c e p t i o n : B B i s r e l e v a n t Proximity: digital support system Low Low High High Support Infrastructure Digital Literacy Outreach 93 Introduction to National Purposes 94 The plan shall include… d. A plan for use of broadband infrastructure and services in advancing: - Consumer welfare - Civic participation - Public safety and homeland security - Community development - Health care delivery - Energy independence and efficiency - Education - Worker training - Private sector investment - Entrepreneurial activity, job creation and economic growth - And other national purposes Source: American Recovery and Reinvestment Act of 2009, Title IV – Broadband Technology Opportunities Program, §6001(k)(2)(d) 95 Broadband is part of the solution to many of the country’s problems National Purposes Government Operations •Service delivery and efficient government •Improved performance •Transparency •Civic engagement •Policy •Smart grid •Smart home applications •Smart transportation •Telework Energy/ EnvironmentHealth Care •Electronic health records •Remote/ home monitoring •Mobile monitoring •Telemedicine •Health information exchange •American Graduation Initiative •STEM •Nat’l Ed Tech Plan •eBooks and content •Electronic student data management Education Public Safety •Interoperable mission critical voice and broadband network •Next-gen 9-1-1 •Alerts •Cybersecurity Economic Opportunity •Job creation and economic development •Job training and placement •Community development InclusivenessInnovation and investment Consumer Welfare 96 National purposes framing questions 1. For each area, what are the major priorities requiring broadband connectivity? What are the gaps in connectivity, if any, that need to be addressed? - What are the costs and benefits of closing these gaps? - How should the federal government proceed? 2. What are compelling applications, emerging technologies, use cases, and other ideas that could be enabled by broadband? - What are their costs and benefits? - What role should the federal government play in stimulating their development, deployment, and adoption? 97 Health Care 98 Health care areas of focus Source: IT priorities developed by the Department of Health and Human Services as part of their efforts to define “meaningful use” for the purposes of EHR incentive funding How broadband can further our nation’s goals in health Electronic Health Records •Regional Extension Centers •Beacon Communities •$40B adoption incentives – Computerized physician order entries – Drug checks – E-prescribing – Clinical decision support Telemedicine •Diagnosis and remote monitoring in the home •Online healthcare consultations for rural areas Mobile Monitoring •Extension of monitoring to even outside the home •Medical device interoperability Health Information Exchanges •Information sharing •Data fidelity and privacy 99 Broadband speed requirements vary for different applications Example applications Actual download speed demands (Mbps)1Content type 1-10+ (Speed impacts down/up time and render) • Google-Health • Onrad • NightHawk • Singleton Diagnostic • Academic research • Large download (or upload) usage 2-10• Real-time online health care consultations • SD streamed video 0.2-0.5 (Speed impacts down/up time and render) • Email communication & scheduling • Wellness programs (e.g. Nike+) • ePrescriptions • Basic download (or upload) usage 10-20+• Advanced telemedicine • Streamed procedures and diagnostic information • Enhanced video teleconferencing 1.2-2.0• Basic telemedicine• Video-conference + VOIP 0.2-0.5• Remote consultation• Voice over the Internet (VOIP) 20+• Remote procedures• HD streamed video N o n r e a l - t i m e R e a l - t i m e 1 Actual speeds are typically lower than “advertised” ISP speeds – see later materials for details Sources: California Broadband Task Force report; ADTRAN FCC submission; Speedmatters.com report; Technet Broadband Primer; ITIF report March 2009; FCC analysis; Skype; ITIF; Gary Kim – IPTV drives bandwidth article Symm. Symm. Symm. Symm. 100 Dramatic results in Veterans Affairs telehealth pilot Results Description • Application of telemedicine to management of chronic diseases – Heart failure – Diabetes • Home remote monitoring of dynamic parameters to pick up complications earlier • Chronic disease management – 19% decrease in hospitalizations (translates into cost savings of $2.2B/year) – 25% decrease in bed days of care • Diabetes-specific results – 27% decline in 4 year diabetes mortality rate Source: Chumbler NE et al: Mortality risk for diabetes patients in care coordination, home-telehealth program. Journal of Telemedicine and Telecare 2009:15:98-01; Bates DW et al; Veteran senate hearings (http://veterans.senate.gov) 101 Improved broadband may deliver strong incremental value 348 TotalMaintenance 88 Connect . 39 SW 173 HW 2 providers, New York City DHHM estimates Lifetime PV Expense Analysis1 $, thousands Hosted EHR economics ~ 18% cheaper… • Less tech expertise required: No need to own, operate, or update server • Real-time change in reimbursement code & software capability updates • Scalable offerings: volume and functionality can expand with the practice • Hosted data more secure than local servers 408 TotalMaintenance 176 Connect . 20 SW 137 HW Hosted Local 47 75 … with clear incremental value 1 Assumes 7% discount rate; re-purchase (or significantly upgrade) hardware every 3 years; no price changes Source: New York City Department of Health and Mental Hygiene 102 Multiple examples of impact from connectivity • 55% decrease in serious medical errors from prescription errors • Net savings of between $5-$10M per year • Nationally would result in $1B in avoided costs Program Demonstrated Impact • Congestive heart failure (CHF) is the #1 cause of hospitalization in the U.S. • Trials are testing remote sensors that prompt patients to present earlier therefore allowing earlier intervention • Potential cost savings of $5 to $7B/year Mobile Health Innovation • 13% decline in duplicate tests over five years • $12.8M annual savings • Nationally would result in $1.1B in avoided costs Sources: Regenstreif Institute; Chumbler NE et al: Mortality risk for diabetes patients in care coordination, home- telehealth program. Journal of Telemedicine and Telecare 2009:15:98-01; Bates DW et al: Effect of computerized physician order entry and a team intervention on prevention of serious medical errors. JAMA 280(15): 1311-1316 October 21. 1998. Jencks SF, et al: Rehospitalizations among Patients in the Medicare Fee-For-Service Program. N Engl J Med 2009, 360 1418-28. Health Affairs; Hillestad R , et al: Can electronic medical record systems transform health care? Potential health benefits, savings and costs, www.volunteer- ehealth.org/AHRQ/06072005/session/TN.ppt Computerized Physician Order Entry E-Prescribing 103 Different connectivity needs are required throughout the system U.S. health providers Number Patients (at home & beyond) >240M Pharmacies, labs, and radiology TBD Medical offices & private clinics ~220,000 Rural Clinics ~3,500 Rural hospitals ~2,900 Non-rural hospitals1 ~3,700 1 Urban community hospitals, federal government hospitals, no-federal psych hospitals, nonfederal LTC hospitals; hospital units of institutions Source: American Hospitals Association 104 •Speed and reliability requirements for national Health IT priorities and private sector innovation •Differences in requirements by segment •Health and financial impact of broadband enabled solutions Areas of focus Connectivity gaps •Current state of connectivity for each segment of the healthcare space •Needs that will not be satisfied by commercial carriers •Adoption barriers Appropriate interventions Areas of focus and key issues Value of broadband Key issues •Healthcare-specific infrastructure requirements •Needed changes to existing programs •Additional policy levers to close gaps 105 The FCC’s Rural Healthcare Program supports a pilot for connectivity Rural Health Care (RHC) Support Mechanism - Part of the FCC’s Universal Service Fund - Provides support for rural healthcare providers for difference (if any) between rural rates and urban rates for telecommunications services - Monthly support for rural healthcare providers to cover 25% of the cost of Internet access - $400 million dollars per year has been authorized for funding under the RHC support mechanism 8Less than 10% per year has been disbursed Pilot Program - Pilot program launched to broaden demand for rural health care funding (funds 85% of costs, including network design and build) - Currently there are 62 participants in the pilot program - Fifteen projects have received funding commitment letters for a total of $21.4 million - The Commission will examine ways to reform the RHC support mechanism after the Pilot Program ends on June 30, 2010. 106 Energy 107 What is the smart grid? Two-way flow of electricity and information to create an automated, widely distributed energy delivery network1 1 Smart Grid Roadmap, NIST 2009, DOE 2009 108 $15 $32 $6$0$5 $10 $15 $20 $25 $30 $35 $40 $45 EPRI (2005- 2025) $40 GeSI and BCG (2020) $35 The Brattle Group (2010- 2050) $14 Smart grid is estimated to create $6-40B value on an annual basis… …and decrease emissions by 60-480MM tons of CO2 109 230 600 100 200 300 400 500 EPRI (2030) 211 Brattle Group (2050) 132 GeSI and BCG (2020) 480 High Estimate Low Estimate High Estimate Low Estimate Benefits of the smart grid Sources: Normalized from “The iGrid Project”, The Brattle Group, July 2009; "Smart 2020: Enabling the Low Carbon Economy in the Information Age. United States Report Addendum“, GESI and BCG, Nov. 2008; “Power Delivery System of the Future: A Preliminary Estimate of Costs and Benefits”, EPRI, July 2004; “The Green Grid: Energy Savings and Carbon Emissions Reduced Enabled by a Smart Grid”, EPRI, Jun. 2008 Annualized value creation $, billions Annual emissions savings MM tons CO2 109 Smart Grid • What communications networks are optimal for the smart grid? • How available are these networks? • How can these networks be made more available and more suitable? Smart Home / Building Smart Transportation • What transportation applications are enabled by broadband? • How can advanced communications networks improve the efficiency of the transportation system? • How can communications maximize energy efficiency in the home/building? • What types of data will maximize energy efficiency, and how accessible is this data? • How will energy data drive innovation in the home/building? Energy & environment areas of focus How can broadband and communications further our national goals in energy and the environment? 110 State of the smart grid Deployment of smart meters is accelerating quickly, laying the groundwork for several consumer-oriented smart grid applications 150 100 0 2019 141 80 2018 122 73 2017 103 66 2016 84 59 2015 68 53 2014 55 47 42 41 2012 33 32 2011 24 24 2013 16 16 2009 8 8 50 2010 Source: “National Assessment of Demand Response Potential,” FERC, June 2009 Rapi d Sm art M eter Depl oym ent AMI meters, 2009-2019 (projected) Millions 111 The smart grid is being built to meet specific requirements using many different types of networks •2G wireless •Pager networks •POTS •Unlicensed RF mesh •802.15.4 (e.g. Zigbee) •MAS radios •Powerline Carrier (PLC) •3G wireless •WiMAX / LTE •DSL •T1 •VSAT •Fiber •Fiber •Microwave •WiMAX •Wi-Fi •Broadband over powerline (BPL) Narrowband Broadband C o m m e r c i a l P r i v a t e Capacity Latency Coverage Reliability Privacy Security Cost Longevity Smart grid network typesNetwork requirements 112 Utility data (typically 24hrs delayed) Smart home network architecture Utility Back Office Utility Advanced Meter Network tilit t t Public Internet li I t r t Home Area Network (HAN) Local Area Network (LAN) A smart home can include a commercial broadband connection to enable advanced consumer energy services Sends consumption data Consumer Broadband Connection ti HAN-LAN Bridge Receives Demand Response signals 113 End-User Data & Innovation •Identification of network requirements for each smart grid and smart transportation application •Availability of suitable networks Areas of focus Commercial vs. Private Networks •Ability for commercial networks to support smart grid and transportation network requirements •Alternatives to commercial networks •End-user ownership, privacy, security and accessibility of data •Best practices in data accessibility, security and innovation Areas of focus and key issues Network Requirements •Licensed spectrum needs and usage for smart grid applications •Alternatives to dedicated spectrum approaches •Effect of dedicated spectrum on smart grid deployment Key issues Spectrum 114 Education 115 Educational outcomes are weak and the achievement gap is staggering U.S. performance lags internationally, particularly for our students of color… A third of our students never graduate high school; for students of color, only half… Not nearly enough of our students graduate high school ready for college… Sources: TIMMS 2007; Urban Institute: Losing Our Future; ACT: Ready for College-level Literacy 449 570 457475 533 0 100 200 300 400 500 600 0 Black 50% Hispanic 53% White 75%80% 70 60 50 40 30 20 10 ACT-tested students with college level literacy skills Percent 70% 60 50 40 30 20 10 0 <$30k 33% $30- 100k 54% >$100k 70% W h i t e H i s p a n i c B l a c k J a p a n L e b a n o n Average TIMSS mathematics scores for 8th grade students, 2007 Points High school graduation rate Percent 116 Improve standards and assessments Foster and support effective teachers Develop advanced data systems Turn around the lowest- performing schools The Department of Education is tackling these challenges through an aggressive reform agenda U.S. Department of Education strategies 117 National Broadband Plan C o n t e n t & l e a r n i n g E d u c a t i o n I n n o v a t i o n D a t a , s t a n d a r d s I n f r a s t r u c t u r e T e a c h e r c a p a c i t y Improve standards and assessments Foster and support effective teachers Develop advanced data systems Turn around the lowest- performing schools Existing broadband infrastructure & E-Rate A national broadband plan could support these efforts U.S. Department of Education strategies 118 Education key questions How broadband can support efforts to improve education Content and Learning Key question: How can broadband support new forms of personalized content and learning resources? Teacher Capacity Key question: How can broadband help teachers focus on what matters for students? Data, Infrastructure, and Standards Key question: How can broadband provide a platform to support effective teaching and learning? 21st Century Innovation Key question: How can advances in use cases for broadband in education be supported? 119 Thanks to E-Rate, 94% of instructional rooms are online, and teachers are increasingly using the Internet… . . . But there is a need for improved connectivity given current and projected usage Sources: NETTS 2005 & 2007 Teacher Survey; Evaluation of EETT: EETT Final Report (2009); Final Report US Dept of Ed; Greaves Group; Education Workshop 8/09 Classroom usage is driving the need for improved connectivity Teachers using technology for educational tasks Percent 50% 40 30 20 10 0 Online Collab. 8%6% Web Research 36% 28% Instruction 39% 22% Prep 47% 31% 2007 2005 51%49% No Issues Issues Teachers reporting slow Internet issues Percent 0 1 2 3 4 5 6 2011 2013 1.0x 2.4x 5.2x 2008 Educational Bandwidth Usage Projection, indexed to 2008 120 The cost of digital exclusion is growing Sources: Pew Internet: Home Broadband Adoption 2009; Pew Internet, Internet and Education • 78% of students regularly use the Internet for classroom assignments Underperformers in education outcomes are non-adopters Non-adopters are at an educational disadvantage • 41% of students use email and messaging to contact teachers or classmates about schoolwork • 80% of parents say the Internet helps children with their schoolwork 40% 65% 46% 0% 10% 20% 30% 40% 50% 60% 70% 80% White Black Hispanic Adoption HS Graduation Rate American adults who have adopted broadband and high school graduation rates Percent 121 Broadband speed needs vary by application type Example applications Actualdownload speed demands (Mbps)1Content type 1 Actual speeds are typically lower than “advertised” ISP speeds – see later materials for details Sources: California Broadband Task Force report; ADTRAN FCC submission; Speedmatters.com report; Technet Broadband Primer; ITIF report March 2009; FCC analysis; Skype; ITIF; Gary Kim – IPTV drives bandwidth article N o n r e a l - t i m e R e a l - t i m e Symm. Symm. Symm. Symm. Symm. Symm. 0.5-5+ (Speed impacts down/up time and render) • Online Learning Systems (LMS) • Student Data Systems (SIS) • Professional Learning and Support systems • Large download (or upload) usage 0.3-0.5• Educational “serious” games (online/flash) • Practice tests / basic interactive content • Basic interaction 1-5• Streamed classroom instruction • Multi-cast conferences and meetings • SD streamed video 0.1-0.3 (Speed impacts down/up time and render) • E-Book / Digital Textbook downloads • Basic search applications • Basic download (or upload) usage 2-5+• Real-time simulation / learning / games • Remote instruction / classroom interaction • Collaborative professional development • 2-way advanced video interaction 5-10+• Immersive instructional coaching• Enhanced video teleconferencing 0.6-1.0• Videoconferences for instruction or professional development • Video-conference + VOIP 0.1-0.3• Replay live educational events & conferences• Streamed audio 0.1-0.3• Skype, Vonage, Custom VOIP• Voice over the Internet (VOIP) 10+• Rich content media for learning• HD streamed video 0.3-0.5• User created video (classroom demo’s, model instruction, certification prof. development) • Basic streamed video 1-5+• Self-directed learning modules• IP TV 122 Digital content and learning hold promise 1 Percent of students passing the course 2 Percent of “traditional student” hours required to complete the course 3 Percent of students who completed the course Sources: McKessock et al: Dynamic online homework system (2005); Carnegie Mellon, Open Learning Initiative, Lovett et al., and Joel Smith testimony to FCC The textbook market focuses on the needs of 37% of students, yet personalized content yields powerful results Online instruction produces similar performance outcomes and more than double the course completion rate with half the effort 40% 30 20 10 0 Individualized 39% Traditional 28% 5 15 25 35 Personalized content yields better student outcomes Percent of students getting an A or B grade 0 40 20 80 100% Completion3 99% 41% Effort/Hours2 50% 100% Outcomes1 85%84% 60 Hybrid TraditionalHybrid models yield greater efficiency Online learning results 123 Areas of focus and key issues 21st Century Innovation •Personalized learning experiences •Digital textbooks and eBook networks •Online learning content and systems •Digital literacy Areas of Focus Teacher capacity •Teacher support communities with best practices linked to standards and performance benchmarks •Tools to enable data-driven decision-making in the classroom •Online professional learning Data, infrastructure, and standards •Investment strategies with a focus on outcomes •Standards that drive entrepreneurial activity and investments Content and learning •ERate upgrade •Digital student records linked to standards and assessments, best practices, and personalized learning resources •Purchasing reform Key Issues 124 Civic Engagement/ Government Performance 125 Why broadband matters to government: an example $0.35 $2.87 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Cost to Process A Return Electronic Paper Source: IRS Inspector General Potential savings from mandating electronic filing Millions of dollars 2008 individual tax returns Percent of returns Processing costs for individual tax returns Dollars … yet it costs almost 8 times as much to process a paper return… 66.4 million paper tax returns were filed in 2008… …resulting in an inability to capture savings 42.5% 57.5% Paper Electronic $124 $66.60 Processing Costs Electronic Filing Savings 126 Government performance and civic engagement key questions Key question: How can government policies support the deployment and adoption of broadband? Key question: How can broadband deliver high performance and transform government? Key question: How can broadband transform civic engagement? How government should approach broadband Government-wide Policy Service Delivery and Efficient Government Civic Engagement 127 Broadband speed requirements vary for different applications Sample applications Actual download speed demands (Mbps)1Content type 20+• Cloud-based applications • Consolidation of data centers • Cloud Computing 2-10• Telecommuting / Continuity of government • Remote Access Data 0.5-5+ (Speed impacts down/up time and render) • Advanced, interactive online transactions • Social networking • Large download (or upload) usage 0.3-0.5• C-SPAN, YouTube (White House, Congress) • Basic streamed video 0.1-0.3 (Speed impacts down/up time and render) • E-Government 1.0 • Basic email, web-browsing • Downloading basic government forms • Basic download (or upload) usage 10+• Broadcast quality High Definition Television (HDTV) (NASA Multimedia) • High Definition streaming video 5-10+• Real-time video teleconferencing • Remote imaging (National Institutes of Health, Veterans Affairs) • Enhanced video teleconferencing 2-5+• Real-time interactive simulation training (Department of Defense, Department of Homeland Security) • 2-way video interaction 0.1-0.3• Advanced telecommunications• Voice over the Internet (VOIP) 1 Advertised speed is calculated at roughly 2x “actual” speed Sources: California Broadband Task Force report; ADTRAN FCC submission; Speedmatters.com report; Technet Broadband Primer; ITIF report March 2009; FCC analysis; Skype; ITIF; Gary Kim – IPTV drives bandwidth article; OfCom; FTTH FCC submission 128 Broadband policy is determined by multiple entities •Mayor •City Council •Zoning Board •Planning Commission Local Government •Governor •Legislature •Department of Commerce •Department of Information Technology •Public Utility Commission State Government •President of the United States •Congress •Department of Commerce –NTIA •Department of State •Federal Communications Commission Federal Government Problems noted in the record • Implementation of broadband policy has been hindered due to lack of coordination • Federal government agencies have worked at cross-purposes on broadband policy due to different agency priorities • Federal government policies have led state and local governments to implement inefficient and duplicative broadband deployment and adoption programs 129 Government performance and service delivery Sources: Office of Management and Budget Federal IT Spending Reports; Governance Studies - The Brookings Institution; ForeSee Results – American Customer Satisfaction Index: E-Government Satisfaction Index (2009) $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal Year B i l l i o n s o f D o l l a r s Actual Enacted Budget Request Federal IT expenditures Billions of dollars 49% 58% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2007 2008 Three or More Services Federal and state government websites offering online services Percent of websites … and the number of government websites offering three or more services online grows… Federal IT spend is over $70 billion per year… …yet satisfaction with online government services lags the private sector Public satisfaction with online services Percent of public 68.9% 73.6% 79.3%80.0% 62.0% 67.0% 72.0% 77.0% 82.0% Offline Government E-Gov (Q2 2009) E-Business (2008) E-Commerce (2008) 130 From Gov 1.0 to Gov 2.0: Civic engagement and the potential for digital exclusion • 54% of Americans who sent a “letter to the editor”, contacted a government official, or signed a petition did so online • 31% of bloggers have used their blog to explore political or social issues • 33% of Internet users had a profile on a social networking site and 31% of these social networking site members had engaged in activities with a civic or political focus 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2005 2006 2007 2008 Email Comments E-mail Updates Personalization PDA Access Federal and state government websites offering public outreach Percent Sources: 2007 Pew survey; Governance Studies - The Brookings Institution 131 Citizen engagement success stories and challenges 4,000%Return on Investment: $2 millionTotal Value: $50,000Total Cost: 30Total Days: 47Applications: Apps for Democracy Contest Changing Service Delivery: Washington, D.C. Honorable Mention: Apps for Democracy 2 Contest Results: Over 100 requests sent to DC city government Examples: Fixing potholes and streetlights Changing Civic Engagement: Maine Balanced Budget Tool Source: Government of the City of Washington, D.C. Challenges • Availability and quality of government data • Lack of coordination and best practice clearinghouses • Incorporating social media / web 2.0 technologies • Legislative impediments 132 Civic Engagement • How federal government coordination of broadband policy could assist state and local efforts to promote broadband deployment and adoption Areas of focus Government Services • How delivery of government services online could improve services and interactions between citizens and government Government Efficiency and Effectiveness • How broadband-enabled technologies could transform the way governments and citizens connect with each other, both domestically and internationally Areas of focus and key issues Government-wide Policy • How adopting broadband-enabled technologies throughout government and institutionalizing technology-based innovation could make government more efficient and productive Key issues 133 Innovation and Investment 134 What we’ve learned • Previous presentations detailed the challenges: - Deployment: head2rightService must be available head2rightEconomic prices head2rightHigh Performance – high speed & capacity, low latency, etc head2rightAttractive devices and applications - Spectrum: More is needed - Investment : Needs to be motivated by RoI - National purposes such as education, health care also require investment - And more . . . - Innovation is critical for addressing all of these elements 135 The current landscape • Great News: U.S. leads in many areas - Chipsets; software; applications and Internet services; Internetworking equipment • Not So Great News: - At most 2 providers of fixed broadband services will pass most homes - 50-80% of homes may get speeds they need from only one provider - Deployment costs for various geographies are significantly different - Broadband adoption is lagging in certain customer segments - Industry consensus that more spectrum is needed to meet future requirements 136 The need for investment • Investment has declined • Investment and innovation required across ecosystem: - Value to users & providers depends on end to end performance - Must invest in all areas: chipsets, user interface, software, network equipment and services, devices; etc • Rapid innovation in some sectors must not be limited by bottlenecks in others • Storm clouds may make investment more difficult: - Universal Service Fund - Public Switched Telephone Network U.S. venture capital investments across communications sectors has declined Telecommunications: Companies focused on the transmission of voice, data, wireless, and components. Networking and Equipment: Providers of data communication and fiber optics products and services. Semiconductors: Design, develop or manufacture semiconductor chips/microprocessors, diodes, and transistors. Source: MoneyTree Report, 2009. 0 100 200 300 400 500 600 700 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 M i l l i o n s Telecommunications Networking and Equipment Semiconductors U.S. venture capital investments Millions of dollars 137 Innovation depends on research and development • Long-term innovation depends on R&D • U.S. does not have the R&D institutions it once did - Bell Labs, DARPA et al, no longer play the same role - In 1990s, research focused on short-term gains • As noted by TIA (Telecommunications Industry Association): - Research is the backbone of the communications industry— a building block for the future development of advanced communications products and services - Developing leading-edge communications applications is complex, requiring time, money and long-term vision - The U.S. government must make long-term communications research a funding priority to sustain the advancement of information and communications technology as a vital area of long-term economic and societal growth 138 U.S. private sector R&D spending Sources: National Science Foundation, 2008, ICT Report, TIA 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 20 01 20 02 20 03 20 04 20 05 20 06 20 07 ICT R&D (% of GDP) Private Sector R&D (% of GDP) Private Sector R&D has returned its 2002 level Information and communications technology R&D has remained flat and is modestly less than in 2002 R&D as a Percent of GDP in the U.S. 0 0.5 1 1.5 19 84 19 92 20 00 20 08 R&D as a Percent of GDP in the U.S. 139 Tools to promote investment in R&D • Federal Communications Commission - Address major issues such as interconnection, openness to devices - Encourage competition - Provide flexible rules & standards • Federal Government Intervention: - ARRA & BTOP - Legislation - Economic incentives • Federal Government investment in R&D 140 Government role in R&D • Government has always played strong role in supporting fundamental science - How much of this is directed to ICT? Is it enough? - Has government been focusing too heavily on commercializable technologies rather than R&D that private sector will not undertake? • Federal government can provide the bridge between industry and academia to develop and execute an ICT R&D roadmap - Agencies can provide test beds for next-generation networks - Funding sources can offer longer-term funding opportunities – giving researchers the five-year research blocks they need for high-risk, high-reward initiatives • Broadband team will focus on how to promote R&D 141 Disabilities 142 Broadband usage and people with disabilities • U.S. population with disabilities: 54 million - 35 million with severe disabilities - Include speech, hearing, vision, mobility, and intellectual disabilities • Internet usage: less than half - Fewer than 30.8% v. more than 63.6% - Research from 2003; needs updating Sources: Brault, Matthew, Americans with Disabilities: 2005, Current Population Reports, P70-117, U.S. Census Bureau, Washington, D.C. 20008 at 3; Dobrasky, Kerry & Hargittai, Eszter, “The Disability Divide in Internet Access and Use.” Information, Communication and Society. 9(3):313,325. June 2006 at http://eszter.com/research/a18-disabilitydivide.html 143 Deployment and people with disabilities Key Comments from Record • Accessibility embedded in design and development can be more efficient than retroactive solutions • Potential for “functionally equivalent infrastructure” though building accessibility directly into infrastructure and “cloud computing” • Need for Next Generation 9-11 for reliable, real-time, interoperable voice, text and video emergency communications priority for many, including disability community • Need speed of service must be fast enough across all platforms to support accessible applications across multiple platforms Sources: Telecommunications for the Deaf and Hard of Hearing Comments at 5; Gregg Vanderheiden Comments, Workshop Transcript at 25-37; National Emergency Numbering Association Comments; Coalition of Organizations for Accessible Technology (COAT) Comments at 11 144 Adoption and usage barriers for people with disabilities Affordability Barriers • Poverty rate 2-3 times higher for people with disabilities • Specialized equipment, software adds to cost concerns - Screen readers > $1,000 - Assistive deaf-blind technologies: $5,000-$10,000 - Additional ongoing expenses (software maintenance, hardware repair, training) Sources: Erickson, W. and Lee, C (2008). 2007 Disability Status Report: United States, Ithaca, NY: Cornell University Rehabilitation Research and Training Center on Disability Demographics and Statistics at 34; COAT Comments at 7; Karen Peltz Strauss Comments, Workshop Transcript at 56-57 145 Adoption and usage barriers for people with disabilities (cont’d) Accessibility Barriers • Equipment, services, devices, and software – Lack of universal design for mass market products – Lack of interoperability with specialized equipment • Content – Captioning and video description of video programming transmitted on the Internet – Web pages – Social media platforms • User interfaces, programming guides and menus, tech support 146 Opportunities for advancing national purposes for people with disabilities Broadband as platform to close the already existing gaps for people with disabilities • Health care – Telemedicine/psychiatry with video sign language • Education – Bookshare provides largest accessible digital library for people with vision and learning disabilities • Public Safety – Potential of Next Generation 9-11 could be fully accessible Sources: World Institute on Disability Comments at 2; ZeroDivide Comments at 7; NENA Comments at 3 147 Next steps Building a record: • Released PN on critical issues • Established separate disabilities access category on Blogband • Full-day workshop on October 20 to elicit policy recommendations from a broad range of stakeholders 148 Consumers 149 Consumers in the digital economy: The potential to empower Sources: ComScore July 2009 panel data; Pew Internet & American Life Project, Online Shopping, February 2008; Pew Internet & American Life Project, The Internet & Consumer Choice, May 2008 • Reduces search costs • Improves bargaining position • Enables participation through rating products • 78% like the convenience • 68% say it save time • As many as 40% (depends on type of purchase) believe online information gets them better deals • 66% of Internet users have made a purchase online • Internet users spend 3% of their time at retail sites • 7th most popular destination in terms of users’ online time budget What do the statistics tell us? What do online buyers say about their experiences? What are the positive impacts? 150 Consumers in the digital economy: The potential for concern • Poor might benefit more than well- off from convenience and cost- saving of online commerce • But their heightened security concerns linked to lower incidence of online shopping: -29% of low-income broadband users have bought something online -82% of upper-income broadband users have purchased online Source: Pew Internet & American Life Project, Online Shopping, February 2008 Overall, 39% of online buyers have strong worries about giving out personal or credit card information online Transactional security particularly worries low income Americans… …which creates a paradox • 44% of low income Americans have strong concerns about giving out personal or credit card information online • 25% of upper income Americans have this level of concern 151 More transparency can address consumer issues • Better understanding of their broadband service: -Elements of monthly bill -Difference between real and advertised speeds • Tools to protect privacy of personal information -53% of Internet users have used tools & technologies to limit collection of data from their personal computer -Consumers want even more education on privacy protection tools, including: where to find, whether to trust them, how to use them -Workshop on consumer issues emphasized these points Source: Consumer Reports Internet Privacy Poll, September 2008 Opens up benefits of online marketplace to all consumers Encourages adoption & use Greater confidence in online environment More transparency 152 Economic Opportunity 153 The nature of work is changing rapidly in the digital age 38% 62% 18.8% 6.9% -1.6%-2.8% -10.6% 23.3% E d u c a t i o n / H e a l t h P r o f / b u s . s e r v i c e s I n f o r m a t i o n M i n i n g A g r i c u l t u r e M a n u f a c t u r i n g 27% 34% 42% 53% 65% 77% 2000 2001 2002 2003 2004 2005 Fortune 500 companies with online job postings and applications only1 Percent Key American firms moving hiring processes online… 2008 Percentage of employed using Internet as part of work2 Percent …while requiring “networked workers”… …in more professional and service-oriented jobs Projection of future areas of job growth/loss, 2006-163 Percent change Networked Not networked Sources: Taleo; Pew Internet and American Life Project; Bureau of Labor Statistics 154 Ensuring economic stability Key question: How can individuals and communities get access to critical economic stability services through broadband? Creating economic mobility Key question: How can broadband applications help more people find and train for employment opportunities? Economic opportunity key questions How broadband can support efforts to improve economic opportunity 155 Tens of millions of Americans could benefit from better access to safety net benefits but many are non-adopters Current numbers of Americans receiving benefits (estimated)1 Millions 51M 25M 51M 4M 35MSNAP TANF Social Security EITC Medicaid Sources: Office of Management and Budget; Social Security Administration; Pew Internet & American Life Project Profiles of individuals seeking Medicare, Medicaid, or Food Stamps (SNAP) information online (by income)2 Percent 17% 17% 12% 21% 12% 10% 31% 24% 22% 10% 10% 8% 0% 10% 20% 30% 40% 50% Less than $10,000 $10,000 $20,000 $25,000 $30,000 $40,000 Non-broadband Broadband Many who seek information about benefits online lack broadband At least 17% of all Americans are recipients of key government benefits 156 There is significant unmet demand for job training and placement services 3 8 , 9 5 5 1 4 , 1 0 6 3 1 , 2 7 0 4 1 , 2 2 9 3 1 , 0 5 9 2 2 , 2 4 7 2 8 , 7 2 9 5 4 , 0 6 0 L A S F M i a m i A t l a n t a C h i c a g o D e t r o i t N Y D a l l a s Unemployed population per one- stop in major metro areas1 People 3,379 Number of unemployed far exceeds ability for one-stops to serve adequately… Average # of people served in each one-stop per year (est.) 1Equals number of unemployed in major metro areas divided by number of one-stops within 10 miles of metro area Sources: Department of Labor, http://www.careeronestop.org, FCC analysis; Carnegie Mellon, Open Learning Initiative, Lovett et al., and Joel Smith testimony to FCC 90 80 70 60 50 40 30 20 100% 10 0 Completion 99% 41% Effort/Hours 50% 100% Outcomes 85%84% Hybrid Traditional …While online instruction offers the potential for superior outcomes Online learning results Percent 157 Broadband speed requirements vary for different economic opportunity applications Economic opportunity applications Actual download speed necessary (Mbps)1Content type • Basic download (or upload) usage • Basic email/browsing for job search • UL/DL forms for work support benefits • UL/DL online job training documents 0.1-0.3 (Speed impacts down/up time and render) • Large download (or upload) usage • Specialized telework situations (graphic design, video editing) 0.5-5+ (Speed impacts down/up time and render) • Voice over the Internet (VOIP) • Basic teleworking • Live credit counseling and financial education • ESL training 0.1-0.3 • Interactive Applications • Real-time skills assessment and score assessment for job seekers 0.3-0.5 • Basic streamed video • Watching job training videos 0.3-0.5 • Video-conference + VOIP • Online meetings with unemployment and SNAP benefits counselors 0.6-1.0 • 2-way video interaction • Specialized work-at-home situations 2-5+ • Enhanced video teleconferencing • Real-time interactive workforce development classes • Specific industry needs (TBD) 5-10+ N o n r e a l - t i m e R e a l - t i m e 1 Advertised speed calculated at roughly 2x “actual” speed Sources: California Broadband Task Force report; ADTRAN FCC submission; Speedmatters.com report; Technet Broadband Primer; ITIF report March 2009; FCC analysis; Skype; ITIF; Gary Kim – IPTV drives bandwidth article; OfCom; FTTH FCC submission Symm. Symm. Symm. Symm. Symm. 158 Areas of focus Workforce development • The reach and effectiveness of our federally-supported workforce development system • Potential for broadband applications to more precisely assess skills and match unemployed persons to jobs Areas of focus and key issues Community institutions • Those currently unserved by in-unit access or community hubs (e.g. libraries, community centers, public housing projects) • Effectiveness of community institution sites in driving economic opportunity • Key bottlenecks and barriers to access in current benefits disbursement process • Interdependencies between state and federal agencies for data collection and administration Access to services New methods of work • Extent to which broadband is creating new demands for certain skill sets, new businesses and localized industries • Impact of broadband on alternative and flexible work arrangements Key issues E c o n o m i c s t a bi l i t y E c o n o m i c m o bi l i t y 159 Public Safety and Cyber Security 160 Public safety, homeland security and cyber security key questions Public Safety Network •What are the requirements for broadband public safety communications? Next-Generation 9-1-1 •How should the 9-1-1 system be upgraded to support users of next generation broadband devices? Cyber Security and Commercial Network Survivability •How do we ensure that broadband communications networks are protected? Alerts •How can broadband be best utilized to support and enhance alerting? How broadband can support efforts to improve public safety and homeland security 161 • Interoperable • Nationwide • Resilient • Reliable • Specialized • Enhances mission critical voice over time GOAL Today: • Access only to mobile, wireless, commercial broadband • No specialized mobile, wireless broadband • Applications developing Ensuring public safety requires a high quality network 162 Broadband speed needs vary by application type Sample applications Actual download speed demands (Mbps)1Content type 0.5-5+ (Speed impacts down/up time and render) • Advanced web browsing, building schematics, site plans • Large download (or upload) usage 0.3-0.5• On-line interactive training, public safety answering point usage • Basic interaction 1-5• Incident based-response (e.g., views of accident scene) • SD streamed video 0.1-0.3 (Speed impacts down/up time and render) • E-mail • Web-browsing, government data base access • Basic download (or upload) usage 2-5+• Tele-medicine, interactive briefing• 2-way advanced video interaction 5-10+• HD Telemedicine (diagnostic imaging)• Enhanced video teleconferencing 0.6-1.0• Lower definition telemedicine• Video-conference + VOIP 0.1-0.3• Wiretapping• Streamed audio 0.1-0.3• Non-mission critical voice such as evacuation planning or tactical discussions • Voice over the Internet (VOIP) 10+• Evacuations, hostage situations, terrorist investigations • HD streamed video 0.3-0.5• Monitoring of high-risk target (e.g., nuclear facility) • Basic streamed video 1-5+• Tactical briefings• IP TV 1Actual speeds are typically lower than “advertised” ISP speeds – see later materials for details Sources: California Broadband Task Force report; ADTRAN FCC submission; Speedmatters.com report; Technet Broadband Primer; ITIF report March 2009; FCC analysis; Skype; ITIF; Gary Kim – IPTV drives bandwidth article N o n r e a l - t i m e R e a l - t i m e Symm. Symm. Symm. Symm. Symm. Symm. 163 9-1-1 calling patterns are changing as consumers adopt wireless 1 Year-end figures Sources: FCC Wireless Communications Bureau; CTIA – The Wireless Association Progression in number of E-911 calls1 100 120 60 80 C a l l v o l u m e ( i n m i l l i o n s ) Number of wireless calls (in millions) 0 20 40 1995 2000 2005 2008 20 51 Years 95 106 0 50 100 213 271300 Number of mobile subscribers (in millions) Uptick of mobile wireless subscribership1 150 200 250 C a l l v o l u m e ( i n m i l l i o n s ) 1995 2000 2005 2008 34 110 Years 164 Mobile data traffic is projected to increase significantly Source: Cisco, 2009 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2008 2009 2010 2011 2012 2013 Audio Video P2P Data TB of data/month Cisco forecasts two exabytes per month of mobile data traffic in2013 165 Cyber security issues affect nearly one-half of enterprises Source: CSI Crime & Security survey Government and private sector respondents that experienced security incidents Percent 2008: 517 government and private sector respondents Response Yes No Don’t Know 46 45 10 43 44 13 0 5 10 15 20 25 30 35 40 45 50 2007 2008 166 Cyber security attacks are becoming more sophisticated but easier to execute PASSWORD GUESSING SELF-REPLICATING CODE PASSWORD CRACKING EXPLOITING KNOWN VULNERABILITIES BURGLARIES HIJACKING SESSIONS NETWORK MANAGEMENT DIAGNOSIS GUI AUTOMATED PROBES/SCANS WWW ATTACKS DISTRIBUTED ATTACK TOOLS STAGED ATTACK ATTACK SOPHISTICATION INTRUDER’S KNOWLEDGE LOW HIGH 1980 1985 1990 1995 2000 DISABLING AUDITS BACK DOORS SWEEPERS SNIFFERS PACKET SPOOFING DENIAL OF SERVICE “STEALTH”/ADVANCED SCANNING TECHNIQUES CROSS SITE SCRIPTING Source: FCC NRIC 167 • Workshop will take place on September 30, 2009 • Welcoming comments by Commissioner Meredith Attwell Baker • Panels will discuss: - “How Broadband Technologies, Tools and Innovations Can Aid in Preventing Cyber Attacks on the Nation’s Critical Communications Infrastructure” - “How Broadband Technologies, Tools and Innovations Can Aid in Detecting Cyber Attacks and Aid in Restoring Systems After Attacks Occur” • Richard Pethia, CERT • Allan Sadowski, North Carolina State Highway Patrol • Greg Schaffer, DHS • Don Welch, Merit Network, Inc Cyber security workshop Panelists include: • Dale Drew, Level 3 • Marc Donner, Google • John Nagengast, AT&T • Andy Ogielski, Renesys 168 Alerting •Costs and resources necessary to satisfy broadband needs •Whether specialized broadband needs can be satisfied by commercial broadband service provider Key issues Next Generation 911 •Extent to which Next-generation 9-1-1 technologies and services are being deployed today •Regulatory roadblocks that may restrict more vigorous deployment Cyber Security And Commercial Network Survivability •Broadband technologies that could best enable improvements in alerting Areas of focus and key issues Nationwide Public Safety Network •Agency collaboration necessary to prevent, detect, and respond to cyber attacks •Extent to which cyber security best practices are being implemented by communications providers Areas of focus