February 23, 2011 12:16 PMNational Broadband Map ("the Map"), as part of the Recovery Act (at p.14) I was skeptical, but optimistic. After seeing the Map, when it was unveiled last Thursday (well, I really couldn't get in until Friday--there were that many hits), I think it actually exceeded my expectations.
Larry Strickling, the head of NTIA, and Anne Neville, who headed the NTIA mapping team, (along with many others at NTIA and the states) are to be warmly congratulated for their efforts. Is the Map perfect now? Of course not; but the Map is a work in progress, and it's only going to get better and more useful.
If you need some facts, here they are. The actual cost of the Map turns out to be $200 million over 5 years. The Map will be updated every 6 months, based on information from awardees of the NTIA's Broadband Technology Opportunity Program ("BTOP") grants, state information (the NTIA website also lists state broadband maps), and based on crowd-sourced information obtained from the public to update the Map (and correct inaccuracies).
I'm confident that the Map will pay for itself in multiples, and--in any event--will come nowhere near being the second most expensive visual effect in history. (The first, of course, being the special effects needed to make it look like Chuck Norris lost a fight with Bruce Lee in "Way of the Dragon.")
So how is the Map going to pay for itself? Well, aside from the obvious--which is in providing consumers information that allows them to learn about broadband availability/alternatives in their area--I see at least two big ways that the Map can increase consumer welfare: 1) by increasing broadband penetration, and 2) saving Americans money by imposing efficiency on the Universal Service Fund ("USF").
Increasing Broadband Penetration
The Map--because it is designed to be dynamic--serves as an excellent "ice breaker" between sources of supply and demand, and state mapping agencies/business development authorities. Even now, middle mile and long-haul carriers can superimpose their own network maps on the Map and see areas that may be demand-starved. Customers, and potential customers, can then approach state development agencies to inform them of latent demand--or even "invisible" demand.
An example of invisible demand might be an area that is rich in cheap power, but broadband-poor. Prior to the information-sharing that the Map will stimulate, it is possible that no one would have ever located data centers in that area. But, with the potential for broadband, and high capacity backhaul, data centers, remote healthcare, and wireless broadband providers might become more interested. One heretofore "invisible" anchor-tenant could be the catalyst to bring broadband to currently unserved areas. Similarly, state development agencies--with their own versions of the Map--are well situated to be a natural conduit for information between communities with latent/invisible demand and proximate middle mile/last mile carriers. Thus, the Map--for some areas--will become a catalyst in creating new broadband facilities/markets.
This is a really big "if", but if the FCC really wanted to get serious about bringing broadband to unserved areas in the cheapest way possible, the Map provides an excellent vehicle for reducing payments to areas where at least 2 providers already provide broadband. You see, the Map has a feature that allows viewers to track broadband availability by USF study area. Using this information, the FCC could better target funds to truly unserved areas.
The FCC could also eliminate existing inefficiencies by using the Map to either eliminating funding in multiple-provider areas, or by combining multiple-provider study areas with adjacent study areas that are unserved, or served by only 1 provider, to maximize the value of "reverse auctions." In this manner, "reverse auctions" would have meaning, because multiple bidders would be assured and consumers would get new infrastructure at the most efficient cost.
Bottom Line: Consumers should ultimately reap plenty of rewards from the Map. As an information-sharing device, the Map will stimulate markets in ways that cannot be predicted or quantified right now. Moreover, the Map could be used to promote efficient USF reform, but, unfortunately, the Map cannot overcome political cowardice--so maybe we shouldn't hold our breath on this one.