Obama adviser looks at U.S.-built broadband network

A senior adviser to President Obama is touting the idea of spending tens of billions of dollars in public funds to build a nationwide, state-of-the-art broadband network featuring speeds 100 times faster than today's technology.

While there has been no formal Obama administration commitment to such infrastructure investment, Susan Crawford, special assistant to the president for science, technology and innovation policy, has said she is "personally intrigued" by an ambitious plan by Australian Prime Minister Kevin Rudd.

His plan proposes a public-private partnership that would invest up to $33 billion over eight years to build and operate a fiber-optic broadband network reaching 90 percent of homes and workplaces. Wireless and satellite technology would be used to reach the remaining 10 percent in the outback.

Obama and congressional Democrats have backed a $7.2 billion cash infusion to stimulate domestic broadband investment as part of this year's economic stimulus package, but experts have acknowledged that gaps in availability and bandwidth will remain, with pockets of the United States left with no service or antiquated technology.

Proponents of Australia's program argue that the government-subsidized network promises myriad opportunities for online businesses and enhancements to energy efficiency, media distribution and public safety.

A chief concern here is that a public broadband network would be costly -- upward of $430 billion. While U.S. consumers would benefit from the increased competition and lower monthly rates, they would foot the bill through tax dollars.

"I think it's a pipe dream at this point," said a telecommunications industry source, who added, "Good luck finding the money in this fiscal environment."

Other industry sources also cautioned that a government-subsidized network might dissuade private sector investment, leaving Americans with fewer options down the road. "You can't just build it and you're done," one critic cautioned, emphasizing the government would have to spend billions on upgrades and would be saddled with customer service responsibilities. "The government's continually going to have this 'white whale' it's going to have to keep pouring money into."

As the FCC prepares a national broadband strategy to be presented to Congress by Feb. 17, there's already speculation that the agency -- at the prodding of the White House -- will give serious thought to adapting Australia's model for the United States.

Crawford, a member of Obama's National Economic Council, raised eyebrows when she discussed Australia's plan at a policy forum in April.

"Simply put, a digital economy requires fiber, and Australia is making the determination that for that to work it will require a utility approach," Crawford said, noting that Singapore is making a similar investment and Britain and the Netherlands are exploring the concept.

"These governments understand that a wholesale network can deliver massive social and economic benefits," she said, referring to capacity that would be made available to carriers at reduced rates.