CNET Conversation with Julius Genachowski

The FCC Chairman talks with Molly Wood about his agency's plan to get everyone faster Internet.

CNET Conversation with Julius Genachowski Molly Wood: I am Molly Wood and welcome to CNET conversations. We’re very excited to be here in Washington DC, and I’m joined by the FCC Chairman, Julius Genachowski, who just presented the National Broadband Plan for improving America’s broadband infrastructure and that’s what we’re here to talk about today. Thank you so much. Julius Genachowski: Great, welcome to FCC. Molly Wood: Thank you, I’m excited to be here. I’ve had a wonderful Washington trip so far. I’m sure that most people will know by the time they see this but can you sort of broadly outline the goals of the National Broadband Plan or the Omnibus broadband initiative? Julius Genachowski: Sure. You know, as we tackle our economy, as we rebuild our economy coming out of this terrible period that we’ve been in it and we’re still in. It’s essential that we tackle the challenges and opportunities of the 21st Century infrastructure. And the core idea underlying the broadband plan is that our broadband infrastructure, our high speed internet infrastructure can be our engine for economic growth, job creation and innovation in the 21st century that we have to tackle that seriously. Now the reason to be concerned is that one, the US is lagging globally. Other countries are ahead of us on key matrix. Two, within the US, different communities are lagging. And three, the cause of not being on this infrastructure. The cause of digital exclusion are getting higher and higher whether you’re someone looking for a job, whether you’re a student, whether you’re someone interested in healthcare information. The cause of not being part of our information, economy and society are just getting higher. Molly Wood: And so I know you’ve presented a pretty broad plan obviously it addresses speed and infrastructure, and you know, health and energy policy, all that kind of thing. What happens next? It has to be approved by Congress, correct? Julius Genachowski: Well there are different pieces in it. It’s a broad plan as you say. It tackles broadband deployment issues that challenge that in some parts of the country. You can’t get broadband even if you don’t want it. Millions and millions of Americans, broadband just doesn’t reach. It tackles what we call the adoption issue. Right now, 65% of Americans have adopted broadband, 35% haven’t. That’s not good enough. If we were talking about those numbers for our electric grid or a telephone service, we’d say wow! We can’t have a functioning economy with statistics like that. And then third, is I mentioned the cause, the digital exclusion are getting higher. So the recommendations go to deployment, adoption. And then sorry, if I can add one other thing, Congress said in addition to looking at those goals. Look at the ways in which broadband can advance national objectives like education, energy, healthcare, public safety and make sure we have a plan to harness broadband for those goals. So that’s what we’ve put together, a terrific process with just a brilliant group of people who work very, very hard on it. And a collection of recommendations, a number of which go to the FCC itself because we have jurisdiction over our communications infrastructure. And a lot of the work we can now move on, act on at the FCC with open processes like the ones we’ve done. Some of the recommendations go to Congress because they require congressional action. Some recommendations are for other parts of government and they’re now being considered by other parts of government to see how they can take steps to advance our broadband goals. Molly Wood: Now one of the goals in the planets collecting pricing data and benchmarking speeds from different ISP in order to sort of see what the competitive environment is like. How soon can you start doing some of that? I think that’s something that particularly my audience really wants to see. Julius Genachowski: Here they do. Molly Wood: Yeah Julius Genachowski: Well, there’s a saying we’ve started. So one of the things we launched last week was an application on the internet and also on Smart Phones that allows users to measure the speeds where they are and it feeds into the data collection efforts that that we’re working on ultimately to be map. So if you go to Broadband.gov, you can download that application, test your home wired line. You can test your mobile line. You can also find places to report dead zones for mobile. This isn’t obviously the entirety of our data collection efforts. We have a whole series of plans and place to make sure that the FCC has the data it needs on broadband deployment on speeds, on pricing. So that we can make sure the market is working and that we can take all the steps we need to take to promote vibrant, robust competition. Molly Wood: So on that competition point actually, that was probably the number one concern that my users have is that they just don’t have the competition in their area. How can you and how can government in general ensure competition in that space? Julius Genachowski: Well, one thing we can do is make sure that consumers have the information they need to make the market work. And so one important initiative of the plan is a consumer transparency initiative where consumers will have access to much better information about the speeds that they’re getting, the nature of the services that they’re getting. Right now we hear endless reports about consumer confusion over broadband. And one of the recommendations is make sure that at a minimum, consumers have the information they need to make the market work. Some of it is quite complex but that’s our job, to roll up our sleeves and make sure that any entity that wants to invest, wants to compete has a fair chance to compete in the market place. And then the third major element iswhere you started which is data. The agency that we all took over here a few months ago was data starve. It didn’t have the information it needed to do the work that overtime this agency must do. And that’s why the data initiative is so important both making sure that we have the data that we need here to do our work. And also that we’re making public, the public’s data, so that lots of data foot soldiers around the country can have access to machine readable, searchable information and be part of our processes as we tackle these issues. Molly Wood: So the idea literally around data collection is that if consumers can find out in hard numbers that for example they’re not getting the broadband speeds that they’re paying for, that they’ll put competitive pressure on their providers? Julius Genachowski: That’s a key part of it. It’s two things. One is if you’ve signed up for service and the advertise speed is one number but you’re actually getting some lower number, you ought to know that and you ought to be able to complain about that. The other thing that we’re aiming toward is giving consumers more visibility and transparency about other speeds in different parts of the country. And so, if you’re in part of the country, you’re being offered, you know one speed. And then you come look and say, “Hey, you know, other places have larger speeds, you’re in a stronger position to make noise as a consumer about what you really want and to encourage a competitive response to that.” Obviously, all these pieces have to work together but empowering consumers has to be an important part of our competition strategy. Molly Wood: So the plan right now doesn’t include unbundling or sort of some open access provision. The idea that the people on the lines aren’t necessarily the same people that provides the service. Is the idea then that even if you can’t increase the number of companies offering service in this specific area that with this information, people should be able to say well, you know, it’s almost the iPhone example, right, where there was a lot of pressure on AT&T because the iPhone wasn’t working for people? Is that kind of a theory? Julius Genachowski: Yes, you know the empowering consumers to make the market work very, very important. Making sure that we lower barriers to new entrance, to existing competitors and giving them a greater fair chance to compete in the market very, very important. Molly Wood: And how can we do that? Julius Genachowski: Well there are a whole series of ways. Some of that involves one of the reasons that it’s challenging for some competitors to get going in markets is the cost of actually building out a network, whether it’s access to rights of way, towers if you’re a mobile company are very high. There are parts of the infrastructure. We’ve heard complaints that some of the different parts of the infrastructure that a competitive company needs to access in order to be able to provide a competitive service, that along the way, prices are too high and competition is too low. And those are things that the plan says, we should look at very seriously and we will. We think there are opportunities around unleashing spectrum. Not only mobile broadband which we talk about a lot, but also fixed wireless, and to encourage that as a potential competitor. There’s not going to be a silver bullet. We need to push forward on multiple strategies. While we’re doing it, we need to make sure that overall private investment in this ecosystem continues. In this country at the end of the day, the networks that we all use, wired and wireless for our broadband are going to be built by private companies. And we need to make sure that there are incentives to build out but we also need to make sure that there is vibrant, robust, healthy, fair competition. Molly Wood: When you talk about private industries actually, there’s obviously a lot of talk about Google and their big gigabyte experiment. Is Google going to get there before the government does, you think? Julius Genachowski: Well the government’s role is to create a climate where all the companies in the ecosystem are pushing the envelope on speeds, on deployment, on adoption. That’s how we’re going to do so we’ve succeeded in the past. It’s how we’re going to succeed in the future. So from our perspective to see the companies make announcements about serious efforts to speed up our infrastructure to bring more competition, that’s very healthy. You mentioned one company; CISCO recently had an announcement about a router that can also help speed things up significantly on the internet. I hope we see more and more announcements by our companies to do this. And this by the way is one of the core goals of the plan. We’ve been the US, the leader in innovation in the world. We were the leader in the 20th century. We need to be the world’s leader in innovation in the 21st century. We’re not going to be that if we stand still because other countries aren’t standing still. And we’re going to be at risk of our global leadership in innovation if our broadband infrastructure isn’t world class. If innovators and entrepreneurs around the world could just as easily launch, develop in other markets, they might. We need to make sure that we have the infrastructure here and the market here. So that the flow of intellectual capital is here that we’re creating the most innovative products here, launching them here, building and creating the jobs here and then exporting them from here to other parts of the world. And that’s one of the reasons that this broadband plan is so essential to the economic health of our country. Molly Wood: So the FCC is going to a commitment to net neutrality, network neutrality in the past, that’s not in the plan. Do you feel like that’s an essential component of that innovation as keeping that network neutral and available to any device? Julius Genachowski: Absolutely. You know, making sure that we preserve the freedom and openness of the internet is going to be essential to making sure that we have a world leading innovative, competitive internet. It has work for us for the last 20 years, any entrepreneur, any innovator, and any speaker can get on the internet and know that they can reach an audience and let the audience, let the market decide. Let internet users decide what technology wins or loses, what product or service wins or loses. This is just essential. We don’t want to see a vulcanized, closed off internet here. That will be a negative for investment and negative for competition, and a negative for keeping the US the world leader in this infrastructure. So making sure that the internet remains open and free is vital. Molly Wood: There is also some heartwarming language and a plan about copyright protection. You said it must not stifle innovation over burden lawful uses of copyrighted works or compromise consumer’s privacy rights. But almost the logger heads, it seems we have the act agreement. What is your position on the act if really and do you feel like that could potentially damage this commitment to the various? Julius Genachowski: Well let me tell you how I look at the copyright issues on the internet. I believe very, very strongly that we need an open internet for innovators and entrepreneurs. I also think we need an internet that’s a safe place for businesses to do business. And if you are a speaker, a contact creator, you ought to be able to make a business doing that on the internet and unlawful infringement of copyright can disincentivize the kind of activity that we need to see. So we need an internet that’s both open and that’s safe and trusted. Just like if we were talking about Town Square. We need Town Squares that are open for free speech and vibrant discussion and for people to open up stories and everything else. We also need the businesses to know and the speakers to know that “Hey, this is a safe place to do business, a safe place to speak”. And we all have to work together to get there. And I think it’s possible. I think that increasingly everyone who’s looked at this is saying, you know what, an internet that is open for legal content and that develops reasonable fair ways to make sure that copyright can be enforced, not over inclusive, not that the punish is lawful conductor that goes after kids. But these goals of a free and open internet and one that’s safe for businesses to do business, we can accomplish them both and we can do it in a way that keeps the US the world leader. Molly Wood: So one of the controversial parts of the plan seems to come down to spectrum, that there’s been some push back from the broadcast industry about this idea of giving up some spectrum for future use. And there’s kind of our users phrase it almost there’s a rumor on the internet that if you are able to reclaim spectrum for use in terms of providing broadband internet access that that could affect over the air broadcast television. Julius Genachowski: Well the first point is that mobile broadband has extraordinary opportunity for our country, for our economy, for individuals. We all know this now. It’s just when you think about it, you know, the smart phones didn’t really exist 18 and 20 months ago. And now they’re almost knocking over our mobile networks because the capacity, the demands are so high. So Smart Phone uses about three times as much capacity as an old cell phone. An AirCard if you take your laptop and put in an AirCard in, and connect to the internet that way, that uses 150 times. Our major, our record shows that projections for mobile broadband capacity, the demands in our mobile broadband networks over the next few years are going to increase 40 fold, 30 fold. But the manner of spectrum coming online is much, much less. So this is just a huge potential looming crisis, that if we wait until it’s too late, it will be terrible for a mobile broadband infrastructure, terrible for our economy, terrible for all of us who want to use mobile devices whether their phones or laptops to connect to the internet and we have to start tackling it now. The challenge is there are no easy pickings on the spectrum chart. And there’s no spectrum that’s sitting around completely unused and we have to look at creative ways to free up spectrum for mobile broadband. And there are a number of different ideas along these lines in the broadband plan but for certainly one of the big ideas are to develop a plan that would create a mechanism for broadcasters who want to participate in what the plan calls in incentive option to do it. So if I could post for a minute on broadcasting, your broadcaster broadcast over 6 megahertz channels. And in the digital world that equates to almost 20 megabytes a second, little bit under that. And that equates to not one stream of video programming but as many as five or six. And one of the ideas is wait, you know, in some markets, especially larger markets where we have most of the mobile broadband congestion problems can’t we find a way for broadcasters to share spectrum. To continue to transmit free over the area their viewers to do what they’re doing and what they plan to do. But by sharing on a single transmission facility, cut their operating cost in half or if three shares, cut their operating cost even more. In doing that, they would be able to continue to offer service, free service for their viewers. We’d get spectrum back that can be put to use for license and unlicensed broadband. We would auction of a significant part of that. That would raise billions of dollars for the treasury and you know, we sure know how much we need that now. Molly Wood: Right Julius Genachowski: So we’ve put out through this plan some ideas on how to do long term, medium of long term spectrum planning for the country that really should be a win-win for our economy, for broadcasters and their viewers and for mobile broadband, and all consumers in mobile broadband. Molly Wood: So definitely not trying to get rid off over the air television. Julius Genachowski: No, no, no. Now look, the -- Molly Wood: To be sure people on that point entirely. Julius Genachowski: Yeah, this plan doesn’t shut down over the air TV. It shouldn’t. You know, even though about 90% of people now get their over the air signals, not over the air but through cable or satellite, there’s still 10% of people who do get it over the yards. Millions of Americans who rely over the air TV and we need to have a plan for them. It’s not fair to shut them down. At the same time those numbers tell you that maybe the spectrum isn’t being used as efficiently as it can be. We should tackle this. Molly Wood: Some of the user questions in particular seem to get around to the idea, broadband does kind of a right free access. And that is - that has come to that in some parts of the plan. So one user asked specifically how long do you the FCC think that it will take before free broadband becomes a reality. And if so, is that something that would involve like government monitoring? Julius Genachowski: Yeah. Well, it’s the adoption challenge is a critical one. In Congress in the statute that asks us to do this and a record shows that one of the biggest obstacles to universal adoption of broadband is affordability. Molly Wood: Right Julius Genachowski: And we suggested in the plan a series of ways to tackle the affordability issue. And one of the ideas that suggested for consideration on the plan is the possibility that we continue to be as creative as we can with spectrum policies and consider possibilities for spectrum based, broadband services that are free or low cost. We’d also should try to identify ways where we can incentivize or encourage businesses to build business models that are based on free. But anything that we can do to tackle the affordability issue is important because our aim shouldn’t be anything less than universal broadband adoption. Molly Wood: And then quickly there’s the over arching question that could affect all of these of course which is whether the FCC has the power now under the Communications Act to affect these changes. What’s happening there and when you end to spectrum there? Julius Genachowski: Sure. We have the power. The FCC is in the pass taking many actions in the broadband area. And I expect that we’ll continue to have it. There is litigation going on out there that raises some questions. We’re arguing strongly that we have a need to have the authority to take sensible steps to promote competition, to promote broadband to rule America, to protect and empower consumers. But I’m confident that we’ll continue to have the authority that we need. Molly Wood: Great. Well it is a bold plan. There’s a lot that’s interesting in there. We didn’t even get to video, set up access but everyone should go ahead and read it. And I want to thank you so much for joining us today. This has been another CNET conversation. You can join us the Conversation at CNET.com/conversations and thank you so much for watching.