A new report on broadband investments estimates telecom industry capital investment at $69 billion in 2008 and $60 billion in 2009. About half that amount -- about $30 billion annually -- was spent on broadband infrastructure.
The FCC National Broadband Plan task force asked the Columbia Institute for Tele-Information (CITI) to prepare a report on broadband deployment based on publically announced data from American companies.
According to the CITI report, industry analysts project $182 billion of additional investment over the next six years. Broadband providers will invest primarily in new wireless networks and upgrades to wireline networks.
The explosion of online video usage is driving the need for much of the speed and network upgrades.
This level of private capital investment will dwarf public spending. The federal stimulus program allocates $4.2 billion in one-time broadband deployment grants and universal service subsidies (which today do not support broadband) total $7 billion annually.
Since private capital will largely pay for broadband build-out, policymakers must make sure that rules to protect an open Internet do not deter private sector investment incentives.
According to the report by the Columbia Institute for Tele-Information (CITI), in four to five years 95 percent of households will have wireline broadband access. In addition, 90 percent of homes will have the option of 50 mbps downstream broadband from at least one provider. The FCC commissioned the report.
However, between 5 and 9 percent of American households will have "significantly inferior choices for broadband" as compared to the rest of the country." These homes will have the option of satellite broadband, which will continue to be slower and less effective than terrestrial broadband.
Another widening gap is the one between deployment and adoption. In 2008, broadband was available to 89 percent of households but was adopted by 57 percent. By 2015, 95 percent of households will have access, but adoption will remain much lower at about 69 percent.
The FCC is requesting public comment on how useful readers found the report.