The FTC wants Intel to grow up and start acting like a responsible company.
At least that's the goal behind the agency's lawsuit against the chipmaker. Filed on Wednesday, the FTC's suit charges Intel with a host of offenses, including using threats and rewards to convince PC makers not to buy chips from the competition, altering its compiler to weaken the performance of rival chips like those made by AMD, and preserving its CPU monopoly by stifling the market for GPUs (graphics processing units) made by Nvidia and other manufacturers.
On Wednesday, the FTC held a press conference in Washington in which it discussed why it launched the lawsuit now and what it hopes to gain.
Fielding questions from reporters, Richard Feinstein, director of the FTC's Bureau of Competition, explained that the allegations against Intel have been bubbling for the past 10 years. During that time, at each point in which Intel perceived a threat to its dominance, the company responded not by competing aggressively on its own merits but by behaving in a way that was exclusionary and detrimental to the competition and ultimately detrimental to consumers, said the FTC.
Federal officials said they chose now to file the suit in part because the allegations have continued and evolved over time, and also because many of the charges are fairly recent, such as Intel's perceived attacks on the GPU market.
Unlike other complainants against Intel, the FTC is not imposing any fines or financial penalties. Instead, the agency simply wants the company to try a little behavior modification. The government said it is looking for changes in Intel's conduct to help restore market competition.
In its complaint, the FTC provided a laundry list of remedies that it plans to impose on Intel if the company is found to have violated any laws.
The full list of 26 different dos and don'ts can be found in the FTC's complaint, but to name just a few:
- Intel can't directly or indirectly require customers to purchase only its CPUs or GPUs.
- Intel can't require a customer to buy a minimum or fixed number of processors from Intel.
- Intel can't withhold payments or other compensation to OEMs (original equipment manufacturers) just because the companies are not exclusively doing business with Intel.
- Intel can't directly price its processors so its customers pay below cost just to thwart the competition.
- Intel can't make hardware or software designed to inhibit processors made by competing companies.
- For customers who bought "defective" compilers, Intel must provide them with a working compiler at no cost and compensate them for the cost of recompiling their software using the new compiler.
- Intel can't coerce benchmarking organizations to adopt benchmarks that are deceptive or misleading.
- Intel must file periodic compliance reports with the FTC and for a period of time make available any advertisements, tests, reports, studies, and other documents that relate to the charges against it.
In charging Intel, Feinstein said that the FTC is relying on principles from Section 2 of the Sherman Act, which deals with monopolies, and Section 5 of the Federal Trade Commission Act, which covers deceptive or anticompetitive actions that affect consumers.
Section 5 also specifies that the outcome of the FTC's case can't be used to establish liability on Intel's part in any other antitrust actions. That may work in Intel's favor as its lawyers have certainly been putting in overtime dealing with the barrage of lawsuits against the company.
Intel recently closed the books on a 2004 antitrust lawsuit filed against it by AMD. As part of the settlement, the company agreed to pay its rival chipmaker $1.25 billion and promised to refrain from offering incentives to customers to keep them from doing business with AMD.
Intel is still appealing the record $1.45 billion fine imposed on it in May by the European Commission after the company was found guilty of violating European antitrust laws.
And in November, New York Attorney General Andrew Cuomo filed a federal lawsuit against Intel, accusing it of paying off computer makers like Dell with rebates to retain its monopoly and shove AMD out of the marketplace. Though this case is separate and distinct from the FTC's suit, Feinstein did acknowledge that he spoke to and compared notes with the state attorney general.
With Intel already facing severe financial penalties from these other lawsuits, Feinstein said he didn't feel another fine was essential for the FTC's case. But he said that in theory the FTC can go into federal court and seek financial penalties if necessary.
Last-minute allegations
In response to the FTC's action, Intel held its own conference call Wednesday in which the company discussed the allegations in greater detail..
Intel spokesperson Chuck Mulloy told CNET that substantial common ground had been reached in the discussions between the company and the FTC, especially after Intel settled its suit with AMD. But negotiations broke down because the commission raised certain last-minute allegations, such as the benchmarking issue and the GPU matter, and because Intel felt some of the suggested remedies were over the top.
Mulloy said that the benchmarking and GPU concerns had never been addressed in the two years that the FTC had been investigating Intel, both formally and informally, and were added a few weeks prior to the lawsuit being filed. He said the commission issued a subpoena to Intel requesting information on the GPU issue on December 8, about a week before the suit was launched, and did not wait for a response from Intel.
The chipmaker was also unhappy with a couple of the remedies proposed by the FTC. One sticking point in particular was the notion of compulsory licensing, in which the commission would have required Intel to license its x86 architecture to other companies, which includes those trying to make their own chips compatible with Intel processors. But Intel objected because it considers the technology to be its own intellectual property worth tens of billions of dollars.
Mulloy also said that talks broke down because Intel felt the FTC was trying to micromanage the company's pricing schemes--dictating how and under what circumstances it could offer discounts to certain customers. He added that Intel did make some proposals to the commission on discounting schemes, but this issue was never resolved.
Intel's view is that this is overreach on the part of the FTC, said Mulloy. He feels Intel was on track to settle and was disappointed that it couldn't get it done.
To move the case along quickly, the FTC decided to have it heard before an administrative judge rather than a slower federal court. The speedier process of the administrative court will begin with a trial in September, which Feinstein believes will conclude by the end of the year. Depending on the outcome, there may or may not be further proceedings before the FTC. But ultimately, the case would be reviewed by the FTC for a final decision. If the judge rules against Intel and the company appeals, that could take the case to the middle of 2011.
Ultimately, Feinstein believes that Intel's actions have deprived the marketplace of the vigorous competition it needs, affecting innovation, prices, and consumer choice. Despite the gains in the microprocessor market, Feinstein said he believes it's hard to know what the market might have done over the past 10 years had it not been for Intel's conduct.
Updated December 18, 5:45 a.m. PST with response from Intel
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Vice President Joe Biden
(Credit: WhiteHouse.gov)Vice President Joe Biden on Thursday is scheduled to announce $2 billion in grants that will be used to build broadband networks in underserved communities.
The funding, which is part of the $7.2 billion that was set aside for broadband in President Obama's $787 billion economic recovery deal earlier this year, will start with an initial $182 million investment in 18 broadband projects in 17 states. Biden is announcing the stimulus grants in Dawsonville, Ga.
The money is specifically meant to expand affordable broadband access to underserved areas of the U.S. Officials would not name which companies will be getting the grants that were announced on Thursday.
From BlackBerry smartphones to broadband Internet connections, President Obama understands that technology is an important economic and educational driver. High speed Internet access is seen as the cornerstone of the president's technology agenda, and he has emphasized the need for getting affordable broadband access to every American.
"The new broadband access will help underserved and often hard-hit communities overcome the distance and technology barrier by expanding connectivity between educational institutions, enabling remote medical consultations, and attracting new businesses as well as the jobs that come with them," the White House said in a statement.
The Federal Communications Commission is currently working on developing a national broadband plan that will provide a road map for achieving the goal of getting every American affordable access to high-speed Internet. A full report on the plan is due to Congress in mid-February.
Blair Levin, who is heading up the task force developing the national broadband plan for the FCC, has estimated that it could take as much as $20 billion to $350 billion to achieve the ultimate goal of ubiquitous broadband access. But he has acknowledged publicly on several occasions that the bulk of the investment will come from the private sector.
"The private sector is essential to this effort," Levin said. "Government spending will be limited. And competition is the best way to drive innovation. "
Still, at a meeting at the FCC on Wednesday, he said government funding will be necessary in places where the private sector is unable to find a viable business case. And he has proposed overhauling the $7 billion-a-year Universal Service Fund, which provides telephone access to rural communities, as one way to help fund such projects.
"Where funding is limited and where it's difficult to make a business case and where we don't want to go through the process of new legislation, there are ways to better utilize existing assets," he said.
But the USF alone will not be enough. And given that it will likely take years to expand the program, grants and government funding pumped into the system now will at least get the ball rolling on new deployments.
The Federal Trade Commission's complaint against Intel for alleged anticompetitive practices has a new twist: graphics chips.
To date, the antitrust actions of regulators worldwide toward Intel have focused on sale practices for central processing units, or CPUs, a market over which the company has fought heavily with Advanced Micro Devices. On Wednesday, however, the FTC spelled out a litany of allegations about Intel's alleged anticompetitive behavior in the market for graphics-processing units, or GPUs, in which Nvidia is a major player.
Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips but takes a distant second place in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.
Why graphics, and why now? "It would be really hard to sell the public on expending resources to take Intel through administrative proceedings when it had already paid over a billion dollars to AMD," said Joshua D. Wright, a professor at George Mason University School of Law and a scholar in residence at the Federal Trade Commission until 2008.
"[The FTC] needed to be seen as doing something new," Wright said.
"[Nvidia] becomes the remaining star witness, now that AMD has left the field," said Roger Kay, principal at Endpoint Technologies. "And the FTC's focus, which begins to look toward the future, has to take into account how graphics will fit in as computer technology develops," Kay said.
Intel General Counsel Doug Melamed asserted in a statement that the FTC complaint "is based largely on claims that the FTC added at the last minute and has not investigated," referring to the GPU allegations. And Melamed added in a conference call that some of these GPU allegations were made as recently as December 8.
One of the areas the FTC case zeroes in on is the burgeoning competition for chipsets in Netbooks--small, inexpensive laptops that are typically priced around $350. Netbooks are powered by Intel's Atom processor--and integrated graphics silicon built into the chipset. In this market, Nvidia also sells its Ion chipset, which competes with Intel's integrated graphics product.
... Read moreThe Federal Communications Commission is taking on difficult and controversial issues as it works toward developing a comprehensive national broadband plan.
On Wednesday the agency heard from an FCC task force on the progress that it's making in writing that broadband plan, which will be presented to Congress in February.
The FCC has been tasked with developing a plan that will get broadband services to all Americans. In working to come up with a comprehensive policy, the FCC has tackled several controversial issues, most notably reforming the Universal Service Fund, reallocating wireless spectrum, and forcing more competition in the market for cable set-top boxes.
One of the top items on the FCC task force's to-do list is reforming the $7 billion rural phone subsidy program called the Universal Service Fund. This program, which also provides funding for schools and libraries through its E-rate program, is funded by consumers, who are charged extra fees on their long-distance phone bills. Specifically, the agency wants to expand the program to help fund broadband service in parts of the country where private industry doesn't find it profitable to invest.
The task force didn't provide long-term recommendations for transitioning USF into funding broadband deployments. But in the short term, it suggested extending some current programs such as life-line link-up to schools and other public areas to provide more access to unemployed people who may not have Internet connectivity at home. The idea is that these individuals can use broadband in these public areas to look for jobs.
FCC Chairman Julius Genachowski said it will take time to get reforms in place. He noted that the national broadband plan won't directly affect USF, but he said the program, once it's expanded, will eventually help fund and become a key part of helping get broadband to underserved parts of the country.
"It's tempting to kick the can [USF reform} further down the road," he said. "But for many reasons it's important to begin tackling these issues now. We must make sure that the fund fully supports the technology of today and tomorrow, not just the technology of the past."
But the process is going to be a long one, he said. And he wouldn't comment on whether true reform could be achieved in his term as chairman.
The FCC task force also reiterated its plans to re-evaluate spectrum issues. Genachowski has said publicly that one of his top priorities is reallocating and finding more spectrum that can be used to build wireless broadband services. Both he and the CTIA, a trade group representing the wireless industry, say there is a looming spectrum crisis that could result in dire consequences without adequate attention now.
During its report to the commission, the broadband task force said it is working with Congress to inventory and assess current spectrum usage in the U.S. It is calling for Congress to also require periodic review of spectrum uses and to find ways to clear spectrum bands that aren't serving other uses, such as wireless broadband.
The task force also said during its presentation Wednesday that it's looking at ways to spur more competition in the cable set-top box market. The group said that a lack of competition in the set-top box market has also resulted in a lack of innovation. The agency feels that more competition in this market would spur companies to develop new Internet applications and services that could be accessed via TVs.
The FCC is considering requiring paid TV providers, such as Comcast, Time Warner Cable, AT&T, and Verizon Communications to supply a low-cost network interface device that would allow people to access the Internet on their TVs and to access cable TV without using a cable box.
WASHINGTON--The wireless and TV broadcasting industries faced off for the first time at a congressional subcommittee meeting on the Hill on Tuesday, setting in motion what could be a long drawn out battle over whether wireless spectrum should be reallocated and where the government will get this new spectrum.
Steve Largent, president and CEO of CTIA, the wireless industry group, and Gordon Smith of the National Association of Broadcasters, were among the witnesses gathered before the House Energy and Commerce Committee's Subcommittee on Communications, Technology and the Internet to discuss what the CTIA and the Federal Communications Commission have called a looming spectrum crisis.
CTIA and FCC Chairman Julius Genachowski have said that finding new spectrum as well as new ways to use existing spectrum more efficiently are top priorities that need to be addressed to keep up with growing demand for new wireless broadband services.
"Spectrum is our industry's backbone and it is what allows us to continue to innovate and create new apps, products, and services," Largent said in a statement. "Without this additional spectrum, our industry will cease to provide U.S. consumers with the most innovative and most competitive wireless offerings in the world."
The hearing comes just weeks after the CTIA ruffled broadcasters' feathers when it filed comments with the FCC suggesting that some of the additional spectrum it seeks for wireless broadband could come from unused TV broadcast spectrum. Broadcasters oppose giving up their spectrum. And some representatives for broadcasters say they don't believe that there is a spectrum crisis.
"There is no shortage of wireless spectrum in this country," said John Hane, counsel in the communications practice group of Pillsbury Winthrop Shaw Pittman, which represents the TV broadcast industry. "There is a lot of spectrum already available that could be used more efficiently. That is why we need these bills to take an inventory of what is currently being used."
Indeed, NAB and CTIA both said they support the passage of the Radio Spectrum Inventory Act, which would require the FCC and the U.S. National Telecommunications and Information Administration (NTIA) to inventory the wireless spectrum available in the U.S. It would also require those organization issue a public report on the government and private uses of the spectrum.
Smith of NAB also said during his testimony that it's important for Congress to look at all spectrum holders to ensure they are using their spectrum efficiently rather than singling out the broadcast industry.
"NAB believes that any inventory of spectrum should be comprehensive," he said in his prepared testimony. "Let's look at all bands and all services, including federal government bands. And let's view how each service is using its existing spectrum."
The NAB also said it supports another bill in the House, called the Spectrum Relocation Improvement Act, which would streamline the process for federal agencies to turn over unused spectrum so it can be auctioned to bidders in the private sector.
It's clear that the CTIA and FCC are taking on a big fight with calls for spectrum reallocation. And Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in an interview Tuesday that he admires the FCC for taking on such a battle.
"We certainly think that there is looming spectrum crisis," he said. "And I give the FCC chairman a great deal of credit for being courageous enough to lay out the problem and to seek what is best for consumers."
But he added that he also believes that the government needs to look at all sources of spectrum in solving this problem.
"That's why we agree there should be a spectrum inventory done," he said.
But skeptics, such as Hane, believe that a full inventory will actually show that no spectrum crisis exists. He argues that Congress may realize once it evaluates the data that there is no real crisis and that the current allocation of spectrum is sufficient to handle future growth.
Specifically, he says that wireless operators could be doing more with Wi-Fi and femto cell technology, which boosts radio signals indoors and then uses a wired broadband connection to send calls and data across a carriers network. He thinks this could help solve some of the efficiency problems that exist today instead of forcing TV broadcasters or government agencies to give up their spectrum.
But the CTIA argues that Wi-Fi and Femto cells are not enough to solve the spectrum shortage. Largent said additional spectrum is necessary to keep the U.S. competitive in the wireless market. And carriers such as AT&T, which is currently facing capacity issues due to heavy use of data services on devices like the iPhone, agree that freeing up more spectrum could help alleviate the problems the company currently faces.
Using a report from the International Telecommunications Union, CTIA calculates that by 2015 the U.S. and other developed nations will need about 1300 MHz spectrum to keep up with growing wireless broadband demand. Largent said in his testimony that the U.S. is lagging other nations in making additional spectrum available. Today, the U.S. has a little less than 500 MHz of spectrum that is commercially available. The trade group is asking the FCC to identify 800 MHz of additional spectrum that can be reallocated for wireless broadband use.
Largent pointed out that countries much smaller than the U.S. have much more spectrum available to them. For example, Germany, which has about 107 million wireless subscribers, will soon have about 645 MHz of spectrum available commercially. And the United Kingdom, which has only about 77 million subscribers will soon have 707 MHz of spectrum available for commercial purposes.
Largent said it is important for Congress to begin the spectrum reallocation process now because it takes years to identify and auction off new spectrum. The past two major FCC spectrum auctions each took more than 10 years to complete from start to finish.
NAB's Smith cautioned congressional leaders to not act hastily in reallocating spectrum. Not only could it hurt free over the air TV, but he said it could stifle innovation in improving digital TV. The U.S. just spent several years and billions of dollars converting to digital TV service, which uses spectrum more efficiently and often provides better service to consumers.
"Our national priorities should recognize the value that free over-the-air broadcasting brings to every American," Smith said in his testimony. "Broadcasting and broadband are not 'either/or' propositions as some have suggested; that's a false choice."
The bills before Congress are just the first step in what is likely to be a long battle for the wireless industry, government agencies and TV broadcasters.
"This is the first round in a 128-round match up," Hane said. "This is just getting started. So it's premature for the CTIA to begin talking about reallocating spectrum when we don't even have a full inventory of the spectrum that's currently being used."
President Obama announced Wednesday that he is directing nearly $600 million in American Recovery and Reinvestment Act awards to repair, rebuild, or altogether replace federally designated community health centers across the country, $88 million of which has been earmarked to help digitize medical records.
"These investments won't just increase efficiency and lower costs," Obama told community health leaders with members of Congress at his side. "They'll improve the quality of care as well, preventing countless medical errors and allowing providers to spend less time with paperwork and more time with patients."
The $508.5 million has already been awarded to 85 community health centers in what has been described as a "competitive process." These centers serve more than 17 million patients, almost half of whom reportedly have no health insurance.
As part of a larger effort to create jobs and overhaul the country's health system, this money comes from the $787 billion federal economic stimulus package approved earlier this year. About half of the $2 billion set aside to help improve health care for low-income and uninsured Americans has been spent already.
"This is what the Recovery Act is all about: providing immediate assistance for hard-hit families, improving our nation's infrastructure and creating new opportunities for stable, well-paid work," Vice President Joe Biden said in a statement.
The awards are expected to not only create new jobs in construction and health care, but also help provide care for more than half a million patients in underserved communities.
When it comes to the U.S. biofuels strategy, it's no longer just about ethanol.
The Department of Energy and Department of Agriculture announced on Friday that $564 million in stimulus act funding would be used toward constructing biorefineries to make liquid fuels from plants. Out of the 19 projects receiving funding, nearly half focus on the development of "drop-in" replacements for gasoline, diesel, or jet fuel. The rest focus on technologies for making ethanol or chemicals from sources other than corn. (Click this PDF for a full list of recipient projects).
Green crude from algae
(Credit: Sapphire Energy)In one example, San Diego-based Sapphire Energy, which counts Bill Gates as an investor, received a $54.5 million loan guarantee to build a pilot facility to convert algae into "green crude" that can replace jet fuel and diesel.
These fuels are the chemical equivalents of petroleum-based gasoline, diesel, and jet fuel so they can fit into the existing distribution fuels infrastructure, backers say.
The Energy Department-funded projects, which will be matched with private money for a total of $1.3 billion, are meant to test a number of biofuels techniques at demonstration scale. Chemical and energy company UOP, for example, received a total of $31.7 million to make a renewable diesel and jet fuel from wood wastes by treating biofeedstocks with hydrogen during its process.
Different methods to produce ethanol will also be tested through the Energy Department program. In the 2007 Energy Act, the federal government set an aggressive goal for production of advanced biofuels made from plants other than corn, such as agricultural residue and wood.
Algenol Biofuels received almost $59 million in total to produce ethanol from seawater algae and carbon dioxide in Freeport, Texas. Cellulosic-ethanol company ZeaChem, meanwhile, received $25 million from the Energy Department to supplement a planned project to make ethanol from poplar trees in Oregon using a microbe that breaks down wood. And waste-to-fuel companies BlueFire Ethanol and Enerkem received grants for their gasification-based systems for converting municipal solid waste into ethanol.
In a statement, Energy Secretary Steven Chu said advanced biofuels are a key part of the country's goal to create a cleaner, more sustainable transportation system and generate jobs.
In a statement, the Biotechnology Industry Organization said the government funding will help innovative companies attract capital from private sources to commercialize their technology.
eBay is criticizing a French court's ruling that orders the company to pay a $2.55 million fine to European conglomerate LVMH.
The auction giant and its European unit were fined 1.7 million euros on Monday by the Commercial Court of Paris, which ruled that the company violated a 2008 court order by not preventing the sale of legitimate LVMH perfumes and cosmetics. LVMH's brands include Christian Dior, Guerlain, and Givenchy perfumes.
In June 2008, the Commercial Court fined eBay $61 million in a lawsuit filed by the conglomerate, which is officially known as LVMH Moet Hennessy Louis Vuitton. LVMH had asserted that eBay had not done enough to stamp out the sale of fake LVMH goods on its site. The court went a step further, ruling that eBay-traded LVMH products--even authentic ones--were not being sold by an authorized reseller. As a result, eBay was ordered to remove all listings of these products.
eBay criticized the ruling then, saying it was an attempt by LVMH to "protect uncompetitive commercial practices." eBay likewise condemned the new ruling.
"Today's outcome hurts consumers by preventing them from buying and selling authentic items online," Alex von Schirmeister, general manager of eBay in France, said in a statement. "The injunction is an abuse of 'selective distribution.' It effectively enforces restrictive distribution contracts, which is anti-competitive."
Despite its objections, eBay argued that it has complied with the 2008 court order. The company said it has used state-of-the-art filtering software to check millions of listings each day, making thousands of authentic LVMH products invisible or inaccessible to French eBay users.
eBay also discounted the proof brought against it, claiming that LVMH offered details on only 1,341 listings out of 200 million posted on the auction site each day. eBay believes those listings were deliberately posted by people to sneak past the filters. In 1,091 of the listings targeted by LVMH, the seller did not accurately describe the item, using misspelled brand names, no brand names at all, or only pictures to describe the product.
As a result, eBay asserts that both the fine and ruling are unjustified. The fine itself is disproportionate given that eBay complied with the injunction," said von Schirmeister. "It is out of step with our legal victories in France, U.K., Germany, Belgium and the U.S."
eBay plans to appeal the new ruling and two other cases tied to LVMH. "We believe that the higher courts will overturn this ruling and ensure that e-commerce companies such as eBay will continue to provide a platform for buyers and sellers to trade authentic goods," said von Schirmeister.
eBay has been in and out of U.S. and European courtrooms for years, sued by companies trying to clamp down on the sale of fake versions of their legitimate products. It's faced courtroom battles with several European powerhouses, winning cases against L'Oreal and Tiffany, but losing suits filed by LVMH.
A few days after leaked e-mail messages appeared on the Internet, the U.S. Congress may probe whether prominent scientists who are advocates of global warming theories may have misrepresented the truth about climate change.
Sen. James Inhofe, an Oklahoma Republican, said on Monday the leaked correspondence suggested researchers "cooked the science to make this thing look as if the science was settled, when all the time of course we knew it was not," according to a transcript of a radio interview posted on his Web site. Aides for Rep. Darrell Issa, a California Republican, are also looking into the disclosure.
The leaked documents (see our previous coverage) come from the Climatic Research Unit of the University of East Anglia in eastern England. In global warming circles, the CRU wields outsize influence: it claims the world's largest temperature data set, and its work and mathematical models were incorporated into the United Nations Intergovernmental Panel on Climate Change's 2007 report. That report, in turn, is what the Environmental Protection Agency acknowledged it "relies on most heavily" when concluding that carbon dioxide emissions endanger public health and should be regulated.
Read more of "Congress May Probe Leaked Global Warming E-Mails" at CBSNews.com.
Spanish officials said earlier this week that the government will require service providers to offer broadband with speeds of at least 1 Mbps at regulated rates to residents living anywhere in the country.
A frenzy over a new Sony Ericsson smartphone at the GSMA Mobile World Congress in Barcelona last February.
(Credit: Marguerite Reardon/CNET )The Spanish telecommunications minister issued a statement Tuesday declaring that broadband would be added to the country's so-called "universal service," which guarantees reasonably priced telephone service to citizens, Reuters reported. The goal is to offer affordable broadband with speeds of at least 1 Mbps to residents by 2011.
To achieve this goal the Spanish government will require any service provider that gets universal service funds to also include broadband services to any home as part of its service.
Last month, Finland's minister of communications announced a similar plan. By July 1, 2010, every person in Finland will have the right to a 1 Mbps connection.
While the 1Mbps speeds don't sound like much, Spanish and Finnish officials say it's just the beginning. They hope this speed will serve as a starting point. And they believe that network operators will increase speeds over time.
Finland has already established aggressive public policies in place to encourage more ubiquitous and faster broadband deployments. In 2008, the Finnish government said it would pay a third of the cost to wire the country with fiber by 2015.
These mandates come at a time when the U.S. Federal Communications Commission is drafting a national broadband policy that outlines a plan for policies to help provide universal broadband to every American. The plan will be presented to Congress in February 2010.
In a report this week to the FCC, the task force working on the national broadband policy highlighted several barriers to universal broadband, including problems with the U.S. Universal Service Fund. But taking action to change the system is difficult.
The U.S. Universal Service Fund subsidizes the cost of building telephone infrastructure throughout the country in places where it is too expensive to deploy such services. Much of the money from this fund, which is collected from consumers as part of their monthly phone bills, is still being used to subsidize regular telephony service. Many policy makers and government officials say the program needs to be revised to include broadband. And the funding mechanism also needs to be revised.
While many consumer advocates believe the U.S. government should take a more active role in directing policy in way similar to what is happening in Finland and Spain, it's important to note that the U.S. is a much larger country by population and geography than either of these countries. To put it in context, Finland has about 5.3 million residents, compared to more than 300 million people who live in the U.S.
Developing and funding universal broadband access in the U.S. will cost anywhere between $20 billion and $350 billion, according to government estimates. That said, establishing a clear policy road map could help pave the way to truly affordable high speed Internet access everywhere in the U.S.
