Presentation: Universal Broadband: Targeting Investments to Deliver Broadband Services to All Americans

8/8/2019 Presentation: Universal Broadband: Targeting Investments to Deliver Broadband Services to All Americans

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Presentationby

Blair

LevinAspenInstituteCommunicationsandSocietyProgram

KnightCommissionAnniversarySymposium

TheNewseum,Sept.29,2010

Watchatwww.knightcomm.org


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TodaysAgenda

Vision

for

Broadband

Policy

Path

for

Universal

Service

Program

to

Serve

thatVision


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toenhance

accessand

capacitytouse

thenew

tools

of

knowledgeand

exchange


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TwoCoreTasks

DemocratizingEssentialToolsofProductivity

andCitizenship

Rethinking

Processes

to

Take

Advantage

of

ThoseToolstoImproveOurSociety


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AQuickLookBackAt

Technologyand

Progress

FromFirstCentury

to1500,populationandGDPincreaseat

constantrate

around

world(Malthusian

Trap) Then,somethinghappenedthatgot

usout

of

the

trap.


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TheIndustrialRevolution


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TwoDifferentIdeasfor

AdvancingTechnology

Ideaof

Pre

Industrial

RevolutionEngland

Inventingtheprovinceof

all Gaveinventorsthe

legallysanctionedrighttoexploittheirideasinexchange

for

making

the

inventionpublic(1624)

Ideaof

Pre

Industrial

RevolutionFrance

Inventingprovidenceof

thewealthy

Stategaveinventors

pensionsandprizes


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OneConsequence:

EnglishPer

Capita

GDP

Growth

243%

GreaterThanFrance


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AnotherConsequence:

ConstantInnovation

and

Growth

Addingthefuelofinteresttothefireofgenius (Lincoln)

alsoledtopatternof

inventionever

continuing

Unlikeearlier

technology

developmentsinChina,

IslamicGoldenAge


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Andintodayseconomy..

Everyoneisbecomingaknowledgeworker

Criticalfactorforsuccessistheprocessofknowledgeexchange

Knowledgeexchangeisdrivenbytheinterplayofnetworks,devicesandapplicationsasutilizedbypeople

Democratizationofknowledgeexchangeisfoundationforconstantinnovation,broadeconomicgrowthandhealthycommunities


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Arewethereyet?

No,butnotforlackof

tools..Thefutureishere.It's

justnotwidelydistributedyet.

WilliamGibson

Andsecond,

thinking

isnothere

dj vu allover

again


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TheFactory1910

Threedecades

after

central

electricity,

same

design

and

sameprocessesaswithfactoriespoweredbywater


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WhyDidItTakeSoLong?

DiffusionLag40YearstoGetto50%

SunkCost

OfExistingFactories

SunkThought

Expertisewasinexistingtechnology

Major

productivity

gains

not

be

realized

until

whole

processrethought

Gainscamethroughspecificapplicationsbuiltonnew

technology


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RightIdeasFromHistory

Weneedbroadlydistributed

toolsand

incentives

Rethinkingprocessesiskey

torealizing

gains

Buttheres

aproblem

whenwegetto

broadband


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TheMostPrevalentIdeain

BroadbandPolicy


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Theprimary

metric

for

judging

the

vision

ofanationsbroadbandpolicyisthespeed

ofthewireline networkthatreachesthe

mostrural

of

residents

TheMostPrevalentIdeain

BroadbandPolicy


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Itstime..

todrive

astake

through

that

idea


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ManyBadSeeds

Theprimary

metric for

judging

the

vision

ofanationsbroadbandpolicyisthespeed

ofthewireline network thatreachesthe

mostrural of

residents


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SummaryofBadandGoodIdeas

GoodideasBadIdeas

Ecosystem

Use/People

MobileandFixed

Right

sized

to

all

geographies

Rightsizedtoall

marketsegments

PrimaryMetric

Speed/Networks

Wireline

Rural

Residents


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BadSeed1

BadIdea GoodIdea

Focuson

primary

metric Focus

on

interplay

of

inputsandoutputs


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ThoughtExperiment

Whichwouldweprefer?

Greathammersbut

no

nails

or

blueprint

Greatnailsbutnohammerorblueprint

Greatblueprintbutnohammerornails


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ThoughtExperiment

Answer:

None. Allleadtodisaster.


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WeNeedPoliciesthatDriveEachElement

to

Continually

Improve

Leadsto

Better,Faster

Networks

Improvecasefordeployment

andupgradesthroughpolicies

suchas

lowering

costs

of

inputs

Leadstomore

compelling

Applicationsandtherefore

greater

adoptionand

willingnessto

spend

Leadsto

MoreRobust

Devices


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BadSeed2

BadIdea GoodIdea

Its

about

one

input

speed

Speed

matters

but

its

abouttheoutput;theway

peopleusespeedtodo

things


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Speedisnottheonlycriticalcharacteristic

Nonreal

time Real

time

Typical

applications:

Email

Webbrowsing

SDand

HD

video

download

Streamedvideoandmusic

VOIP(+video)orteleconference

IPTV

2wayvideogaming

Primary

performancedrivers:

Throughput Downloadand

Uploadspeeds

Availability/reliability

Throughput Downloadand

Uploadspeeds

Availability/reliability

Latency

Packetloss

Jitter

Speed primarily determines

userexperience

Bothspeed andquality

determineuser

experience


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Whereisthegreatestpotentialforimpact:

Applicationsforallorincreasedspeedforafew?

In

BillionsofDollars

Incrementalbenefitoffixed

speedstoresidentialareas

beyondcurrentaverage

unknown


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ButWeKnowBetterApplicationsCanDriveSavingsinHealthCare

Possiblesavings

from

implementationofelectronic

healthrecordsover15years

Possiblesavings

from

implementationofremote

monitoringover25years

$700B

in

potential

net

savings

over

1525

years

TotalPhysician

practicesHospitals

In

BillionsofD

ollars

TotalSkin

diseasePulmonary

diseaseDia

betesHeart

disease


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WeKnowBetterApplicationsCanDriveSavingsand

ImprovedEducationandJobTraining

Comparisonofresultsbetweentraditional

andhybridinstructionmodels(percentage)

ComparisonofAdvancedPlacement

scoresatFloridaVirtualSchoolandunder

traditionalinstructionalmodels

AdvancedPlacement

scores

(scale

of

15)

HybridTraditional

Completion

99%

41%

Effort/Hours

50%

100%

Outcomes

85%84%


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WeKnowBetterApplicationscanDriveSavings

andImprovedGovernmentServices

Comparisonof

costsofprocessing

taxreturns(Dollarsperuser)

Comparisonoftaxfilers

byhandv.Efile

(Percentage)

42%

Electronic

58%

Paper$333M

insavings

over

5years$0.35

$2.87

PaperElectronic


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BadSeed3

BadIdea GoodIdea

Its

about

wired

Its

about

both

mobile

and

fixed

Newmobiledevicesareenablingconvergenceof


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New mobile devices are enabling convergence of

basicfixedandmobileapplicationprofiles

Utility

Emerging

multimedia

Advanced

Fullmedia

Voice

Email

Onewaybrowsing

Kindleaccessing

ebooks

Basicsmartphones

accessingnews

High

Twowaybrowsing

Contentstreaming

anddownload

Smartphone

accessinglibraryto

upload/download

photos

Medium

SDvideostreaming

Interactive

gaming

orphysical

commands

iPhone enabling

voicerecognition

forperson

with

disabilityLow

P2PorHD

streaming

2wayHDvideo

teleconferencing

Minimumtoday,

butemerging(e.g.

Videoconferencing) Minimal

Exampleuses Application

and

device

example Similarity

tofixed

Smartphones sales to overtake standard phones


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Smartphones salestoovertakestandardphones

by2011

M bil t d i d i d 5


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Mobiletoexceedwiredaccessinunder5years

Most Important:


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MostImportant:

Wirelessas

Horizon

Industry

Economysuffering

fromdemandshock

Wirelessgenerating

newdemandinand

of

itself Wirelessgenerating

newdemandin

everyother

industry

Andweaint seen

nothingyet.


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BadIdea4

BadIdea GoodIdea

Its

about

rural

Its

about

right

sized

to

all

areas

Justifications for Rural Focused Policy logically


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JustificationsforRuralFocusedPolicylogically

leadtogreateremphasisonnonruralneeds

SocialJusticeEconomic

Argument

leads

to

higher

prioritytoadoption(90

million)thanunserved (15

25million)

Argument

leads

to

higher

prioritytohigherspeedsto

strategicdriverswhichare

generallynonrural

Particularly given how the cost of digital exclusion is large and growing


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Particularlygivenhowthecostofdigitalexclusionislargeandgrowing

In2005,77%ofFortune500Companiesdidnotgive

jobseekerstheoptionofrespondingofflineto

positionspostedonthecorporatecareerswebsite1

Gettingajobismoredifficult without

accesstoonlinepostingsandthe

abilitytosubmitapplicationsonline

~65%of

teens

go

online

at

home

to

complete

Internetrelatedhomeworkand71%ofteenssaythe

Internetwastheirprimarysourceforinformationfor

completingarecentschoolproject2

Studentswithout

broadband

connectionslackaccesstothesame

levelofinformation astheirconnected

peers

40%ofAmericanssaytheygetmostoftheirnews

fromthe

Internet

(more

than

those

who

cite

newspapers);theWallStreetJournalisthreeinches

narrowertodaythanitwasin20043

Nonadoptershaveincreasingly

limitedresources

to

gather

current

eventsinformation

61%ofAmericanadultshavesearchedforhealth

informationonline;ofthose60%saytheonline

informationaffected

adecision

about

treating

an

illnessorcondition4

Findingmedicalinformationwithout

accesstoonlinehealthsourceslimits

patients knowledge,choices

and

care

Studyofcarbuyersshowedthatthosewhouse

onlinereferralservicesandgetpriceinformation

onlinepaylessthanthosewhodonot5

Consumerswhocomparisonshopin

brickandmortarstorespaymorefor

goods&services thanthosewho

comparisonshop

online

Employment

Education

News

Healthcare

Consumer

welfare

Marketdata Implication

for

non

adopters

Equity Argument Ignores


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EquityArgumentIgnores

Historyand

Economics

Equality

argument

not

true

for

any

other

infrastructure

Baselinepower,transportation,water

capabilitiesprovided

to

rural;

not

equal

capabilities

Broadbandisdifferentfromvoice,asthereisa

rangeofqualities


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BadSeed5

BadIdea GoodIdea

Its

about

the

residential

market

Its

about

leading

in

strategicmarkets

Question:

Whatwouldimprovesocietymore:

100Meverywhere

or

Gigs

to

strategic

institutionsandbaselinebroadband

everywhere?

U S Last in Ranking in Improvement in


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U.S.LastinRankinginImprovementin

Innovation

Capability

(1999

2009) 21Sweden10.7

22France10.6

23Portugal10.1

24

Malta

9.9

25Belgium9.5

26EU25**9.4

27Poland9.4

28UK9.0

29

EU

15

8.5

30Mexico8.0

31Netherlands7.9

32Australia7.4

33Finland7.3

34Canada

6.3

35Germany6.3

36Italy5.2

37NAFTA*5.1

38Greece5.1

39Brazil

3.7

40U.S.2.7

1China19.5

2Singapore19.0

3Lithuania14.8

4Estonia

18.1

5Denmark17.4

6Luxembourg16.9

7Slovenia`16.7

8Russia15.2

9Cyprus

14.7

10Japan14.4

11Hungary14.3

12Slovakia14.1

13CzechRepublic13.8

14India

13.6

15Latvia13.4

16Austria13.2

17S.Korea13.2

18Ireland12.9

19EU

10**

12.8

20Spain10.8

Some Consequences of Bad Ideas


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SomeConsequencesofBadIdeas

Policyserves

wired

companies,

not

consumer

choice

or

newneeds

Policyserveshistory(wiredvoice),notmarkets

(movingto

wireless

data),

or

the

future

(innovation

ecosystem)

Wefocusonwrongissues(nonstrategicspeed)and

ignore

opportunities

(applications

in

public

data;

rethinkingprocesses)

Weneverreexamineprioritiesandfallbehindcompetitors

Wemake

wasteful

investments;

dont

make

wise

ones

$17,000perlineperyeartohomesthatdontwantfiberconnectionbutwantmobile

Wefundmultiplewirelesscompetitorsinsomeareas,butdonotfundinhigh

costwireless

areas

Stillnonationalinteroperablewirelesspublicsafetynetwork

Ri h Id f P li F k


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RightIdeasforPolicyFramework

Righttoolsandincentivesbroadlydistributed

Democratizationofknowledgeexchange

Rethinkingprocessesinlightofnew

communicationsplatform

should

be

highest

priority,notafterthought

Killerapplicationsdrivenetworkdemand

Governmenthasleversthatdrivekillerapplications

Todays Programmatic Agenda:


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Today sProgrammaticAgenda:

DemocratizationofKnowledgeExchange

Marketwillnotgettoolseverywheresociety

needsthem

Ashasbeentrueofallessentialinfrastructure

2010totalprojectedfederaloutlaystosupportUniversalService


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$2.7 billion in

subsidies to

connect schools

and libraries

$1.2 billion in

discounts for

basic telephone

service for low-

income persons

$214 million in

subsidies for

rural health care

communications

$4.6 billion for

network

deployment to

high-cost areas

Includesmoneyformultiplewirelesscompaniesbutnot

unserved wirelessareas

Mostofthismoneydoesnotgotounserved

areas

Nomoneyfordigital

literacy

CurrentProgramGetsVeryFastNetworkstoSome

b t L Milli U d


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butLeavesMillionsUnserved

Thesmallest

rural

ILECs2 are

upgrading

theirplanttobringbroadbandtorural

consumers...

Percentshareofruralcooptelco linesthat

havebeenupgradedtoofferselectspeeds

ofinternetaccess3

AT&T,Verizon

andQwest5

*

Ownedby

others

Eventhough

most

non

upgraded

accesslinesareownedbythose

threecompanies

PercentoftotalU.S.accesslinesnot

upgradedtoofferbroadband

*

* *

* *

*

*

* *

*

+17pct

pts

*

200kbps

(incremental)

Andreceive

more

high

cost

supportthanAT&T,Verizonand

Qwest...

PercentshareoftotalUSFhighcost

supportforILEClines,20084

Ownedby

others

*

AT&T.Verizon

andQwest5

Inaddition,thefundfacessystemic,structuralproblems


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Drivingahigher

USF

contribution

factor

(Percentage)

*

*

*

*

*

* * ** ** * *

*

*

*

*

*CAGR

*

**1High

cost

fund

has

been

rapidlygrowing

($,billions)

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

Contribution

factorhasmore

thandoubled

since2000

Asdemandforfundinggrows,andtherevenuebasesubjecttoassessmentshrinks,

consumersand

businesses

will

face

higher

contribution

factors

in

the

future

Whileassessable

revenue

base

declines

($,billions)

A d th t b i b k t


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InsertTitlePage

BlairLevinSeptember,2010

(presentationin

beta

and

always

will

be)

Andthatbringsusbackto

Howdo

we

have

asystem

thatservestodayspriorities

andnottheinertiaofhistory?

Top Priority: Unserved Areas


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TopPriority:UnservedAreas

AdditionalTasksForHealthy


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Ecosystem

Parameters for Support: 4 down/1 Up


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ParametersforSupport:4down/1Up

Actual

Download

Speeds

Necessary

to

Run

Concurrent

Applications

(Mbps)

TargetisGreaterthanwhatMostAmericansReceiveToday


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0

5

10

15

20

25%

256K

2

500K

5

768K

8

1M

5

2M

18

3M

15

4M

7

5M

9

6M

7

7M

5

8M

4

9M

4

10M

3

10M

+

9

Utility

Percentof

subscribers

by

ACTUAL

top

speed

received

Emerging

multimediaFullmedia Advanced

~50%ofU.S.consumersreceivelessthan3.0Mbps

TargetWouldPutUSatLeadingEdgeofUniversalization


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Country

Universal

availabilitytarget

(download)

Typeofspeed Date

UnitedStates 4Mbps Actual 2020

Rep.ofKorea 1Mbps(99%) Actual 2008

Finland 1Mbps Actual 2009

Australia 0.5Mbps Unspecified 2010

Denmark .5Mbps Unspecified 2010

Ireland 1Mbps Unspecified 2010

France 0.5Mbps Unspecified 2010

Germany 1Mbps Unspecified 2010

UnitedKingdom 2Mbps Unspecified 2012

Australia 12Mbps Unspecified 2018

Next: Sizing Unserved


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Next:SizingUnserved

Availabilityof4MbpsCapableBroadbandNetworksintheUnitedStates

byCounty7MillionHomesWithoutAccess


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y y

Next: Private Investment Gap Analysis


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Next:PrivateInvestmentGapAnalysis

CashFlowsAssociatedWithBroadbandAvailabilityGap


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Averysmallnumbersofhomesdrivesahuge

t f th t


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percentageofthecosts.

BroadbandAvailabilityGap,bypercentofU.S.housingunitsserved(Billionsofdollars)

TheBroadbandInvestmentGap


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Numberof

U.S.

homes

without

access

to

terrestrial

broadband

and projected

10yearinvestmentgaptoconnectthemtoterrestrialbroadband.

Majorityofgap($13.4billion)iscausedbyfinal250,000homes.

Other Needed Uses


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OtherNeededUses

Next: Potential Source of Funds


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Next:PotentialSourceofFunds

Potential Shift ofFunds


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PotentialShiftofFundsUniversal

Service

Fund

disbursements

that

can

be

retargetedtouniversalbroadband.

Implement

merger

conditions

for

eligible

telecommunicationscarriers(Verizon,Sprint)

PhaseoutInterstateAccessSupport(IAS)subsidy

FreezeInterstate

Common

Line

Support

(ICLS)

PhaseoutremaininglegacyHighCostsupportfor

competitiveeligibletelecommunicationscarriers(ETCs)

$4billion

$4Billion

$1.8Billion

$4.8Billion

$15.6billionTotalsavedover10yearperiod

DistributionPrinciples


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DistributionMethod


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CriticismWelcome


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Thisplanisinbetaandalwayswillbe.

NationalBroadbandPlan

Chapter17

Implementationand

Benchmarks

Tablestakesforcritics:

Mustanswer4

questions

Whatisminimumspeed

eligiblefor

subsidy?

Howmuchwillitcost?

Howwillwepayforit?

And

FourthQuestion


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Q

Bywhatprincipleofeconomicsorjusticedo

wechargeapoorurbanfamilythatcant

afford1.5MDSLservice$5amonthtosubsidize100Mfibertoaruralsecondhome

tothetuneof$17,000ayear?


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Documents

Presentation: Universal Broadband: Targeting Investments to Deliver Broadband Services to All Americans