FCC to propose faster broadband speeds

The Sony VAIO P Series Lifestyle PC screen is shown at the annual Consumer Electronics Show (CES) in Las Vegas, Nevada January 9, 2009.

WASHINGTON (Reuters) - The U.S. Federal Communications Commission unveiled a plan on Tuesday that would require Internet providers to offer minimum home connection speeds by 2020, a proposal that some telecommunications companies panned as unrealistic.

The FCC wants service providers to offer home Internet data transmission speeds of 100 megabits per second (Mbps) to 100 million homes by a decade from now, Commission Chairman Julius Genachowski said.

Industry estimates generally put average U.S. Internet speeds at below 4 Mbps.

The proposal is part of the FCC's National Broadband Plan, due next month. It comes a week after Google Inc rattled Internet service providers with its plan to build a super-fast Internet network.

Some providers derided the FCC's plan.

"A 100 meg is just a dream," Qwest Communications International Inc Chief Executive Edward Mueller told Reuters. "We couldn't afford it."

"First, we don't think the customer wants that. Secondly, if (Google has) invented some technology, we'd love to partner with them," Mueller added.

AT&T, the top broadband provider among U.S. telecommunications carriers, said the FCC should resist calls for "extreme forms of regulation that would cripple, if not destroy, the very investments needed to realize its goal."

Verizon, the third-largest provider, and one that has a more advanced network than many competitors, said it has completed successful trials of 100 Mbps and higher through its fiber-optic FiOS network.

"(One gigabit per second) as discussed in current news reports is a lot of signal; typically enough for many massive business operations," Verizon said in a statement that referred to Google's plan to test a network with those speeds. "But we could make it happen over the FiOS network without much trouble, should a market for it develop."

Verizon said it offers speeds of up to 50 Mbps.

One analyst questioned whether the FCC's proposal could lead to a sustainable business model.

"In order to earn a return for investors, you have to be conscious of what consumers will pay. I don't know this is something consumers will pay for," Piper Jaffray analyst Christopher Larsen said. "It's a nice goal, but it's a little on the over ambitious side."

Genachowski said the FCC plan would set "ambitious but achievable goals" in remarks to the National Association of Regulatory Utility Commissioners conference.

He offered few details on the plan and how the FCC would get providers to reach the minimum speeds. He said the goal is to transform the United States into the world's largest market of very high-speed Internet users.

NEED FOR SPEED

Genachowski said speedier Internet service would help create jobs and economic growth.

"Despite significant private investment and some strong strides over the last decade, America's broadband ecosystem is not nearly as robust as it needs to be," he said.

The United States ranked 19th in broadband speed, trailing Japan, Korea and France, according to a 2008 study by the Organization for Economic Co-operation and Development.

Data shows that about 64 percent of U.S. households used a high-speed Internet service in 2009, the Commerce Department said on Tuesday. That is a 25 percent increase from 51 percent two years earlier.

Companies like network equipment maker Cisco Systems Inc, which makes routers and switches which support Internet traffic, would benefit from greater broadband investment.

"Cisco believes that a next generation Internet will enable economic growth and job creation, as well as improve the delivery of health care, education and energy," Jeff Campbell, Cisco's director of technology and trade policy, said in a statement.

Research in Motion Ltd, which makes the BlackBerry mobile device, said on Tuesday that smartphone manufacturers must start developing fewer bandwidth-guzzling products or risk choking already congested airwaves.

Genachowski lauded Google, the world's top Internet search company, for plans to offer its fast network to up to half a million people, and called on other companies to step up their broadband plans.

Google wants to demonstrate that a carrier could easily manage complex applications that use a lot of bandwidth without sacrificing performance.

"We should stretch beyond 100 megabits," Genachowski said. "The U.S. should lead the world in ultra high-speed testbeds as fast or faster than anywhere in the world."

The FCC also wants to use the universal service fund, a U.S. subsidy program for low-income families to gain access to phone service, to get more people high-speed Internet access.

(Additional reporting by Ritsuko Ando and Sinead Carew in New York, editing by Dave Zimmerman, Robert MacMillan, Tim Dobbyn)