UPDATE 3-US broadband plan aims to boost speed, wireless

Mon Mar 15, 2010 6:29pm EDT

* Equipment makers, mobile services look set to benefit

* FCC seeking power to auction broadcasters' spectrum

* Unwilling broadcasters may be forced to give up spectrum

* House panel to hold March 25 hearing on the plan (Recasts first paragraph with specific speed increase, adds access numbers, further plan details)

By John Poirier

WASHINGTON, March 15 (Reuters) - U.S. regulators released a blueprint for upgrading Internet access for all Americans, with Internet speeds up to 25 times the current average, expanded coverage and more airwaves for mobile services.

The U.S. Federal Communications Commission plan released on Monday comes as the Internet increasingly delivers everything from telephone service to movies, music and banking services.

Nearly 200 million Americans had fast Internet access at home last year, but about 100 million do not, says the FCC document. "Like electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life."

Requested by Congress, the plan of over 350 pages looks set to touch off intense lobbying by communications companies over legislation and FCC rules that will underpin the goals.

A shift in airwaves from broadcasters like CBS Corp (CBS.N) could benefit wireless providers like AT&T (T.N) and Verizon Wireless.

While upgrading the nation's wireless and wireline networks would be a boost for companies like equipment maker Alcatel Lucent SA (ALUA.PA), wireless chip maker Qualcomm (QCOM.O) and fiber optic providers like Corning Inc (GLW.N).

Several elements of the plan had emerged in the past few weeks but the five members of the FCC are due to vote Tuesday on issuing a summary of "Connecting America: The National Broadband Plan."

A House Energy and Commerce Committee panel will hold a March 25 hearing on the FCC's proposals.

EXPANDING COVERAGE

A Connect America Fund would receive up to $15.5 billion over the next decade, using money shifted from the Universal Service Fund that currently supports telephone service for the poor and rural areas.

The plan aims to have 100 million American households get Internet speeds of 100 megabits per second (Mbps) by 2020 -- a speed that would allow a consumer to download a two-hour, high-definition movie in less than 10 minutes.

As an interim goal, the plan calls for 100 million U.S. homes have 50 Mbps Internet speeds by 2015.

The current household average speed is about 4 Mbps. Even homes with cable or fiber Internet access only achieve speeds averaging 5 Mbps to 6 Mbps.

Cisco Systems Inc (CSCO.O) recently announced it would introduce a router that can handle Internet traffic up to 12 times faster than rival products. Google Inc (GOOG.O) has said it plans to build a super-fast Internet network to show that it can be done. The FCC has praised both announcements.

SHIFTING AIRWAVES

The plan stresses the need to devote more airwaves to the anticipated explosion of handheld devices capable of playing movies and music in addition to handling emails and voice calls.

The agency says it is seeking expanded authority from Congress to hold auctions that would provide incentives for broadcasters to give up some of their airwaves for purchase by wireless companies.

The FCC said it would leave open the possibility of taking action if broadcasters do not voluntarily give up spectrum.

Analysts said meeting even the FCC's 50 Mbps interim goal would likely take a lot more investment by companies like AT&T and Qwest Communications International Inc (Q.N).

"Five years from now it would be tough for them to get anything of any size done," said Stifel Nicolaus analyst Christopher King, "they would really need to start today."

Some analysts have also been skeptical about whether the airwaves reallocation would appeal to broadcasters unless the FCC offers them a big percentage of the auction proceeds.

FCC Chairman Julius Genachowski told Reuters on Friday that "a number of broadcasters" were open to his "win-win" plan, which would have them give up airwave licenses for auction in exchange for receiving a share of the proceeds.

Verizon Wireless is a joint venture between Verizon Communications Inc (VZ.N) and Britain's Vodafone Group Plc (VOD.L). (Reporting by John Poirier; Additional reporting by Sinead Carew; Editing by Tim Dobbyn)