CircleID

In general I think this was another good political speech from the President. However, as we have seen in the past, skilled rhetoric doesn't necessarily give rise to action. If Congress reflects the mood of the American people then the nation is not yet ready to change — or, as the President said, to embark on a new 'Sputnik' vision.

The fact that the word 'Internet' was used several times (in absolutely the right context — and often teamed with 'innovation') clearly shows that the President understands the importance of the digital infrastructure. This has not changed since his original campaign in 2008.

Immediately after his inauguration in January 2009 the mood in the White House was very upbeat and it was in that environment that, together with a team of specialised experts, I was able to write reports on digital innovation, the trans-sector use of broadband infrastructure and open networks. All of these reports were very well-received by the White House.

However upon presentation to Congress these initiatives were stalled and the status quo, where the vested telecoms interest prevails and rules the world, was maintained. Time and time again this process has repeated itself — not just in the telco world but in many other sectors as well. The vested interest lobby is extremely powerful in the USA.

To return to telecoms, a pragmatic Obama, advised by the FCC, now believes that this new digital economy can also be arrived at through wireless infrastructure initiatives (perhaps easier to implement as the FCC has control over spectrum), and they seem to have accepted that the battle for a national fixed broadband network has been lost.

For two reasons I believe this is a wrong decision.

First, it could push the USA further behind in the 'Sputnik' race, since others are building their future on fibre. It is true that eventually the US will figure it out correctly, but, unlike what happened in President Kennedy's Sputnik affair (where America did take the lead), in this case it will not be able to surpass the international competition and assume leadership.

The other reason is that without structural reform the wireless industry will also not deliver important ingredients such as open networks, competition and innovation. In a debt-riddled environment the temptation will be to sell spectrum to the highest bidders, most likely the incumbents, and they don't like reform and will not be able to deliver on President Obama's Sputnik vision.

By Paul Budde, Managing Director of Paul Budde Communication. Paul is also a contributor of the Paul Budde Communication blog located here.

Related topics: Broadband, Telecom