STATEMENT OF
JONATHAN S. ADELSTEIN
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
BEFORE THE
SUBCOMMITTEE ON RURAL AND URBAN ENTREPRENEURSHIP
SMALL BUSINESS COMMITTEE 
UNITED STATES HOUSE OF REPRESENTATIVES
MAY 9, 2007
Mr. Chairman, Congressman Fortenberry, and members of the Subcommittee, thank you 
for inviting me to testify about one of the seminal challenges confronting our Commission and 
the country: ensuring the ubiquitous deployment of affordable, high speed broadband 
infrastructure to every corner of this country.  
We need to maximize the potential of every citizen to contribute to our social, cultural 
and economic life through communications, whether they live in major cities or in rural, insular 
or other high-cost areas, whether they are Native Americans living on tribal lands or residents of 
economically challenged sections of our inner cities, whether they live with disabilities, whether 
or not they speak English, and regardless of their income level.  I would like to talk to you today 
about why I believe this is such an important guiding principle for communications policy and a 
few of the ways we at the FCC and you in Congress can and must work to achieve this ambitious 
goal. We need to make broadband the dial-tone of the 21st Century.  
I am particularly honored to be here because -- as a fourth generation South Dakotan and 
the first FCC Commissioner from my state, and even from the entire upper Midwest -- I am 
naturally interested in the important role of broadband as a tool for promoting economic 
development in Rural America.  Early in the last century, my grandfather became an engineer 
and founded a company that built roads throughout our state.  The motto of our family company 
was Builders of Better Bridges and Highways.  I keep that spirit in mind in my work at the 
FCC.  Just as roads and bridges provide physical links between our communities, our 
communications networks now bring people together in ways that my grandfather never could 
have imagined, but that, Im sure, would have made him smile in wonder.
In some areas of the country, our communications tools have already surpassed the reach 
of the physical infrastructure to overcome the limits once immovably fixed by distance.  I have 
visited the Bush region in Alaska, above the Artic Circle, where satellite technology, funded 
through universal service support, connects even some of the most isolated villages to the health 
and educational facilities of hub cities, even though no roads connect these towns.  As we 
upgrade our nations communications networks to provide broadband functionality and advanced 
communications services everywhere, our children will integrate these tools into their lives in 
ways that we are only beginning to see.  
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The Role of Broadband for Rural America
By expanding the reach of advanced communications technologies, we can bring new 
hope to many communities where it is in short or diminishing supply.  We are only scratching 
the surface of the opportunities that these technologies can bring.  We stand at the threshold of a 
revolution in the applications that will ride over this infrastructure.  These opportunities hold 
enormous potential for consumers and workers in small towns and Rural America.  
Broadband can connect entrepreneurs to millions of new distant potential customers, 
facilitate telecommuting and increase productivity.  These new connections can create new jobs 
by allowing businesses to set up remote locations and call centers.  Since I have joined the 
Commission, I have traveled across the country and seen broadband technologies harnessed in 
rural areas in ways folks back inside the Beltway might never have imagined.  
For example, at auction houses across the Midwest, entrepreneurs are using broadband 
technologies to conduct real time cattle auctions over the Internet.  Ranchers from across the 
country can log in, watch real time video of the livestock and make purchases without leaving 
their ranches.  By putting their livestock up for bid in cyberspace, these auction houses have been 
able to bridge remote locations, expand their potential markets, and cut the costs of reaching 
their customers.
Broadband can also unlock transformational opportunities through distance learning and 
specialty classes that might otherwise be confined within the physical walls of a traditional 
school.  Similarly, telemedicine applications are giving Rural Americans access to diagnostic 
services, like mobile mammography and emergency services that had been unavailable because 
of distance, cost, weather, or geography.  As we have seen through events like the devastation of 
Hurricane Katrina, our communications services become even more critical in times of disaster 
or national emergency, whether as a means of conveying critical information to the public, 
enabling citizens to communicate with their loved ones, or providing an essential tool for our 
first responders.  Broadband networks are essential to any plan to make emergency networks 
robust and redundant enough to survive and function in the face of such disasters in the future.
Broadband technologies have the potential to improve the quality of life in even some of 
most remote and economically challenged communities.  On Native American lands, I have seen 
tribally-owned providers using broadband infrastructure to bring jobs to their communities that 
serve not only as important sources of employment, but also as training grounds for the young 
people of the tribes. In almost every small community I visit, I hear how hard it is to develop a 
workforce with sufficient training in technology.  Yet without such workers, it is hard for a small 
town to develop and oversee cutting edge communications systems.  We want people to be able 
to stay, work, and thrive in the communities where they grew up, yet I often hear that it is harder 
to keep young people in rural areas these days because they feel a palpable lack of local 
opportunities.  Broadband communications can benefit Rural America in many ways, perhaps 
most of all by restoring the sense of opportunity that first made Americans venture forth and 
settle the more remote areas of this country.  
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As consumers are increasingly empowered to use broadband in newer, more creative 
ways, the stage on which we all must compete is also evolving into a global one.  New 
telecommunications networks are a key driver of this new global landscape.  They let people do 
jobs from anywhere in the world -- whether an office in downtown Manhattan, a home on the 
Cheyenne River Indian Reservation, or a call center in Bangalore, India.  This trend should be a 
wake-up call for Americans to demand the highest quality communications systems across our 
nation, so that we can harness the full potential, productivity and efficiency of our own country.  
We must give all our towns the tools they need to compete in this new marketplace.  If we fail in 
this, be assured, our competitors around the world will take full advantage of our failure.
Rural America and Global Competitiveness
Keeping our communities connected and ensuring that the latest technologies reach all 
Americans, including those in remote and underserved areas, are principles that are enshrined in 
the Communications Act.  Meeting these goals will be more important than ever as we enter a 
new age of global competitiveness.  
Weve made progress, and there are many positive lessons to draw on, but I am 
increasingly concerned that we have failed to keep pace with our global competitors over the 
past few years.  Each year, we slip further down the regular rankings of broadband penetration.  
For small businesses, those in rural areas, and low income consumers, the problem can be even 
more acute.  According to one recent report, seventy-six percent of small businesses in rural 
areas report no access to terrestrial broadband services.  Even more troubling, there is growing 
evidence that citizens of other countries are getting a much greater broadband value in the form 
of more available megabits for less money.  According to the ITU, the digital opportunity 
afforded to U.S. citizens is not even near the top: in fact, it is 21st in the world!  This is more 
than a public relations problem.  It is a major productivity problem, and our citizens deserve 
better.  Indeed, if we do not do better for everyone in America on this score, then we will all 
suffer economic injury as a result.  In this broadband world, more than ever, we are truly all in 
this together.
Some have argued that the reason we have fallen so far in the international broadband 
rankings is that we are a more rural country than many of those ahead of us.  If that is the case, 
and since geography is destiny and we cannot change ours, rather than merely curse the difficulty 
of addressing rural communications challenges, we should redouble our efforts and get down to 
the business of addressing and overcoming them.  
I am concerned that the lack of a comprehensive broadband communications deployment 
plan is one of the reasons that the U.S. is increasingly falling further behind our global 
competitors.  Virtually every other developed country has implemented a national broadband 
strategy.  This must become a greater national priority for America than it is now.  We need a 
strategy to prevent outsourcing of jobs overseas by promoting the ability of U.S. companies to 
in-source within our own borders.  Rural America and underserved urban areas have surplus 
labor forces waiting to be tapped.  No one will work harder, or work more efficiently, than 
Americans, but many are currently without opportunities simply because the current 
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communications infrastructure is inadequate to connect them with a good job.  That situation 
must improve.
A National Broadband Strategy for All Americans
We must engage in a concerted and coordinated effort to restore our place as the world 
leader in telecommunications by making available to all our citizens affordable, true broadband, 
capable of carrying voice, data and video signals. An issue of this importance to our future 
warrants a comprehensive national broadband strategy that targets the needs of all Americans, 
including those in Rural America.  A true broadband strategy should incorporate benchmarks, 
deployment timetables, and measurable thresholds to gauge our progress.  
We need to set ambitious goals and shoot for real high-bandwidth broadband 
deployment.  We should start by updating our current anemic definition of high-speed of just 200 
kbps in one direction to something more akin to what consumers receive in countries with which 
we compete, speeds that are magnitudes higher than our current definitions.  
We must take a hard look at our successes and failures.  We need much more reliable, 
more specific data than the FCC currently compiles so that we can better ascertain our current 
problems and develop responsive solutions.  Giving consumers reliable information by requiring 
public reporting of actual broadband speeds by providers would spur better service and enable 
the free market to function more effectively.
We must redouble our efforts to encourage broadband development by increasing 
incentives for investment, because we will rely on the private sector as the primary driver of 
growth.  These efforts must take place across technologies, so that we not only build on the 
traditional telephone and cable platforms, but also create opportunities for deployment of fiber-
to-the-home, fixed and mobile wireless, broadband over power line, and satellite technologies.  
We must work to promote meaningful competition, as competition is the most effective driver of 
innovation, as well as lower prices.  Only rational competition policies can ensure that the U.S. 
broadband market does not devolve into a stagnant duopoly, which is a serious concern given 
that cable and DSL providers now control approximately 95 percent of the residential broadband 
market.  
There also is more Congress can do, outside of the purview of the FCC, such as providing 
adequate funding for Rural Utilities Service broadband loans and grants; ensuring RUS properly 
targets those funds; providing tax incentives for companies that invest in broadband to 
underserved areas; devising better depreciation rules for capital investments in targeted 
telecommunications services; investing in basic science research and development to spur further 
innovation in telecommunications technology; and improving math and science education so that 
we have the human resources to fuel continued growth, innovation and usage of advanced 
telecommunications services.
Two other critical steps toward a national strategy, elaborated upon below, are properly 
channeling universal service and promoting spectrum-based services for Rural America.
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Universal Service: Evolving for the Broadband Age
Congress and the Commission recognized early on that the economic, social, and public 
health benefits of the telecommunications network increase exponentially for all subscribers with 
the addition of each new subscriber.  Federal universal service continues to play a vital role in 
meeting our commitment to connectivity, helping to maintain high levels of telephone 
penetration and increasing access for our nations schools and libraries.  With almost a decade 
behind us since the 1996 Act, the FCC is re-examining almost every aspect of our federal 
universal service policies, from the way that we conduct contributions and distributions, to our 
administration and oversight of the fund.  As this review has gone forward, I have worked hard 
to preserve and advance the universal service programs as Congress intended.  
Yet, broadband take rates remain comparatively low in Rural America.  Among 
households connected to the Internet, roughly 44 percent of urban households make use of 
broadband access.  In contrast, only 25 percent of rural households with connections to the 
Internet use broadband.  This disparity  confirmed as well by GAO in a 2006 report on 
broadband -- is perhaps not surprising given that rural residents tend to be less likely to use the 
Internet, regardless of the technology.  The Pew Foundation has suggested that this may be due 
in part to presence of older and less wealthy populations in Rural America.  If this is true, we 
may expect the same factors to affect the roll-out of broadband in rural areas.  But, even if slow 
broadband uptake truly is only a symptom of them today, we must not allow the lack of 
broadband access to become an affirmative cause of the graying and relative impoverishment 
of Rural America in the future.
Ensuring the vitality of universal service will be particularly important as technology 
continues to evolve.  Increasingly, voice, video, and data will flow to homes and businesses over 
broadband platforms.  In this new world, as voice becomes just one application over broadband 
networks, weve got to have ubiquitous broadband pipes to carry the most valuable IP services 
everywhere.  Without such broadband networks, IP services cant reach their full audience or 
capability.  The economic, public health, and social externalities associated with access to 
broadband networks will be far more important than the significant effects associated with the 
plain-old-telephone-service network, because broadband services will touch so many different 
aspects of our lives.  So, it is important that the Commission conduct its stewardship of universal 
service with the highest of standards and that we ensure that universal service evolves to promote 
advanced services, which is a priority that Congress has made explicitly clear.
Wireless: A Critical Source of Broadband Services
One of the best opportunities for promoting broadband, particularly in rural areas, and 
providing competition across the country, is in maximizing the potential of spectrum-based 
services.  The Commission must do more to stay on top of the latest developments in spectrum 
technology and policy, working with both licensed and unlicensed spectrum.  Spectrum is the 
lifeblood for much of this new communications landscape.  The past several years have seen an 
explosion of new opportunities for consumers, like Wi-Fi, satellite-based technologies, and more 
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advanced mobile services.  We now have to be more creative with what I have described as 
spectrum facilitation.  That means looking at all types of approaches  technical, economic or 
regulatory  to get spectrum into the hands of operators ready to serve consumers at the most 
local levels possible.  
Of course, licensed spectrum has and will continue to be the backbone for much of our 
wireless communications network.  We are already seeing broadband provided over satellite, 
new wireless broadband systems in the 2.5 GHz band and the increasing deployment of higher 
speed mobile wireless connections from existing cellular and PCS providers.
During our review of the bandplan in advance of the auction last year of 90 MHz of new 
spectrum for the Advanced Wireless Service, I pressed for the inclusion of smaller blocks of 
licenses.  I thought that smaller license blocks would improve access to spectrum by those 
providers who want to offer service to smaller areas, while also providing a better opportunity 
for larger carriers to more strategically expand their spectrum footprints.  Our decision to adopt 
smaller license blocks was well received by a number of carriers and manufacturers.
The Commission has a historic opportunity in the upcoming 700 MHz auction to 
facilitate the emergence of a third broadband platform that will ensure consumers everywhere 
the benefits of a high-quality wireless broadband network.  As we finalize our rules for the 700 
MHz auction, the biggest and most important auction we will see for many years to come, it is 
critical we build on the lessons learned from our previous auctions to provide a diverse group of 
licenses so that all bidders have an opportunity to obtain licenses that best match their business 
plan.  While I have supported rules to facilitate the secondary market for spectrum rights and 
licenses, I think we are best served by providing a wide variety of license sizes at the initial 
auction when appropriate.
I have also worked closely with the Wireless Internet Service Provider (WISP) 
community, which has been particularly focused on providing wireless broadband connectivity 
in rural and underserved areas.  I even had the opportunity to host an extraordinary FCC event in 
my home town of Rapid City a few years ago to highlight the potential of rural WISPs.  
Unlicensed broadband services can be a big part of the rural solution.  Unlicensed spectrum is 
free and, in most rural areas, lightly used.  It can be accessed immediately, and the equipment is 
relatively cheap because it is so widely available.  
We can do even more for rural WISPs and other unlicensed users.  I have heard from 
operators who want access to additional spectrum and at higher power levels.  And the 
Commission has been doing just that.  We have opened up 255 megahertz of spectrum in the 5 
GHz band  more spectrum for the latest Wi-Fi technologies  and are looking at ways to 
increase unlicensed power levels in rural areas.
I also have pushed for flexible licensing approaches that make it easier for community-
based providers to get access to wireless broadband opportunities.  We adopted rules to make 
spectrum in the 3650 MHz band available for wireless broadband services.  To promote interest 
in the band, we adopted an innovative, hybrid approach for spectrum access.  It makes the 
spectrum available on a licensed, but non-exclusive, basis.  I have spoken with representatives of 
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the Community Wireless Network movement, and they are thrilled with this decision and the 
positive impact it will have on their efforts to deploy broadband networks in underserved 
communities around the country.
We have also made spectrum available in the 70/80/90 GHz band for enterprise use.  
While you may not be familiar with this spectrum block, it can be used to connect buildings with 
gigabit-speed wireless point-to-point links for a mile or more.  Instead of digging up streets to 
bring fiber to buildings, licensees can set up a wireless link for a fraction of the cost -- and the 
spectrum is available to anyone holding a license.  While others supported an auction, I 
successfully argued against them in this unique case, because I was concerned that auctions 
would raise the price of access and shut out smaller licensees.  In fact, one company now is 
installing five links for the city of Sioux Falls. The links will be used for a number of City 
services, including public works, police and fire departments, as an alternative to fiber.
We are now even looking to allow unlicensed operations in unused television spectrum 
bands  the so-called white spaces.  It is a challenging proposal, but one that could allow for 
unlicensed use of spectrum that has exceptional propagation qualities, which can be particularly 
useful in rural areas.  We have an obligation to look at the interference implications of such a 
proposal, and it will be a major proceeding at the Commission this upcoming year.
Conclusion
Congress has charged the Commission with ensuring that the American public stay well-
connected and well-protected, directing us in the very first section of the Communications Act 
with making available to all the people of the United States rapid, efficient Nation-wide 
communications services.  That starts with a continuing commitment to connectivity, and 
nowhere is this more important than in Rural America.  
If the horse and wagon were the key tools that allowed my ancestors to settle the west, 
broadband networks will be a big part of maintaining and restoring the vitality of our rural 
communities in the future.  Let us face this new frontier of silicon and fiber as bravely and 
resourcefully as they did the original frontier of forbidding forests and vast prairies.  If we do, I 
know we will experience similar success and the proper place in the history of American 
progress.  For the sake of ourselves, our children, and this great country, may we be as bold and 
successful in our own pioneering endeavor as they were in theirs.  Thank you for your leadership 
on rural broadband and for the opportunity to testify before you today.