Obama: Wireless like transcontinental railroad in its importance to the future

President Obama compared the potential impact of high-speed wireless service to the transcontinental railroad during a speech touting his initiative to expand next-generation wireless coverage nationwide at Northern Michigan University on Thursday.

"When it comes to high-speed Internet, the lights are still off in one-third of our households," Obama said in his prepared remarks, noting only 65 percent of American households have broadband access. "For millions of Americans, the railway hasn’t come yet."

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The White House unveiled its plan to expand 4G wireless coverage to 98 percent of Americans on Wednesday, arguing the new infrastructure is crucial to remaining competitive with nations such as South Korea that boast adoption rates over 90 percent.

"For our families and businesses, high-speed wireless service is the next train station; the next off-ramp," Obama said. "It’s how we’ll spark new innovation, new investments and new jobs."

The administration is planning to make a onetime investment of $5 billion into the Federal Communications Commission's Universal Service Fund to support expanding mobile broadband coverage in rural communities. Another $3 billion will be set aside for researching and developing new wireless technologies.

Obama said broadband access has given small firms like Getz's Clothiers, a family-owned business in Marquette, Mich., the ability to compete globally.

"If you can do this in the snowy wilderness of the Upper Peninsula, we can do this all across America," Obama said. "You’ve all heard about outsourcing. Well this is what we call 'insourcing' – where overseas work is done right here in America."

He also suggested the Web may help stem the tide of young people forced to leave rural areas like Michigan's Upper Peninsula for cities on both coasts to find work.

"This isn’t just about a faster Internet or being able to friend someone on Facebook. It’s about connecting every corner of America to the digital age," Obama said.

"It’s about a rural community in Iowa or Alabama where farmers can monitor weather across the state and markets across the globe. It’s about an entrepreneur on Main Street with a great idea she hopes to sell to the big city."

The rural wireless investments would complement the nearly $11 billion set aside for the creation of a national, interoperable public safety communications network.

The plan would be funded by spectrum auctions, from which the administration expects to net roughly $28 billion after broadcasters are compensated for voluntarily relinquishing airwaves. The White House said the remaining $10 billion would be used to reduce the federal deficit.

House Energy and Commerce chairman Fred Upton (R-Mich.) reacted to the president's announcement by suggesting additional subsidies for broadband expansion could be wasteful in the current fiscal climate.

Upton was joined in his concern by Rep. Greg Walden (R-Ore.), who noted the panel's telecom subcommittee held a hearing Thursday examining the use of the $7 billion in stimulus funds for broadband expansion.

“I laud the goal but believe we must be cost-efficient about how we go about it and be realistic in our expectations of what taxpayers can afford,” Walden said.

“In pursuit of the goal of increasing the deployment of wireless broadband to the unserved areas of rural America, it will be important to remember the colloquial definition of ‘insanity’: repeating the same actions and expecting different results.”

At least one analyst has suggested the White House's plan may prove beneficial for makers of wireless infrastructure and handsets. Rural telecom firms may also stand to benefit.

Advocacy groups including Media Access Project, Public Knowledge and Connect Public Safety Now, praised the new initiative. The wireless industry, including AT&T, also welcomed the announcement.