MSFT Microsoft Corporation

By Jay Greene 

Microsoft Corp. plans to put its lobbying and financial muscle behind a long-shot technology that taps unused television bandwidth to bring broadband access to underserved areas of America.

In a speech Tuesday in Washington, Microsoft president and chief legal officer Brad Smith is expected to announce support for so-called TV white-space technology, which the company says is a frugal way to address the digital divide between U.S. cities and rural areas.

He also plans to encourage the Trump administration and Congress to ensure white-space spectrum is available on an unlicensed basis in every market in the country, and to consider the technology as they develop a new national infrastructure proposal.

The Federal Communications Commission estimates more than 23 million people in rural areas lack "fast" internet access, defined as having minimum download speed of 25 megabits a second. Cities commonly have service speeds that top 100 MB a second.

Microsoft, which has advocated white-space technology for years, said it will form partnerships with rural telecommunications companies to invest in at least 12 projects in 12 states over the next year, hoping to bring broadband connectivity to two million people in rural America by July 4, 2022.

The company declined to say how much it will spend on the effort. Mr. Smith in an interview referred to the spending as a "civic investment," but acknowledged bringing high-speed connectivity to rural areas will likely bring new customers to the software giant as well.

"It's going to be good for everybody in technology, including Microsoft, " Mr. Smith said.

The technology Microsoft is championing harnesses unused bandwidth between TV channels to wirelessly deliver access. To use that spectrum, telecoms set up base-station radios, which can send and receive signals up to 10 miles in rural areas. Those radios transmit to antennas attached to homes, which connect to Wi-Fi routers inside.

The promise is that TV white space could provide access to the distant reaches of the country at a fraction of the cost of other options. Microsoft estimates it would cost $10 billion to $15 billion to connect rural America with broadband access using TV white spaces, compared with $15 billion to $25 billion using fixed wireless technology, and $45 billion to $65 billion running fiber-optic cable to homes.

The broadcast industry doesn't share Microsoft's support. In a letter to the FCC on Monday, National Association of Broadcasters associate general counsel Patrick McFadden said there are only 800 white-space devices registered in the U.S. -- many just test devices.

"Microsoft has been making promises about white spaces technology for well over a decade," he wrote. "Yet there remain few tangible consumer benefits associated with white spaces deployments across the U.S."

The trade group is concerned that the spectrum Microsoft hopes telecom partners will use for white-space services could interfere with broadcast TV channels. Moreover, broadcasters have complained they don't have enough spectrum of their own.

In response to the broadcast group's criticism, Microsoft noted "most new telecommunication technologies have taken over a decade" from the regulatory authorization to commercial adoption. "TV White Spaces have been no exception," a company spokesman said.

While the technology hasn't taken off in the U.S., Microsoft has financially backed white-space efforts to bring internet access to 185,000 people in 20 projects globally, including rollouts in developing countries such as Kenya, Colombia and the Philippines.

Microsoft is betting it can catalyze the market in the U.S. now, in part, because the technology is improved and a business model has been established abroad. It plans to help rural telecoms cover capital expenses and take a share of revenue generated to recoup its costs.

Microsoft already has doled out $250,000 to Mid-Atlantic Broadband Communities Corp., said Tad Deriso, chief executive of the southern Virginia telecom. With another $500,000 from the Virginia Tobacco Region Revitalization Commission and $250,000 of its own money, Mid-Atlantic Broadband plans to bring white-space service to 1,000 customers by year-end.

The service, which residents acquire through local schools, provides free internet access to a limited number of education-related sites at speeds of about 3 to 4 MB a second. Customers can access the entire web at the same speed for $10 a month, or pay $40 a month for service that hits 8 to 10 MB a second, though that falls below the FCC's definition of "fast."

About 90% of homes have opted for the free service, Mr. Deriso said.

The money from Microsoft and others is crucial because the cost of deploying the technology is about $1,000 a home, Mr. Deriso said. "Eventually, we'd like to see it be $100," he said.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

July 11, 2017 00:15 ET (04:15 GMT)

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