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The Global “Last Mile” Solution: High-Altitude Broadband Infrastructure

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The Global “Last Mile” Solution: High-Altitude Broadband Infrastructure GEORGETOWN LAW TECHNOLOGY REVIEW THE GLOBAL “LAST MILE” SOLUTION: HIGH-ALTITUDE BROADBAND INFRASTRUCTURE Snezhana Stadnik Tapia* CITE AS: 4 GEO. L. TECH. REV. 47 (2019) TABLE OF CONTENTS INTRODUCTION ........................................................................................ 48 HISTORICAL SOLUTIONS TO THE LAST MILE PROBLEM ............................ 52 Addressing the Market Efficiency Gap: Liberalization in Fixed Wireline Services .................................................................................... 54 Addressing the Access Gap: National Universal Service Mechanisms ............................................................................................ 58 Universal Service: History, Priorities, and Modes of Expansion .......................................................................................... 59 Universal Service Financing Mechanisms .................................. 64 Failure of Universal Service Funds ............................................ 67 MOVING BEYOND LIBERALIZATION AND UNIVERSAL SERVICE FUNDS: INNOVATIVE GLOBAL BROADBAND INFRASTRUCTURE PROJECTS ................. 70 High-Altitude Internet Infrastructure Projects and Applicable Regulatory Frameworks .......................................................................... 73 Airspace Connectivity: Internet-beaming Balloons and Drones ............................................................................................... 73 a. Loon’s Connectivity Project and the Regulatory Framework .................................................................................. 76 Outer Space Connectivity: The Global Broadband Space Race ................................................................................................... 81 * Associate at Sidley Austin LLP, focusing on international arbitration and privacy and cybersecurity matters; J.D., New York University School of Law, 2018. I would like to thank Professor Benedict Kingsbury and Thomas Streinz for their help in developing this paper, as well as participants in the Spring 2017 "International Law of Google" colloquium for their valuable insights and feedback. Additionally, thank you to my husband, Josue Tapia, for his encouragement and unwavering support during the writing process. 48 GEORGETOWN LAW TECHNOLOGY REVIEW Vol. 4.1 a. Connectivity via Mega-Constellations and the Regulatory Framework .................................................................................. 84 Disruptive Potential of the Innovations: Changing the Economics of Broadband Access? ............................................................................. 90 Leapfrogging Stages of Development? ............................................. 96 EVALUATING THE POTENTIAL IMPACT OF BROADBAND INFRASTRUCTURE USING THE CAPABILITY APPROACH ................................ 101 Exploring the Relationship Between Infrastructure and Socioeconomic Development ............................................................... 103 Applying the Capability Approach to Broadband Infrastructure Projects .................................................................................................. 108 Key Concepts ............................................................................ 109 From Mere Availability to Genuine Access .............................. 111 How ICTs Impact Capabilities ................................................. 116 Community-led Development under the Capability Approach . 118 CONCLUSION .......................................................................................... 122 INTRODUCTION High-speed Internet access, otherwise known as broadband,1 is considered essential for partaking in the 21st-century economy; the Internet today is considered as important as road and energy infrastructure in terms of its potential to enhance socioeconomic development.2 Broadband, a subset of telecommunications infrastructure that includes wire-based and wireless communications networks, is currently a priority in most countries aiming to bridge the “digital divide,”3 or the phenomenon of being excluded from the information society, usually for lack of availability and affordability.4 Well- documented in both developed and developing countries, the digital divide is undeniably global, even after factoring in the increased rates of access in developing countries to less costly wireless-based mobile broadband services, 1 What constitutes high-speed is usually determined by individual countries and the International Telecommunication Union. In the United States, the Federal Communications Commission broadly defines broadband as high-speed Internet access that is constantly on and faster than traditional dial-up. See BERND HOLZNAGEL ET AL., STRATEGIES FOR RURAL BROADBAND AN ECONOMIC AND LEGAL FEASIBILITY ANALYSIS 15 (2010); Types of Broadband Connections, FCC (June 23, 2014), https://www.fcc.gov/general/types- broadband-connections [https://perma.cc/3BW7-U3F5]. 2 See HOLZNAGEL ET AL., supra note 1, at 7. 3 See Dwayne Winseck, The Geopolitical Economy of the Global Internet Infrastructure, 7 J. INFO. POL’Y 228, 256–57 (2017). The number of national broadband plans has increased from 38 in 2008 to 151 in 2016. See id. 4 See HOLZNAGEL ET AL., supra note 1, at 17 (noting that the term was initially used to describe the gap “between information ‘haves’ and ‘have-nots’”). 2019 GEORGETOWN LAW TECHNOLOGY REVIEW 49 as opposed to fixed wireline services, such as DSL or fiber.5 In 2016, the proportion of the population covered by a mobile broadband network reached eighty-four percent globally and sixty-seven percent in rural areas; LTE or faster networks covered about one half of the global population.6 Unsurprisingly, broadband is an important item on the global agenda. The United Nation’s (UN) Sustainable Development Goals (SDGs) acknowledge the importance of universal access to broadband, encouraging public and private actors alike to bridge the global digital divide by tackling Information and Communications Technology (ICT) infrastructure underdevelopment.7 Historically, the lack of universal access to telecommunications services was addressed nationally—via legislation that enacted pro- competitive policies in the telecommunications sector and universal service mechanisms administered by national communications agencies to spur infrastructure development in high-cost areas. These public interventions were considered warranted to address the “last mile problem,” an expensive investment for telecommunications providers also referred to as the “local loop.”8 The local loop entails connecting every home to a network provider’s local office and in turn, the backhaul network, which is “large-scale wireline infrastructure” that “permits interconnection between the carrier’s network 5 See Andrew Perrin, Digital Gap Between Rural and Nonrural America Persists, PEW RESEARCH CENTER (May 31, 2019), http://www.pewresearch.org/fact- tank/2017/05/19/digital-gap-between-rural-and-nonrural-america-persists/ [https://perma.cc/AM36-SNUW]. One study notes at least a ten percent gap when comparing fixed broadband connections between rural and urban American households. Id. In the Least Developed Countries (LDCs), currently comprising 47 countries, an entry-level fixed- broadband subscription is about 2.6 times more expensive than an entry-level mobile- broadband subscription. See INT’L TELECOMM. UNION, ICT FACTS AND FIGURES 5 (July 2017), http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2017.pdf [https://perma.cc/MGE8-B9LS]; Least Developed Countries (LDCs), UNITED NATIONS, https://www.un.org/development/desa/dpad/least-developed-country-category.html [https://perma.cc/XR2G-WAHC]. 6 INT’L TELECOMM. UNION, MEASURING THE INFORMATION SOCIETY REPORT 77 (2016), http://www.itu.int/en/ITU-D/Statistics/Documents/publications/misr2016/MISR2016-w4.pdf [https://perma.cc/XAY8-GJQK]. 7 See generally, About the Sustainable Development Goals, UNITED NATIONS, https://www.un.org/sustainabledevelopment/sustainable-development-goals/ [https://perma.cc/F8TC-ZL6M]. In 2015, the UN General Assembly adopted 17 SDGs as an integral part of the 2030 Agenda for Sustainable Development, and two of the SDGs relate to bridging the global digital divide. Id. The first applicable SDG is 9, focusing on infrastructure, industrialization, and innovation. The other SDG that aims to bridge the technological divide is 17, emphasizing the strengthening of global partnerships for sustainable development. Id.; see also infra Part IV.A. 8 See Krishna Jayakar, Universal Service, in . AND COMMUNICATIONS FOR ALL: A POLICY AGENDA FOR A NEW ADMINISTRATION 181, 194 (Amit M. Schejter ed., 2009). 50 GEORGETOWN LAW TECHNOLOGY REVIEW Vol. 4.1 and other networks.”9 For a local loop project to be financially viable, the prospective revenues must be greater than the costs, making population density a crucial factor in infrastructure provision.10 Faced with chronic underprovision in rural areas, extending communications networks to the last mile historically required public intervention and continues to do so today. Although pro-competitive policies and universal service mechanisms boosted communications infrastructure deployment worldwide, the broadband access gap persists in many countries. Today, telecommunications providers are especially leery of investing in networks in the developing world where “most governments lack the financial resources on their own to make the diffusion of the Internet a major priority.”11 On a
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