Obama to lay out plan for wireless Internet expansion

President Barack Obama will outline his plan on Thursday for expanding high speed wireless Internet service to 98 percent of Americans while reducing the U.S. deficit by $9.6 billion over the next 10 years.

During a trip to Marquette, Michigan -- a politically important state that has been especially hard hit by the rough U.S. economy -- the president will propose investing $5 billion into a fund that will ensure fast wireless technology is made available to rural areas across the country.

He will also call for $10.7 billion to be invested in developing a wireless network to support public safety agencies, a proposal that will be in his fiscal 2012 budget, due to be released on Monday.

During his State of the Union address Obama, a Democrat, called for expanding high-speed wireless services to satisfy a voracious appetite of consumers and businesses for the technology.

His administration has endorsed making 500 megahertz of wireless airwaves, or spectrum, available over the next decade to meet the growing demand for broadband services, including the widely popular Apple iPad and proliferation of smartphones.

The Federal Communications Commission hopes to repurpose 120 megahertz of spectrum through incentive auctions where television broadcasters would voluntarily give up spectrum in exchange for a portion of the auction proceeds.

The White House said it expects those auctions and more efficient use of government spectrum to raise $27.8 billion over the next decade. That figure is an estimate, however, and could end up lower or higher depending on the success of the auctioning process.

Congress must pass legislation to give the FCC the authority to conduct the incentive auctions. There could be resistance from lawmakers if they fear the auctions could apply undue pressure to broadcasters in their districts to give up spectrum.

In addition to the fund to help rural areas, Obama will propose to put $3 billion from those proceeds toward research and development of emerging wireless technologies and applications, the White House said in a statement ahead of the president's trip.

Another $9.6 billion from the proceeds would be applied to curbing the deficit, a key goal of Obama's next two years in office and a top demand from Republicans, who control the House of Representatives and will likely make deficit reduction a high profile topic in the 2012 presidential campaign.

Obama's fiscal 2012 budget will focus on deficit curbs while investing in areas such as Internet broadband that the president believes are crucial for boosting U.S. competitiveness.

The White House painted the proposal as win win win that will achieve both investment and deficit reduction goals.

We can reduce our deficit, we can expand our wireless access, we can expand our public safety, White House economic adviser Jason Furman told reporters.

You're taking some spectrum from some uses, putting it to better uses, making investments so that you're using that spectrum, and it all fits together.

(Additional reporting by Jasmin Melvin)