Obama lays out plan for wireless Internet expansion

By: Jeff Mason

(Reuters) - 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 ten 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.

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 like CBS Corp 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.

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, which will be released on Monday, will focus on deficit curbs while investing in areas such as Internet broadband that the president, a Democrat, believes are crucial for boosting U.S. competitiveness.

The budget will call for $10.7 billion to be invested in developing a wireless network to support public safety agencies, the White House said.