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BROADBAND BRINGING HOME THE BITS Committee on Broadband Last Mile Technology Computer Science and Telecommunications Board Division on Engineering and Physical Sciences National Research Council NATIONAL ACADEMY PRESS Washington, D.C.
NATIONAL ACADEMY PRESS 2101 Constitution Avenue, NW Washington, DC 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. The majority of the support for this project was provided by the Defense Advanced Re- search Projects Agency under contract No. N00174-99-C-0052 and the National Science Foun- dation under grant No. ANI-9908155. Additional support was provided by the Association for Computing Machineryâs Special Interest Group on Data Communication, Hewlett- Packard, Intel Corporation, Interval Research Corporation, WorldCom, Sun Microsystems, Texas Instruments, and Qwest. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the sponsors. International Standard Book Number 0-309-08273-0 Additional copies of this report are available from: National Academy Press 2101 Constitution Ave., N.W. Box 285 Washington, DC 20418 800-624-6242 202-334-3313 (in the Washington metropolitan area) http://www.nap.edu Copyright 2002 by the National Academy of Sciences. All rights reserved. Printed in the United States of America
National Academy of Sciences National Academy of Engineering Institute of Medicine National Research Council The National Academy of Sciences is a private, nonprofit, self-perpetuating soci- ety of distinguished scholars engaged in scientific and engineering research, dedi- cated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its mem- bers, sharing with the National Academy of Sciences the responsibility for advis- ing the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sci- ences in 1916 to associate the broad community of science and technology with the Academyâs purposes of furthering knowledge and advising the federal gov- ernment. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering commu- nities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chairman and vice chairman, respectively, of the National Research Council.
COMMITTEE ON BROADBAND LAST MILE TECHNOLOGY NIKIL JAYANT, Georgia Institute of Technology, Chair JAMES A. CHIDDIX, AOL Time Warner JOHN M. CIOFFI, Stanford University DAVID D. CLARK, Massachusetts Institute of Technology PAUL GREEN, Tellabs (retired) KEVIN KAHN, Intel Corporation RICHARD LOWENBERG, Davis Community Network CLIFFORD LYNCH, Coalition for Networked Information RICHARD METZGER, Lawler, Metzger & Milkman LLC ELIZABETH MYNATT, Georgia Institute of Technology ELI M. NOAM, Columbia University DIPANKAR RAYCHAUDHURI, Rutgers University BOB ROWE, Montana Public Service Commission STEVEN S. WILDMAN, Michigan State University Staff MARJORY S. BLUMENTHAL, Director JON EISENBERG, Senior Program Officer DAVID DRAKE, Project Assistant DAVID PADGHAM, Research Assistant v
COMPUTER SCIENCE AND TELECOMMUNICATIONS BOARD DAVID D. CLARK, Massachusetts Institute of Technology, Chair DAVID BORTH, Motorola Labs JAMES A. CHIDDIX, AOL Time Warner JOHN M. CIOFFI, Stanford University ELAINE COHEN, University of Utah W. BRUCE CROFT, University of Massachusetts at Amherst THOMAS E. DARCIE, AT&T Labs Research JOSEPH FARRELL, University of California at Berkeley JEFFREY M. JAFFE, Bell Laboratories, Lucent Technologies ANNA KARLIN, University of Washington BUTLER W. LAMPSON, Microsoft Corporation EDWARD D. LAZOWSKA, University of Washington DAVID LIDDLE, U.S. Venture Partners TOM M. MITCHELL, WhizBang! Labs, Inc. DONALD NORMAN, Nielsen Norman Group DAVID A. PATTERSON, University of California at Berkeley HENRY (HANK) PERRITT, Chicago-Kent College of Law BURTON SMITH, Cray Inc. TERRY SMITH, University of California at Santa Barbara LEE SPROULL, New York University JEANNETTE M. WING, Carnegie Mellon University MARJORY S. BLUMENTHAL, Director HERBERT S. LIN, Senior Scientist ALAN S. INOUYE, Senior Program Officer JON EISENBERG, Senior Program Officer LYNETTE I. MILLETT, Program Officer CYNTHIA PATTERSON, Program Officer STEVEN WOO, Program Officer JANET BRISCOE, Administrative Officer MARGARET HUYNH, Senior Project Assistant DAVID DRAKE, Senior Project Assistant JANICE SABUDA, Senior Project Assistant JENNIFER BISHOP, Senior Project Assistant DAVID PADGHAM, Research Assistant BRANDYE WILLIAMS, Staff Assistant vi
Preface Since its inception, the Computer Science and Telecommunications Board (CSTB) has examined how the nationâs networked infrastructure has been evolving. At the close of the past decade, the popular appeal of the Internet was evident and growing, and with it the range and richness of the uses to which the Internet might be put. The vision of a popular Internet leads inevitably to thoughts about how people use it in their homesâand then to the arresting observation that most people get the best possible access to the Internet from outside their homes, if they can get it at all. That observation led CSTB to frame an assessment of broad- band technologies in what the telecommunications industry has tradi- tionally called the last mileâthe link to homes (and small offices). This project complements prior CSTB studies of the core of the networkâthe backbone, the architecture, broad categories of applications, and specific categories of networking technologyâin its concern to (literally) bring networking home. The key questions about broadband technology in the last mile are deceptively simple. First, what is feasible, technically and economically? But feasibility is a nuanced quality: it is in the eye of the beholder, and beholders differ considerably in terms of their assumptions and prefer- ences. Those same conditions confound answering the second key ques- tion: how can public policy foster dissemination of broadband in the last mile? Many industries are involved in supplying broadband technology, and their existence and strategies are already shaped by public policy. And many outside those industries, trying to figure out what is going on, vii
viii PREFACE have their own views of what policy is or should be. Moreover, recent industry trends, from mergers to business failures, feed speculation of all kindsâexcept for an expectation that broadband deployment will accel- erate. Thus, to have any claim to completeness, an assessment of broad- band in the last mile must combine consideration of technology, econom- ics, and law and policy. Accordingly, CSTB convened a committee of 14 people with expertise in the following areas: the different kinds of technology that could be used in the last mile; the economics, law, and policy of the telecommuni- cations and networked content industries; and trends in the home and local use of various kinds of networks and their applications.1 The com- mittee combined people with academic, other nonprofit, and commercial experience, and it embraced both supply- and demand-oriented perspec- tives. The committee met five times in plenary session and received exten- sive input through briefings, a workshop, and solicited white papers. In addition, it had two plenary conference calls and made extensive use of e- mail and a private Web site for electronic exchange and deliberation. The committee thanks the many people who helped to make this report possible, although of course the responsibility for the final result is its own. A number of individuals provided valuable information through briefings to committee meetings. Aubrey Bush and Rodger Ziemer of the National Science Foundation (NSF) presented the charge to the commit- tee. Dale Hatfield, then chief of the Federal Communications Commission (FCC) Office of Engineering and Technology, and John Berresford, FCC antitrust attorney, presented the range of telecommunications policy con- cerns from a regulatorâs perspective. Jeffrey Chester, executive director, Center for Media Education; Eugene Kimmelman, co-director, Consum- ers Union; and Mark Cooper, director of research, Consumer Federation of America, discussed concerns emerging from consumer advocates. An- drew Sharpless, then senior vice president of interactive media at Discov- ery Communications, described the perspective of an online content pro- vider; David Kettler, then executive director and vice president of science and technology with Bellsouth, and C. Lincoln (âLinkâ) Hoewing, assis- tant vice president, Internet and Technology, Verizon, presented incum- bent telephone company perspectives; William St. Arnaud, CANARIE, Inc., described the Canadian experience and the larger opportunities in local investment in deploying optical fiber; Milo Medin, chief technology officer and senior vice president of engineering, Excite@Home Network, discussed the cable industryâs approach to Internet service and broad- 1David Butler, who had recently retired from AOL at the time the study started, resigned from the committee for personal reasons in 2000.
PREFACE ix band deployment; Jorge Reina Schement, professor of telecommunica- tions and co-director of the Institute for Information Policy, Pennsylvania State University, provided context for considering universal service is- sues by describing the big picture of communications and information consumption across different population segments; Ted Darcie, director, AT&T Labs Research, analyzed the merits of different broadband tech- nologies and explained AT&Tâs thinking about its choices; Douglas Sicker, FCC Office of Engineering and Technology, discussed perspectives on DSL and HFC technologies; James Hannan, vice president of network technology, Sprint Broadband Wireless, discussed wireless broadband; James Stratigos, vice president and general manager of EchoStar Data Networks, discussed satellite broadband; Kevin Lu, executive director of the Integrated Access and Operations Department, Telcordia, discussed fiber in the last mile; George Abe, venture partner, Palomar Ventures, characterized venture capitalistsâ view of investment opportunities; Tho- mas G. Krattenmaker, senior counsel at Mintz Levin, outlined challenges in thinking about regulatory options; Glenn Woroch, a University of Cali- fornia at Berkeley economist, presented an economic model of asymmet- ric regulation of the broadband race; Andrew Cohill, director of the Vir- ginia Tech Communications Network Services and director of the Blacksburg Electronic Village, outlined concepts for a comprehensive municipal fiber plan; Richard Esposto, director of market activation, West- ern Integrated Networks, discussed conditions and options confronting local government, drawing on his immediately previous work of many years with the Sacramento cable commission; Joseph Van Eaton, principal partner with Miller & Van Eaton, discussed local franchises and licensing; and Richard Civille, Washington director for the Center for Civic Net- working, discussed economic development and aggregating demand for rural telecommunications. Some of these individuals and a number of other people provided white papers to the committee (these are available online at <http://www.cstb.org> and are listed in Appendix C). This project owes its existence to the support of its sponsors, in this instance an unusually large and diverse group, reflecting combined pub- lic and private interest in the topic. The majority of funds came from government or nonprofit sources: the National Science Foundation, the Defense Advanced Research Projects Agency, and the Special Interest Group on Data Communication of the Association for Computing Ma- chinery. Small contributionsâfrom Hewlett-Packard, Intel Corporation, Interval Research Corporation, WorldCom, Sun Microsystems, Texas In- struments, and Qwestâwere developed by members of the Computer Science and Telecommunications Board, who recognized that without those resources the project could not be undertaken. In view of the poli- tics of broadband, it is important to note and emphasize that as is typical
x PREFACE of CSTB projects, the sponsors enabled but did not influence the outcome of the project. From among these, the consistent encouragement of NSFâs Aubrey Bush and members of CSTB are especially noted. CSTB committees are often assembled with experts from very differ- ent backgrounds, and this committee was certainly no exception. It is to the credit of our distinguished members that they constantly derived strength from the diversity in their team and realized an end result char- acterized by a substantial, and in some ways unexpected, degree of con- sensus. My thanks to each and every member of the team for their dili- gence and commitment. On behalf of the team and myself, I extend special thanks to David Clark, who played a major role in launching this study and served as its âvirtual co-chair,â contributing to and inspiring the work of the committee on many occasions. The CSTB staff, by now well known for its standards of broad excellence, performed once again with supreme distinction. Thanks to D.C. Drake for facilitating our work in every way possible and to Marjory Blumenthal for relentlessly challeng- ing the committee to be comprehensive as well as creative, and finally, many thanks to Jon Eisenberg for his role in anchoring the report of the committee and for representing its work with remarkable timeliness and sophistication. Nikil Jayant, Chair Committee on Broadband Last Mile Technology
Acknowledgment of Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with pro- cedures approved by the NRCâs Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integ- rity of the deliberative process. We wish to thank the following individu- als for their review of this report: Robert Broderson, University of California at Berkeley, Eugene Cacciamani, Hughes Network Systems, Vincent Chan, Massachusetts Institute of Technology, Andrew Cohill, Blacksburg Electronic Village and Virginia Polytechnic Institute, David Kettler, H.I.G. Capital, Tom Krattenmaker, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Milo Medin, Excite@Home, Sharon L. Nelson, University of Washington Law School, Andrew Odlyzko, University of Minnesota, Paul W. Shumate, IEEE Lasers and Electro-Optics Society, Marvin Sirbu, Carnegie Mellon University, and David Waterman, Indiana University. xi
xii ACKNOWLEDGMENT OF REVIEWERS Although the reviewers listed above have provided many construc- tive comments and suggestions, they were not asked to endorse the con- clusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Lewis Branscomb, Harvard University (emeritus). Appointed by the National Research Council, he was responsible for making certain that an indepen- dent examination of this report was carried out in accordance with insti- tutional procedures and that all review comments were carefully consid- ered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.
Contents ABSTRACT 1 SUMMARY AND RECOMMENDATIONS 5 1 SETTING THE STAGE 43 The Broadband Challenge, 43 Perspectives on Broadband, 45 A Brief History of the Communications Infrastructure, 47 From Promise to Broad Deployment: What Has Changed Since the Mid-1990s?, 50 Broadband Deployment Trends, 52 Reaching All Americans, 54 Access Economics and Evolving Applications, 57 Scope of This Report, 60 2 WHAT IS BROADBAND? 62 Why Define âBroadbandâ?, 62 Overview of the Technical Characteristics of Broadband, 65 Speed, 65 Latency and Jitter, 67 Symmetry Between Upstream and Downstream Capacity, 67 Always-On, 69 Connectivity Sharing and Home Networks, 71 Addressability, 74 xiii
xiv CONTENTS Controls on Applications and Content, 75 Implications of Network Design/Architecture, 77 Approaches to Defining Broadband, 78 3 BROADBAND APPLICATIONS AND CONTENT 82 Broadband Applications: Promise and Reality, 82 Classes of Broadband Applications, 83 Faster General Internet Access and General Internet Applications, 84 Browsing and Related Activities, 84 Messaging, 85 Fast File Downloading, 85 Games, 87 Speed and Response-Time-Sensitive Internet Applications, 87 Application Rental, 87 Network Storage, 88 Static Image Delivery, 88 Audio, 89 Audio Delivery, 89 Compression-Quality Trade-offs, 91 Specific Audio Applications, 93 Video, 98 The Mechanics of Video Delivery, 102 Telepresence, 103 Telemetry, 105 New Kinds of Publishing, 105 Peer-to-Peer Applications, 105 âLocal Interestâ Content, Including Video, 107 Home Content Hosting, 107 Push Content, 109 Multiplexing Applications Demand in Homes, 109 Internet Appliances, 111 Distributed Work and Education, 112 âTele-webbing,â 113 Communities and Community Networks, 113 Social Factors and Impacts of Broadband, 114 Availability of Content, 114 Broadband Impacts, 116
CONTENTS xv 4 TECHNOLOGY OPTIONS AND ECONOMIC FACTORS 120 Local Access Technologies in Context, 120 Essential Features of the Local Access Technology Options, 121 Wireline Options, 122 Hybrid Fiber Coax, 123 Digital Subscriber Line, 125 Advanced Wireline OfferingsâFiber Optics in the Loop, 129 Powerline, 135 Wireline Roadmap, 136 Wireless Options, 139 Fixed Terrestrial Wireless, 139 Mobile Wireless, 142 Satellite, 144 Wireless Roadmap, 146 The Diverse Technology Landscape, 148 Layering and Unbundling, 149 Economics of Infrastructure Investment, 152 Understanding Costs, 152 Take-Rate Tyranny, 153 Paying for Broadband, 155 Focus on the Consumer, 156 The Pace of Investment, 158 Investment, Risk Taking, and Timelines, 160 Uncertain Investment Prospects in the Private Sector, 161 Investment Options for the Public Sector, 162 Mooreâs Law and Broadband, 163 Economics of Scaling Up Capacity: Congestion and Traffic Management, 163 5 BROADBAND POLICY AND REGULATION 167 The Context for Broadband Policy, 167 Policy Implications of Technological Change, 171 Regulation in the Face of Rapid Change, 171 Asymmetrical Regulation and Achieving Technology Neutrality, 174 Competition, 177 Unbundling and Resale Mandates, 180 When Unbundling Works, 182 Implications for Investments by Incumbents, 184 Facilities-Based Competition, 184 Structural Separation, 185
xvi CONTENTS How Much Competition Is Enough?, 186 Assessing the Degree of Competition, 188 Open Access and Evolving Complements to Facilities-Based Competition, 189 Access Issues in Multidwelling Units, 192 Access to Poles, Conduit, and Rights-of-Way, 193 Expanding Access and Universal Service Policies, 194 Rationales for Intervention, 194 Implicit Transfer Mechanisms Used for Universal Telephone Service, 197 Other Mechanisms for Increasing Access to Broadband, 200 Loans and Grants, 200 Tax Incentives, 202 Vouchers, 203 Research to Develop Technology Alternatives, 204 Looking Forward, 205 The Local Role in Broadband, 206 BIBLIOGRAPHY 216 APPENDIXES A Broadband Technologies 245 B A Brief History of Telecommunications Regulation 296 C List of White Papers Received 307 D Biographies of Committee Members 309 E List of Acronyms 318