Broadband Bringing Home the Bits (2002) / Chapter Skim
Currently Skimming:
Summary and Recommendations
Summary and Recommendations
Pages 5-42
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From page 5... ...
. Broadband service to the home depends on high-speed data transmission across local access facilities the communications links and related hardware that connect the premises and the rest of a telecommunications network, most notably between the home or small business and the set of interlinked data networks that make up the Internet.
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From page 6... ...
Cable operators, incumbent local exchange carriers (ILECs)
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From page 7... ...
If the committee had completed its work in mid-2000, it might well have done so with a rosier assessment of prospects for investment, the strength of broadband overbuilders and competitive local exchange carriers, and so forth. In formulating its recommendations, the committee was mindful of how much the situation had changed just during the course of its work and of how these changes underscore the perils of basing policy on short-term trends (either positive or negative)
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From page 8... ...
While implementing some of the committee's recommendations would require changes to the Telecommunications Act of 1996, many would not. Viewing the act's provisions as only one of a number of factors shaping broadband deployment, the committee believes that revision of the act or associated regulation is not critical at present, but that changes in light of the realities of broadband will become increasingly important over time.
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From page 9... ...
A stovepiped policy environment in which different rules apply to broadband services depending on whether they are provided using cable, public telephone network, wireless, or other technologies will come under increasing pressure. Technology trends suggest another mismatch between present policy and the nature of broadband services.
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From page 10... ...
An examination of local access technologies on the horizon, other computing and communications capabilities, and potential applications makes apparent several quantitative performance and application clusters. Today's residential broadband capabilities, which are typified by
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From page 11... ...
Broadband services should provide sufficient performance and wide enough penetration of services reaching that performance level- to encourage the development of new applications. Capacity improvement and application innovation are tightly coupled in a "chicken-and-egg" fashion: an application will not be made available until a critical fraction of subscribers receives a high enough level of performance to support it, yet service providers will not deploy higher-performance broadband until there is sufficient demand for it.
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From page 12... ...
"Always on" a characteristic of almost all broadband services today is important to enabling certain types of applications. It changes the way in which people experience broadband as a service.
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From page 13... ...
. Indeed, there is a significant gap between the capabilities of current broadband services and some of the cutting-edge applications that have been touted but are not generally available to the public.
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From page 14... ...
Although the performance of broadband services today nearly always exceeds that available through dial-up access, the first-generation systems frequently provide only modest improvements in speed over older technology, and sustained upgrades would be needed to satisfy both broadband definitions 1 and 2. · Per-passing costs of initial investment.
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From page 15... ...
There are several areas of frustration: concerns over an insufficient rate of penetration of some form of broadband; associated concerns that some areas will end up being left out; concerns that the process of upgrading broadband service could stall, leaving consumers with only the performance offered by first-generation technology; concerns about business failures leaving customers with no broadband alternative; and concerns that the quality of what is being deployed will be inadequate in terms of performance, reliability, or customer service. Given the realities of the situation, what is reasonable to expect with respect to deployment?
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From page 16... ...
For an owner of existing facilities the incumbent local exchange carriers and cable multiple system operators realistic investment is incremental, builds on the installed base, and must provide return on a relatively short timescale. An incremental strategy also reflects the view that there is not sufficient demand for the added bandwidth of all-fiber replacement to justify its greater capital costs compared with those for an upgrade of existing plant.
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From page 17... ...
The drying up of Internetrelated venture capital that occurred in 2000-2001 and the associated failure of several CLECs signals difficulties in sustaining deployment efforts. In addition to providing financial incentives for private sector investment, the public sector can complement and stimulate private sector efforts by making long-term investments in infrastructure that ease market entry and foster competition among broadband providers.
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From page 18... ...
. Significant cost reductions in equipment as mature broadband technologies have reached the mass market are another positive indicator.
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From page 19... ...
. Already, fiber is being driven closer to user premises as part of routine improvements to the public telephone network, cable systems, and wireless base-station feeds, and the technology evolution paths for both DSL and HFC rely on fiber optic links that reach closer and closer to the premises.
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From page 20... ...
In the shorter term, satellite and fixed wireless are being used to support market entry by providers that lack wireline assets. Fixed wireless may also offer a longer-term residential broadband option, especially in less densely populated areas or areas able to support a larger number of facilities-based competitors, and satellite has an obvious niche in reaching remote areas.
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From page 21... ...
. This common circumstance will diminish to the extent that the incumbent telephone companies and cable operators both expand their broadband coverage.
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From page 22... ...
From this perspective, and consistent with broadband definition 1 above, local access links are a bottleneck. The communications technologies themselves most notably, ongoing improvements in fiber optic transmission speeds have in fact kept pace with or surpassed improvements in computing.
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From page 23... ...
Going forward, broadband Internet service providers have a choice of offering full, unrestricted connections to the Internet or evolving toward a more defined package of services (using Internet technology)
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From page 24... ...
RECOMMENDATIONS The present policy framework for broadband, which revolves around the Telecommunications Act of 1996, is problematic and is unsuited in several respects to the new era of broadband services. The significance of broadband data communications was appreciated in general terms by some of the key players that shaped the act (and is reflected in multiple sections of the act dealing with advanced services)
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From page 25... ...
There is, indeed, some risk that if facilities-based competition does not materialize, the committee's recommendations could lead to a stagnant scenario in which incumbents face little competition and deploy and upgrade broadband services slowly. Thus, attention should be paid to distribution and performance variations as well as to overall rates of deployment.
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From page 26... ...
Open access policies aim to limit the market power of incumbents (both local exchange carriers and cable operators) in providing broadband services, reflecting concerns that facilities-based competition may not provide a robust alternative in all circumstances and that incumbents' ability to leverage past monopoly status should be bounded.
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From page 27... ...
competition through resale of ILEC services. In facilities-based competition, providers rely substantially on their own local access facilities rather than on local access facilities owned and operated by other providers (a facilities-based provider might make use of backhaul links from other providers)
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From page 28... ...
To the extent that the unbundling requirements are extended to new network elements deployed by incumbents to offer advanced services, such as fiberconnected remote terminals, it is a disincentive for investment by the incumbent in such enhanced facilities, because the incumbent cannot capture all of the benefits of its investment. In making this observation, the committee is not necessarily accepting at face value ILECs' assertions that their investment decisions are driven chiefly by unbundling requirements when there are other plausible explanations (such as the benefits of not having to face the threat of CLEC competition or pressures for financial results)
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From page 29... ...
Because the objective is to minimize disincentives for new investment, existing unbundling rules should be relaxed only where the incumbent makes significant investment to extend service to areas not served by existing infrastructure or in facilities constructed to enable new capabilities. Investment for routine maintenance or minor upgrades should not be sufficient to result in exemption from unbundling requirements.
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From page 30... ...
No individual purchaser of unbundled access has an incentive to internalize the interference problems its traffic causes for others. Logical-layer unbundling exploits the layered way in which broadband services are implemented.
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From page 31... ...
In these areas, policy makers will face the challenge of how to address a noncompetitive broadband market. Questions that must be addressed in fashioning such policy include whether and how to intervene, how long to wait before assuming that a rough equilibrium situation of only a single facilities-based carrier has been reached, what impact either mandated unbundling or voluntary facilities-sharing has on the competitive landscape, and to what extent satellite-delivered broadband (with less attractive price or performance)
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From page 32... ...
Wireless is well suited for certain less densely populated regions, offers an additional path for entry by new facilities-based competitors, and, if suitably configured, is unique in its support for mobile use. Both licensed and unlicensed spectrum plays a role in enabling various wireless broadband alternatives as well as local area and mobile capabilities that complement and supplement wireline broadband access.
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From page 33... ...
Flexible service-centric approaches that tolerate technology diversity are essential, because broadband-delivered services are subject to faster change and greater variation because of the general-purpose nature of the broadband infrastructure over which they run than are conventional services. For example, if broadband is to be used to provide telephone service intended to substitute for conventional telephone service, regulators should focus on the marketing of the service to ensure that the promised reliability and 911 service are in fact delivered, rather than on the technical means by which the service is provided (whether over the Internet or otherwise)
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From page 34... ...
Federal rules should continue to bound the range of outcomes for example, by preventing local governments from raising unreasonable barriers to entry or from discriminating in providing access to public facilities, and by preventing a proliferation of inconsistent local rules that can complicate and deter investment. But because it is communities themselves that have the most at stake in regard to broadband service, there are appropriate forms of local decision making, based on local conditions and needs.
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From page 35... ...
A decision to provide a publicly funded broadband service which might be done in an attempt to introduce service where there currently is none can affect the number of broadband providers in a given area. In cases where a market is capable of supporting only one private provider, the introduction of a public network to compete with it could have the effect of driving the private sector network out of operation.
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From page 36... ...
Recommendation 4.3. Relax federal, state, and local rules to ease market entry or to stimulate investment.
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From page 37... ...
Support planning grants for localities to explore options. Because an exploration of the complex set of issues confronting each community requires expertise, the engagement of various sectors within the community, and input from the public at large, federal and state governments should support planning grants to communities that demonstrate serious interest in taking steps to advance broadband deployment.
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From page 38... ...
Defer Development of a Universal Service Policy for Broadband Until the Nature of Broadband Services, Pace of Deployment, Distribution of Access, and Social Significance Become Clearer. The Telecommunications Act of 1996 devotes considerable attention to measures that continue support for near-universal telephone service.
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From page 39... ...
While the committee anticipates demands that universal service programs be extended to residential broadband, its view is that it would be premature to embark on a comprehensive new universal service program until the overall shape of residential deployment and the nature of broadband services are better understood. The committee does not believe that, at least at present, a social contract analogous to that developed for telephony would be appropriate for broadband.
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From page 40... ...
· System robustness and reliability, reflecting the increasing importance of broadband services to individuals and organizations. Because the primary objective is to develop technologies that can be practically implemented by a broadband provider, research and development programs should encompass systems and economic perspectives,
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From page 41... ...
· Improving our understanding of why local access performance has lagged that in other computing and communications sectors and what strategies might help to close that gap. · Comparing U.S.
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From page 42... ...
Not all such services require broadband (narrowband may be sufficient, and a way of reaching a wider audience in the short term) , but broadband supports much richer content.
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