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providers, interexchange (long-distance) carriers, and
value-added networks that are built on top of these (e.g., the
Internet).
Traditional telecommunications networks have satisfied many of
the requirements implied by the vision of the NII, and, indeed,
form the communications fabric of today's information
infrastructure. They are affordable, ubiquitous, easy to use, and
dependable, and they have supported a wide and increasing range of
applications including telephony, data communications (using
modems), fax, access to the Internet, voice messaging, e-mail
messaging, voice-response services, and access to variety of
information services. In addition to the applications listed above,
which are supported by ubiquitous dial-up telephone services
subscribed to by 94 percent of households,2 there is a variety of higher-speed
and/or specialized telecommunications services provided to
businesses and institutions for such things as high-speed data
transport and video teleconferencing, and for interconnecting
Internet routers (packet switching nodes).
The ongoing challenges in telecommunications networking today
focus on the following:
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1.
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Realizing affordable, higher-speed communications
networking capabilities to support multimedia applications for
residences and small businesses, starting with the widespread
availability of integrated services digital network (ISDN) access.
The challenge is driven by the convergence of the
telecommunications, computing, information services, and
broadcasting industries.
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2.
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Realizing the ability to offer customized
telecommunications services to residences and businesses (e.g.,
calling name delivery, personal telephone numbers, personalized
call screening and routing) by using the emerging advanced
intelligent network (AIN) capabilities of public telecommunications
networks, and supporting customers' needs for mobility by using
combinations of wireless access technologies and AIN functionality
in core public network platforms.
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3.
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Meeting the challenges of "information warfare" as
U.S. telecommunications networks increasingly become the target of
hackers, criminals, and terrorists seeking to exploit the
increasing dependency of U.S. citizens and institutions on
network-based applications.
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4.
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Making increasingly complex and diverse
telecommunications networks appear seamless and easy to use from
the perspective of users and their applications.
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Meeting these challenges in providing an advanced communications
fabric for NII applications requires the investment of billions of
dollars of research and development funds, and the investment of
hundreds of billions of dollars in new network facilities on a
nationwide basis over the next two decades. These investments
include the installation of combinations of optical fiber, coaxial
cable, wireless technologies, and network software throughout the
United States. One cannot overestimate the challenges associated
with making networks and network services reliable, secure, and
easy to use, and doing so at costs that are compatible with the
expectations and ability to pay of residential and small business
consumers. The vast majority of these software investments are
directed at meeting these challenges. Since the demand of
residential and institutional consumers for the newer applications
that are envisioned within the framework of the NII is highly
uncertain, and by implication the demand and associated revenues
for the telecommunications services that the advanced
communications platform can support are uncertain, these
investments involve high risk, except in situations where a
combination of existing revenue streams and cost savings can
justify the investments independent of the demand for speculative
new services. The rapid depreciation of computer and communications
technologies, in terms of rapidly improving performance/price
ratios, makes these investments even more risky because investments
made in advance of market demand may never be recovered in a
competitive marketplace.
Further compounding the risk associated with the large
investments required to put in place the telecommunications fabric
of the NII is the uncertainty associated with the regulatory and
legal framework within which network providers must operate. The
regulatory and legal framework of the past is ill suited for an
environment of large investments targeted toward highly uncertain
market needs using rapidly depreciating technologies in a
competitive marketplace. For example, the requirement of a network
interface device erects an artificial barrier that prevents local
exchange companies from providing complete services to their
customers. The regulatory and legal framework of the future is
still being defined in a slow-moving set of processes. These
