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Broadband: Bringing Home the Bits (2002)

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Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
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Abstract

This report examines the technologies, economics, policies, and strategies associated with the broadband challenge (the “first mile” or “last mile” high-speed connectivity problem, depending on one’s perspective) and makes recommendations aimed at fostering broadband’s deployment and use. Following roughly a decade of development and experimentation and a recent period of rapid growth, first-generation broadband services, using primarily cable modems and digital subscriber line (DSL), are available in many markets. This progress is offset by recent business failures and uncertainty about the pace of future investment—factors that in part reflect slow growth in subscriptions for broadband services. Today, dial-up connections over the public telephone network remain the dominant way homes and small businesses connect to the Internet or other online services. Broadband, though, not only provides higher-performance options for connecting to familiar Internet and other online services, but its capacity and “always-on” nature also enable new network-based activities. Together, these capabilities promise significant social and economic benefits. The Computer Science and Telecommunications Board initiated this study in an effort to understand the hows and whys of broadband deployment and use.

The Committee on Broadband Last Mile Technology found that broadband should be defined in a dynamic and multidimensional fashion, and it offers two complementary approaches to characterizing what constitutes broadband service: (1) local access link performance should not be the limiting factor in a user’s capability for running today’s applications, and (2) broadband services should provide sufficient perfor-

Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×

mance—and wide enough penetration of services reaching that performance level—to encourage the development of new applications. These definitions reflect the central “chicken-and-egg” conundrum: an application will not be made available unless a sufficient number of subscribers have broadband connections with performance high enough to support the application, yet service providers will not invest in higher-performance broadband until they know that there will be sufficient demand for the service. Residential broadband capabilities today, with speeds typically ranging from several hundred kilobits per second to several megabits per second downstream and several hundreds of kilobits per second upstream, support familiar applications such as Web browsing, e-mail, messaging, interactive games, and audio download and streaming. The next performance plateau, which is not widely available at present, provides downstream speeds of several tens of megabits per second, thus enabling new applications such as high-quality streaming video or rapid download of full-length audiovisual files. With the addition of comparable upstream speeds, computer-mediated multimedia communications —to enable more effective telecommuting and distance education, for example—become possible. Fiber-to-the-home (FTTH) would offer the highest performance—gigabit speeds both up- and downstream. Investment in FTTH has lagged other options because of costs and uncertainty about demand for its capabilities. Some investment currently is providing opportunities for experimenting with technology alternatives and applications and for learning about demand. At the same time, a variety of wireless options provide either cost-effective alternatives (especially for remote locations) to wireline or mobility and ubiquity that complement wireline technologies.

Development, deployment, and adoption will be an ongoing process that works through several mechanisms: incremental upgrades and reallocation of capacity in existing broadband infrastructure, improved end equipment that permits faster performance over the existing infrastructure, and installation of new infrastructure. These improvements may or may not require new technology, but all require investment premised on market demand and willingness to pay. Indeed, many factors—not simply technology—will shape the pace and distribution of broadband deployment.

While broadband is sometimes characterized in terms of a horse race between DSL and cable and between the incumbents that use these technologies, the committee believes that the long term will be technologically diverse, reflecting geographical and market variation, the maturity of and experience with different technologies, topography, and the condition of existing infrastructure. Because local conditions vary, broadband’s availability will be quite uneven, especially in the earlier stages. The nature

Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×

and number of competitors will vary considerably by geographical location: from areas able to attract no—or only one—incumbent terrestrial provider (likely an incumbent local exchange carrier or cable operator) to easier-to-serve, higher-demand areas likely to attract one or more facilities-based providers in addition to the incumbents. This variability and flux will be troublesome to industry, regulators, and policy makers alike, implying that provider strategy and government intervention will have to change over time as the market and services evolve.

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. Although it does not explicitly recommend revision of the act (or comment on contemporary legislative proposals), the committee anticipates such examination and is cognizant that implementation of some of its recommendations would require revisions to either legislation or implementing regulation. The committee’s recommendations, outlined and condensed below (complete versions are presented in the Summary and Recommendations chapter of this report), are intended as principles to guide broadband policy over the next several years:

  • Prioritize widespread deployment and defer new regulation in the early stages. Presupposing how broadband services and markets will evolve risks misjudgment regarding outcomes and strategies. Wider broadband availability (in the context of other recommended measures) will help stimulate new applications, which will help increase demand, which will in turn make deployment, upgrade, and new market entry more attractive. At the same time, government should enhance its monitoring of deployment, investment, use patterns, and market outcomes to provide a firmer foundation for any future action. The familiar goals of universal access to important capabilities and consumer satisfaction remain, but the knowledge of how best to achieve them in a broadband world must be developed. There is sufficient time to observe and analyze as deployment and use unfold and to defer measures that could result in a premature stall in investment.

  • Structure regulation to emphasize facilities-based competition and encourage new entrants. The policy goal, simply put, should be to increase the extent of competition through facilities ownership (and voluntary business arrangements to open facilities) rather than through long-term reliance on mandated unbundling. It is reasonable to maintain existing rules for unbundling existing telephone copper plant facilities. But unbundling rules should be relaxed in exchange for investment in new facilities that can broaden service availability and/or increase performance—subject to appropriate mechanisms to address extensions of market power. Some

Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×

locales will not see facilities-based competition, and competition in some areas will change; both situations present policy challenges. Where unbundling is warranted, particularly with respect to new facilities, logical layer unbundling—unbundling at a higher service-level of communication, as in cable open access—should be preferred in the long run to physical unbundling because it promises technical advantages and administrative ease.

  • Take active steps to promote deployment and facilities-based competition, including at the local level. The degree of competition and prevalence of technology options will vary by region, state, and municipality. Federal rules should continue to bound the range of outcomes, but in many cases, local decision making based on local conditions and needs is appropriate. Various sorts of incentives and local arrangements, detailed in this report, can encourage broadband deployment. While a few communities have already undertaken broadband initiatives, the majority have not and could benefit from efforts to enhance local capacity. The committee recommends supporting planning grants for localities to explore options; providing cost-sharing for field trials, including local-government-sponsored initiatives; and establishing a national clearinghouse to raise awareness, provide technical assistance, and disseminate best practices for local and regional efforts to accelerate broadband deployment.

  • Support research and experimentation. Government should support research and experimentation that would foster the emergence of new competitors; increase understanding of economic, social, and regulatory factors; and spur the development of new content and applications that would make broadband more compelling and useful and foster growth in demand and use. Many of the conditions evident today reflect current technologies, business models, and policy intervention—all of which are subject to change. Research is valuable for creating new options and lowering costs, and it should be pursued vigorously across both technical and nontechnical arenas.

Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×
Page 1
Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×
Page 2
Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×
Page 3
Suggested Citation:"Abstract." National Research Council. 2002. Broadband: Bringing Home the Bits. Washington, DC: The National Academies Press. doi: 10.17226/10235.
×
Page 4
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Broadband communication expands our opportunities for entertainment, e-commerce and work at home, health care, education, and even e-government. It can make the Internet more useful to more people. But it all hinges on higher capacity in the “first mile” or “last mile” that connects the user to the larger communications network. That connection is often adequate for large organizations such as universities or corporations, but enhanced connections to homes are needed to reap the full social and economic promise.

Broadband: Bringing Home the Bits provides a contemporary snapshot of technologies, strategies, and policies for improving our communications and information infrastructure. It explores the potential benefits of broadband, existing and projected demand, progress and failures in deployment, competition in the broadband industry, and costs and who pays them. Explanations of broadband’s alphabet soup – HFC, DSL, FTTH, and all the rest – are included as well. The report’s finding and recommendations address regulation, the roles of communities, needed research, and other aspects, including implications for the Telecommunications Act of 1996.

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