Monday, May 08, 2006
How to increase broadband competition
Susan Crawford, seeking to learn from Korea and Japan, identifies three routes towards broadband competition:
3) Facilities based competition: Still waiting for that mythical third wire, or perhaps some unused, unlicensed TV spectrum, but not holding my breath. (Broadband over powerline? It is such an encumbered technology that it is its own barrier to entry.)
2) Wholesale access: Been there, tried that, but the Bells wouldn't unbundled elements be sold at prices that'd let others play, litigating, legislating and lobbying until the last vestiges of wholesale access dribbled down the drain with the baby. Susan C says that unbundled elements a la 1996 Telecom Act was a local loop unbundling play, but I think it was an attempt at wholesale access.
1) Real local loop unbundling, a la Japan and Korea. Where it has been honestly implemented, it works. But, as Susan C points out,
(3) If competitors arise, we can crush 'em or buy 'em. Except for cities, but if Earthlink can build muni networks, we can too and co-opt the whole movement.
(2) Wholesale access: we dodged that bullet and took away the gun.
(1) Our public relations efforts, especially the one about "owning our own networks," has effectively taken real unbundling out of the dialog. Even the acronym for Wire and Cable Company (WACCO) sounds whacko.
For completeness, there are at least two other possibilities:
4) Trust the incumbents. That's the current strategy. No further dignification needed.
5) Find new network architectures that do not have the barrier of high fixed costs. Mesh networks.
(1) "local loop unbundling," which means requiring the incumbent to physically open its facilities to new entrants, who then find new ways to provide services to end-customers; (2) "wholesale access," which means requiring the incumbent to sell a wholesale broadband access product to all comers; and (3) encouraging other kinds of broadband access ("facilities-based competition"), which means helping new entrants have their own networks without having to deal with the incumbents at all.
3) Facilities based competition: Still waiting for that mythical third wire, or perhaps some unused, unlicensed TV spectrum, but not holding my breath. (Broadband over powerline? It is such an encumbered technology that it is its own barrier to entry.)
2) Wholesale access: Been there, tried that, but the Bells wouldn't unbundled elements be sold at prices that'd let others play, litigating, legislating and lobbying until the last vestiges of wholesale access dribbled down the drain with the baby. Susan C says that unbundled elements a la 1996 Telecom Act was a local loop unbundling play, but I think it was an attempt at wholesale access.
1) Real local loop unbundling, a la Japan and Korea. Where it has been honestly implemented, it works. But, as Susan C points out,
It's not easy: you have to find a way to give the incumbent enough of a return on its last-mile investments so that maintenance/upgrading continues, and you have to find a way to make that price low enough so that new market entrants are willing to take the plunge.To summarize from the Bell view:
(3) If competitors arise, we can crush 'em or buy 'em. Except for cities, but if Earthlink can build muni networks, we can too and co-opt the whole movement.
(2) Wholesale access: we dodged that bullet and took away the gun.
(1) Our public relations efforts, especially the one about "owning our own networks," has effectively taken real unbundling out of the dialog. Even the acronym for Wire and Cable Company (WACCO) sounds whacko.
For completeness, there are at least two other possibilities:
4) Trust the incumbents. That's the current strategy. No further dignification needed.
5) Find new network architectures that do not have the barrier of high fixed costs. Mesh networks.
Technorati Tags: F2C, FirstMile, MeshNetworks, SusanCrawford
Comments:
Dave, take a look at what Ambient Corporation (http://ambientcorp.com/) has been able to do with BPL. They have a 200Mbps backbone technology, which can connect to gigE, direct fiber, and WiFi. Disclaimer: I am a (small-time) investor in the company.
How about option 0, secession, which allows the user to transfer ownership of the loop into a local co-op at some regulated buy-out rate based on some generous cost of replacement?
Although I hear the word 'secession' may not have the most welcome overtones stateside. Come to think of it...
Although I hear the word 'secession' may not have the most welcome overtones stateside. Come to think of it...
It seems that the New Zealand government, a late comer to ULL legislation has learned all the lessons Susan mentioned:
Today's package includes:
* Requiring the unbundling of the local loop and sub-loop copper-wire lines between telephone exchanges and homes and businesses, allowing other Internet Service Providers to compete fully with Telecom to provide faster, cheaper broadband.
* Regulatory action such as information disclosure, accounting separation of Telecom's business operations and an enhanced Commerce Commission monitoring role in order to ensure improved competition.
* Removing constraints on the existing regulated Unbundled Bitstream Service to ensure ISPs can offer better and cheaper broadband at upload speeds faster than 128kps.
* Encouraging investment in alternative infrastructure
Net Neutrality isn't addressed, yet.
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Today's package includes:
* Requiring the unbundling of the local loop and sub-loop copper-wire lines between telephone exchanges and homes and businesses, allowing other Internet Service Providers to compete fully with Telecom to provide faster, cheaper broadband.
* Regulatory action such as information disclosure, accounting separation of Telecom's business operations and an enhanced Commerce Commission monitoring role in order to ensure improved competition.
* Removing constraints on the existing regulated Unbundled Bitstream Service to ensure ISPs can offer better and cheaper broadband at upload speeds faster than 128kps.
* Encouraging investment in alternative infrastructure
Net Neutrality isn't addressed, yet.
