FYI.

Daniel Chatelain


-----Original Message-----
From: Andreas.Schmid1@... [mailto:Andreas.Schmid1@...]

Sent: Friday, August 12, 2005 7:34 AM
To: danielchatelain@...
Subject: FW: [CAnet - news] Broadband reality check


Interesting reports - maybe for the digital city community...

Andreas


> -----Original Message-----
> From: news-bounces@...
> [mailto:news-bounces@...] On Behalf Of Bill St.Arnaud
> Sent: Freitag, 12. August 2005 06:12
> To: news@...
> Subject: [CAnet - news] Broadband reality check
>
> For more information on this item please visit the CANARIE
> CA*net 4 Optical Internet program web site at
> http://www.canarie.ca/canet4/library/list.html
> -------------------------------------------
>
>
>
> [Here are 2 different perspectives on the state of broadband
> in the US. But the analysis and conclusions can be applied to
> most other countries in the world. These debates on
> broadband penetration remind me of the fear mongering 20
> years ago when North America was far behind the rest of the
> world in terms of deployment of videotext. France, at that
> time, seemed to be way ahead with its national Minitel
> system, while in US it was chaos with no coordinated
> strategy. But despite the appearance of chaos, in the bowels
> of a number US universities some boffins were working on
> something called the Internet...as they say the rest is history.
>
> I remain a firm believer that the private sector remains the
> best vehicle for deployment of broadband with facilities
> based competition. The government's only role should be to
> ensure a competitive, level playing field and funding
> research in the next generation of technologies and their
> applications.
>
> But ensuring competition does not mean hobbling the
> incumbents with regulation. I support the recent decision to
> remove open access requirements on DSL. This has already
> resulted in some new creative solutions in the US where
> companies like Earthlink and AOL are partnering with
> municipalities to independently deploy broadband.
>
> In my personal opinion, municipal governments can play a
> critical role in the deployment of broadband (and earn
> valuable revenue), while at the same time not violating any
> regulations on right of ways or compete with private sector,
> by building, on a non-exclusive basis, conduit and
> condominium dark fiber networks open to all. Deregulation, I
> believe, will accelerate these new innovative approaches.
>
> I always point to the Montreal CSEVM municipal conduit
> networks as a good model of this type of approach, which has
> won one high praise from competitors and incumbents alike.
> End of editorial - BSA]
>
> [Thanks to Jere Retzer for this pointer from a posting on
> Gordon Cook's Arch-econ list -- BSA]
>
> I recommend this paper:
> http://aei-brookings.org/admin/authorpdfs/page.php?id=1161
>
> I think it is consistent with my view that the ways to
> stimulate broadband penetration are: (1) lower the costs
> (notably franchise and right-of-way
> costs/obstacles) [see my note above - BSA]; (2) increase the
> anticipated ROI (related to #1 but also includes encouraging
> connections from a demand perspective via eduaction,
> communities of interest, applications); (3) increase
> competition (by anyone including if necessary government),
> which has the effect of creating an opportunity cost of NOT
> taking action (if company A is serving 10 markets and have
> substantial competition in five they are likely to invest
> more in those five; if they can hold revenues with no
> investment they might also not invest at all): and (4) reduce
> the price to the consumer (including competition and reduced
> costs to the providers as well as reduced taxes on the
> service to the consumer - our US taxes on telecom services
> including universal service charges are quite high) will
> naturally stimulate consumer demand, "take rate" and
> therefore penetration.
> Where I think UNE fouled things up is that the ILECs
> perceived that by investing in broadband infrastructure they
> helped the competition so that they were better off not
> deploying or slowly deploying DSL to avoid feeding the CLECs.
> One question I have is how do you encourage "open" IP
> services so that you can have local ISPs as envisioned in
> Brand X without discouraging access providers from investing?
> All of this begs the question of what is the best use of
> universal service funds?
>
> [From posting by Dwayne Hendricks on Dave Farber's IPer list -- BSA]
>
>
> Free Press, the Consumer Federation of America and
> Consumers Union released a report today detailing the ways in
> which the FCC's recent positive assessment of US broadband
> penetration is misleading and glosses over serious problems
> behind an ever-widening digital divide.
>
> The three groups have called on Congress to take notice
> of alarming trends and enact clear policies that will free
> the broadband market from domination by a handful of large
> cable and telecommunications companies. Their recommendations
> include ensuring open access to all high-speed communications
> networks, removing restrictions on public entities that seek
> to offer broadband services to consumers, and opening up more
> of the broadcast spectrum for wireless Internet applications.
>
> A full copy of the report, Broadband Reality Check, is available
> at:
> <http://www.freepress.net/docs/broadband_report.pdf>
>
> Among the findings:
>
> . The FCC overstates broadband penetration rates. The FCC
> report considers a ZIP code covered by broadband service if
> just one person subscribes. No consideration is given to
> price, speed or availability of that connection throughout the area.
>
> . The FCC misrepresents exactly how many connections
> are "high-
> speed." The FCC defines "high-speed" as 200 kilobits per
> second, barely enough to receive low-quality streaming video
> and far below what other countries consider to be a
> high-speed connection.
>
> . The United States remains 16th in the world in broadband
> penetration per capita. The United States also ranks 16th in
> terms of broadband growth rates, suggesting our world ranking
> won't improve any time soon. On a per megabit basis, U.S.
> consumers pay 10 to 25 times more than broadband users in Japan.
>
> . Despite FCC claims, digital divide persists and is growing
> wider. Broadband adoption is largely dependent on
> socio-economic status. In addition, broadband penetration in
> urban and suburban in areas is double that of rural areas.
>
> . Reports of a broadband "price war" are misleading. Analysis
> of "low-priced" introductory offers by companies like SBC and
> Comcast reveal them to be little more than bait-and-switch gimmicks.
>
> . The FCC ignores the lack of competition in the broadband
> market. Cable and DSL providers control almost 98 percent of
> the residential and small-business broadband market. Yet the
> FCC recently eliminated "open access" requirements for DSL
> companies to lease their lines, rules that fostered the only
> true competition in the broadband market.
> Weblog at: <http://weblog.warpspeed.com>
>
>
>
>
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