TCS Daily

You Get What You Pay For

By Duane D. Freese - January 29, 2002 12:00 AM

The Broadband Outlook 2002 conference last week concluded with a familiar refrain. Broadband ain't ready for prime time. Yet.

However, the fact that 70 percent of homes have high speed networks available for them to hook into but only 10 percent do supports the claims made by Robert Pepper, chief of the Federal Communications Commission's office of plans and policy. He says the problem "seems to be a demand gap, not a deployment problem."

Not all agree with his conclusion. Verizon's Link Hoewing pushed the regional Bell phone companies' line for enacting the Tauzin-Dingell Act at the conference. That legislation would free the Bells of regulations requiring them to open up their local loops to competition to encourage them to build out their brand of broadband, digital subscriber lines (DSL).

"Getting a choice of providers will drive adoption," he admitted. But as Hoewing was admitting that, Verizon itself was saying that the declining competition for local phone service in New York was no reason for the public service commission there to cut wholesale rates Verizon charges to competitors by 30 percent.

No doubt, competition for broadband is needed, but the basis for competition needs to cross the telecommunications spectrum so that the local monopolies don't leverage their control of the local loop into a remonopolization of the system. That's the problem regulators must deal with.

And that's one reason that high-tech executives of the Computer Systems Policy Project - including Intel Corp., Unisys Corp., Motorola, and NCR Corp. -- who went to Capitol Hill and the White House recently, didn't endorse the Tauzin-Dingell bill. Instead, they pushed to "take steps to eliminate barriers to widespread, advanced wired and wireless broadband deployment." The one specific proposal they made had to do with opening up more broadcast spectrum for broadband.

Outside Washington, spurring broadband adoption rests upon convincing consumers that they'll get something out of the money they spend for it.

One way to do that is to let them know better what they are missing now. In short, those selling equipment and services need to do a better job marketing everything they have to offer.

Another step that would help deployment would be the development of more applications that increase the appeal of broadband for customers. A San Francisco federal judge's suspension (for now) of a suit against Napster by the Recording Industry Association of America is a step in the right direction.

The hope now remains for an affordable way to offer music downloads and file sharing. At issue is, of course, how to properly compensate properly the artists and recording industry without raising prices so high that they discourage legitimate downloads and encourage illegal markets instead. As bandwidth becomes more readily available and technology improves, music and movies are two keys to the broadband revolution.

Indeed, ultimately broadband expansion depends on giving people something they want at a price they can afford - and enforcing competition will go a long way to making broadband affordable.


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