Tuesday, January 05, 2010

NTIA director downplays enhanced infrastructure competition, wireless as U.S. universal broadband access strategy

Here are National Telecommunications and Information Administration (NTIA) Director Lawrence E. Strickling's comments to the U.S. Federal Communications Commission on the FCC's incubating policy recommendation due to Congress next month on how to best achieve broadband access for all Americans.

The notable points of Strickling's letter: neither competitive market forces nor emerging wireless technologies will necessarily get us there. While not stating so directly, Strickling implicitly acknowledges that wireline telecommunications infrastructure like electric power and water distribution is a natural monopoly due to the high cost of building it. Hence, more competition isn't going to be the answer, Strickling suggests, noting however there should be more competition among broadband Internet access services sold over that infrastructure. That means open access networks, although Strickling didn't use that term explicitly in his letter to the FCC.

As for wireless, Strickling writes, it remains unclear that it could provide a viable "third pipe" to deliver advanced telecommunications (IP-based) services to residences and small businesses. Strickling's doubts are well founded. Tim Nulty, who believes fiber to the premises can pencil out even in rural areas, explains why with an aeronautical metaphor. While wireless may offer mobility, he says, a fiber-optic network connected directly to homes boasts nearly unlimited capacity. "Think about 747s and helicopters,” Nulty told The Progressive magazine. “Helicopters are marvelous when they’re used for what they’re good at. But you don’t use them to fly thousands of people between Boston and Chicago. For that you need 747s.”

Nulty made that observation in August 2008 and it's even more relevant today as bandwidth demand has mushroomed with the proliferation of IP-based video content. It would be a mistake for policymakers to punt on wireline, betting on the come that commercial wireless providers will fill in broadband black holes given the many technological, backhaul, terrain and business model challenges they face. In some areas, they have. But it's only a temporary bridge on the road toward fiber to the premises.

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