DSL

DSL Prime Editorial: NRC vs. Tauzin — continued

Gurus galore
The National Research Council/National Academy of Sciences "Broadband: Bringing Home the Bits" committee is an extraordinary group. Internet pioneer Clark, Time Warner CTO James Chiddix, Stanford Professor John Cioffi (developer of DMT coding and other key DSL breakthroughs), Intel Fellow Kevin Kahn, Paul Green (who designed the world's first operational spread spectrum system), Columbia's Eli Noam (once a State Commissioner), and a dozen others, many with strong industry involvement. Dave Kettler of BellSouth and Milo Medin of @Home were among the reviewers.

Clark, a crucial architect of the Internet for thirty years, set a moderate tone of the report, which included very limited actual changes in the immediate future. "To make sure the result is in fact new deployment, changes should only apply to new investment, and the government should monitor and negotiate to make sure the result is wider service of high quality. " Clark wrote presciently in 1994, "Industry is currently telling congress that it should stop all attempts to shape, control, or attend to networking, and leave it all to them. ... there are places where this will work just fine, but there are others, such as insuring open access, where it will not. " I thank Dr. Clark for taking the time to confirm his quotes over the phone and by e-mail.

Nikil Jayant, the panel's chair, was also clear. "Once the market takes shape, the federal government may need to step in to help improve service where broadband availability is lacking or to address any abuses of market power." (Reuters) These comments are surprising, and particularly persuasive because many of the committee members have ties to the industry, directly or indirectly earning their living from servicing telcos and their suppliers. The language they used is often obscure or guarded, requiring a careful reading to get to the point, but reading the full 200 pages is well worth the effort. Dave Clark remembered the faint praise he received on a previous report—"reads very well for a committee".

Deeper questions
The news is focusing on the D.C. struggle, but the actual report is much more interesting. Strong disagreements among committee members were resolved by ducking some key issues, especially in the short abstract, but the material is rich.

They propose an interesting definition of the desired broadband speed—fast enough to keep up with the application, and hence continually increasing. Spillover benefits of widespread deployment should be very large, creating a major public interest in deployment. Fiber will move closer to each home, but the $100B cost of a complete fiber build is a major obstacle.

Many territories will have little or no competition, so policy going forward has to deal with some territories that are competitive and others which are not. If only two companies compete (cable/DSL), that's a very different situation than when multiple companies have facilities, and requires different policy. The viability of the CLECs can't be assumed, and hence it's not clear whether full competition will develop.

If new applications requiring high bandwidth don't emerge, that's a crucial sign that broadband is not delivering adequate service. In the short term, that means getting speed from 100's of K up to DSL/cable maximums in the megs. The report avoids saying so, but my impression is that most members see fiber as the way to go, and are looking for ways to create social pressures that will make it inevitable, with FTTC/VDSL an alternate future. They speak of local initiatives, research, and demonstration projects on fiber, because of the difficulty finding the $100B or so (their low estimate) a full build-out will cost.

To no ones' surprise, the panel, with many academics on it, recommended funding more research.

The complete report is here and the press release (summary) is here.

SBC's remarkable spin
SBC's response is amazing if you've read the report. SBC implies support from a report that discusses monopoly at length, points out needed regulation, criticizes the slow U.S. telco deployment, and provides examples of community action that bypass the telcos.

"We agree in principle with the conclusion that more regulation is not the answer, and that the U.S. government should focus instead on competition and incentives to boost new investments in-and fuel further deployment of-broadband services. Given how important a robust broadband services market is to the U.S. economy, SBC supports solutions that allow marketplace incentives to work. H.R. 1542, the Tauzin-Dingell bill, for example, would level the broadband regulatory playing field and boost competition, provide more customers with high-speed Internet access, and help stimulate our nation's economy. " (SBC release)

Credibility is a hard thing to regain, once lost.

We are journalists, not investment advisers; invest at your own risk and do further research.

Copyright 2001 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.

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	[Nov. 20, 2001]	Tauzin-Dingell Would Cost 77,000 Jobs
	[Nov. 7, 2001]	FCC National Broadband Policy (Or Lack Thereof)
	[Oct. 17, 2001]	DSL Prime Editorial: Time to Deal in D.C.