Local Broadband and Open Access

1
Local Broadband and Open Access
2
Context

• Asymetric regulation cable and telcos
• Broadband deployment xDSL v. Cable modems
• Mergers cause policy review
• ATT / TCI / MediaOne
• AOL / Time Warner
• Test case for convergence policy

3
Main themes

• Stakes approach adopted will have major
  implications on Internet evolution
• Competition alone won't force openness
• The problem with closed access
• Conclusion examine what might be done

4
This is a Big Deal

• 3rd phase of internet
• Broadband and always on
• Widely deployed end 2000 3.6m cable, 2m DSL
  (7.1m total)end 2001 7.1m cable, 3.9m DSL
  (12.8m total)
• Network openness was key to internet success in
  phase 1 and 2
• Policy intervention was critical (unbundling,
  open access to telephone network)
• "Unregulation" myth
• What mechanisms should shape 3rd phase
  deployment?
• Innovation - what kinds of uses will be explored?
• Participants - who gets to play?

5
Competition won't open networks

• What is the relevant market?
• The extent of competition
• Different target markets
• DSL - business
• Cable - residential
• Still many areas remain unreachable by DSL
• Cable still has substantial (though narrowing)
  lead.
• FCC data end 2001 (extracted from FCC July02
  report)
• Not quite 2-to-1
• 56 million homes passed by cable-modem ready
  plant vs 6m for DSL (2001)

6
Competition (cont'd)

• Switching is complicated (either way)
• Substantial hardware cost (install, wiring)
• Software
• Moving activity (email, servers,)
• Bundling (cable w/ video, AOL with IM)
• Awareness of what you are missing is elusive
• Closed cable strengthens the hand of CLECs
• Decreases incentives to deal fairly with ISPs
• Is there a problem justifying investment by
  cable?
• Substantial investment already directed at DTV
  telephony over cable
• Open cable in Canada

7
Excite_at_Home's closed access

• Constraints on end-user activities
• Limits
• Limits on downstream video
• Limits on upstream traffic
• Prohibition on servers
• Prohibition on work-related use (-gt_at_Work)
• Privacy (enforcement)
• OVERALL extension of Broadcast model
  "programming the internet".
• Curtails experimentation with alternative
  patterns of use (key to innovation in the past)

8
Comcast AUPs

• "You may not run a server in connection with the
  Service, nor may you provide network services to
  others via the Service unless you are subject to
  a Service plan that permits otherwise. Examples
  of prohibited uses include, but are not limited
  to, running servers for mail, http, ftp, irc,
  wifi, and dhcp, and multi-user interactive
  forums."

9
Closed access (cont'd)

• Shaping the architecture of network marketplace
• Caching and replication - tied to content
  partnership deals
• Steer usage and transactions, unknown to users
• Who can enter such deals?

10
Policy decisions

• 2000 ATT / TCI / MediaOne wait and see
• 2000 AOL / Time Warner
• ISP choice
• First screen
• Billing
• Technical performance
• Contract disclosure
• IM interoperability
• 2001 Broadband bills submitted --a sample
• HR 1542 "Internet Freedom and Broadband
  Deployment Act of 2001"
• HR 1698 "American Broadband Competition Act of
  2001,"
• HR 1697 "Broadband Competition and Incentives Act
  of 2001"

11
Policy (cont'd)

• 2002 FCC declaratory rulingCable Modem service
  is an "interstate information service, not a
  cable service, and there is no separate offering
  of telecommunications service." (FCC NPRM DA/FCC
  Number 02-77, sec. 7, p. 5, 3/14/02)
• 2002 "The Jumpstart Broadband Act" introduced.
• "Coalition of Broadband Users and Innovators"
  sends Letter to FCC November 18, 2002
• consumer groups the Alliance for Community Media
  and Media Access Project
• Companies Amazon.com, Apple Computer, eBay,
  Microsoft, RadioShack Corporation, The Walt
  Disney Company, and Yahoo!
• Trade associations AeA, Association for
  Competitive Technology, Association for
  Independent Video and Filmmakers, Association for
  Local Telecommunications Services, Competitive
  Telecommunications Association, CompTIA, Consumer
  Electronics Association, Information Technology
  Association of America, and National Association
  of Manufacturers.

12
Policy convergence?

• Moving beyond "technology-based" regulation.
• Generic problem Leverage network control into
  e-marketplace control
• Other cable carriers
• Other technologies e.g wireless (Noam, 2001)
• What is the right balance? open, but light-touch
• OFTEL approach
• Disclosure of underlying architecture
• Mandatory mediation.
• Ex-ante (v. antitrust)
• What is the harm in waiting?

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CONCLUSIONA discontinuous transformation

• technology
• user pressures
• a network of network
• politics and policy

14
Technology

• its all bits, cheap logic and plentiful
  bandwidth
• interchangeable media
• the end of scarcity
• the network is the computer (...and
  inversely)
• network control separable from network ownership

15
User pressures

• explosive growth of data traffic
• new kinds of applications
• networks have become key to re-organization and
  competitiveness
• strategic networking requires control
• users increasingly drive network evolution

16
A network of networks

• multiple technologies
• multiple users
• multiple owners
• overlapping services

17
Politics and policy

• deregulation trend
• conflicting regulatory regimes
• ...but interchangeable providers
• What should be the common framework?
• common carriage?
• first amendment?
• licensing?
• other?