Before the

National Telecommunications and Information Administration

Washington, D.C. 20230

 

 

                                                                       

In the Matter of                                                )

                                                                        )

Deployment of Broadband Networks                )           Docket No. 011109273-1273-01

and Advanced Telecommunications                  )

)

                                                                        )

 

 

COMMENTS OF THE

INFORMATION TECHNOLOGY INDUSTRY COUNCIL

 

 

The Information Technology Industry Council (“ITI”) submits these Comments in response to the Request for Comments in the docket captioned above.

ITI is the association of the leading information technology companies, including computer hardware and software manufacturers, networking companies, and Internet services companies.

I.                   Setting Policy Priorities

As the leading information technology trade association, ITI actively supports the development of regulatory and public policy frameworks that will encourage rapid deployment of affordable broadband services. ITI has actively participated in the policy debate surrounding broadband since its earliest stages, submitting various comments to the Federal Communications Commission (FCC) and testimony before congressional committees.  ITI does not endorse or advocate for any single broadband technology, rather we believe that consumers will benefit most from the deployment of multiple, facilities-based technologies, including cable modems, DSL, satellite, fixed wireless, mobile wireless, and others.  Minimally regulated competition among all of these broadband technologies is the best way to promote rapid deployment of broadband technology and innovation in broadband applications.  In particular, we want to emphasize the need to create a deregulatory environment that can maximize speeds available to consumers at affordable prices.  ITI’s goal is to ensure that consumers have affordable Internet access at the maximum speeds, enabling them to experience the full potential of the Internet and the information technology revolution.

II.   Defining Broadband

In examining the broadband market, ITI believes NTIA must draw a distinction between current generation and next generation broadband services and technology.  By the term “current generation” broadband, we refer to the vast majority of broadband services available to consumers today, which generally provide speeds between 200 kbps and 1.5 mbps.  By contrast, the term “next generation” broadband is used to refer to those technologies generally not available in today’s market which are capable of delivering far greater speeds of  up to 100 mbps or more.  

This distinction between current generation and next generation broadband is important for several reasons.   First, there is a technological dividing line between the two, which is the capability to deliver high quality video.  In order to receive a DVD quality picture, consumers will need nearly 4 mbps of bandwidth per channel and HDTV signals will require around 20 mbps per channel.[1]  Next generation broadband will be able to deliver such applications, while current generation, in most cases, is not capable of such performance speeds. 

Second, while we recognize that deployment rates of current generation broadband are progressing, deployment of next generation infrastructure has barely begun.  We cannot be satisfied with rising current generation deployment numbers alone.  If we judge our success by this standard, we are settling for the transition technology, and taking pressure off the drive for a next generation of broadband.

Finally, as policy makers examine this issue, it is important that this distinction be recognized so specific focus can be place on next generation issues.  For example, as policy makers statistically measure deployment and usage, they should distinguish between various speeds of the broadband service.  We would urge policy makers to begin to focus on the next generation of broadband.  To this end, we propose an ambitious goal for the nation of bringing 100 mbps service to all Americans by 2010.

The question of how to define broadband is important if we are to ultimately maximize the bandwidth available to consumers.  Under the FCC’s current interpretation of  “advanced telecommunication capability,” any service exceeding 200 kbps qualifies as broadband.  However, Congress has defined advanced telecommunications capability “[a]s high-speed, switched broadband telecommunications capability that enables users to originate and receive high quality, voice, data, graphics, and video telecommunications using any technology.”[2]  The facts are that DVD-quality video signals require a transmission speed of approximately 4 mbps, far in excess of the 200 kbps threshold.  Although a lower standard could qualify more services as broadband, it would undercut the goal of maximizing broadband speed and bringing next generation capabilities to consumers.   ITI strongly believes policy makers must begin to take a closer look at what speed services are being made available to consumers, not just if they exceed the 200 kbps threshold.

 

 

III.   Rate of Deployment vs. Other Technologies

      The Request for Comments noted that several studies indicate the rate of deployment of broadband is equal to or greater than the deployment rates for other past technologies.  This argument simply misses the point.  Instead of looking back, we should be looking forward to how we get more people broadband services at faster speeds.  These comparisons are neither relevant nor accurate as a barometer by which to judge broadband.  The modern high-tech industry does not measure its growth or success against the industries that brought us the automobile, telephone, and radio.  Modern business models, as well as design, manufacturing, and distribution capabilities all have created an environment in which products enter the market place at a far quicker rate than in previous decades.  Moreover, broadband is factually distinguishable from those products.   Unlike the automobile or radio that introduced completely new products into a consumer’s lifestyle, most potential broadband customers already own computers and already have Internet access.  Thus, the jump to broadband is a relatively minor, incremental step.  Thus, we believe that such comparisons are not accurate and only serve to misinform the debate.

IV.       Supply and Demand Arguments

The Request for Comments raises the question of supply and demand for broadband services.  While these categories help add structure to this issue, policy makers cannot afford to focus on just supply or just demand for broadband services.  Supply and demand are not mutually exclusive issues, but rather are intertwined so that increases in either one will drive the other.  The number of potential users and the speed of the available service will be a major factor in the amount of investments made in new applications.  Likewise, the level of demand created by those new applications will be a major factor in the amount of investments made in deployment of new broadband infrastructure. 

On the supply side, we recognize the progress and investment made, particularly by the cable industry, in bringing current generation broadband to consumers.  However, as previously noted, deployment of next generation broadband capable of providing high quality video to the home, has just begun.  For example, only .000056 percent of Americans enjoy fiber-based residential service at speeds of 100 Mbps.[3]  Thus, any examination of supply must take into consideration the supply of different speeds of broadband service.

V.                 Cable Access

      ITI has previously supported the FCC’s decisions to forego regulatory action to mandate cable access.  A broadband marketplace unencumbered by regulation will best produce competition and consumer choice in the broadband access market while enabling consumers to realize the full economic benefits of innovative information technologies.  By forbearing from mandating cable access, the FCC’s decisions on this matter removed the uncertainty that was a disincentive to the massive investment necessary to make the cable infrastructure ready for two-way broadband Internet access.  ITI believes this policy has been a success as cable investment in broadband infrastructure has occurred on a large scale and has in turn helped drive investment and innovation in other competing broadband technologies such as DSL.  

VI.       DSL Deregulation

      ITI has supported steps to deregulate certain advanced services such as DSL by eliminating or revising interconnection, unbundling and resale regulations for new packet-based equipment and fiber loops deployed to residences.  For example, ITI endorsed S. 1126, the Broadband Deployment and Competition Enhancement Act of 2001, introduced by Senator Sam Brownback.  Such deregulatory action will increase the deployment of DSL services by removing barriers to investment in vital broadband infrastructure.  In turn, it will enhance DSL’s competition with cable, spur technological innovation, reduce prices, and bring the benefits of broadband technology to more consumers.  At the same time, eliminating these requirements will not undermine the ability of other competitors to provide their services so long as ILECs continue to comply with the collocation and loop provisioning rules.  Unlike the case of existing local loops, ILECs do not have a legacy advantage in newly installed facilities for advanced services.  Instead, the necessary equipment and installation opportunities are readily available to competitors and ILECs alike.  ITI supports a deregulatory process that requires ILECs to meet build-out benchmarks, significantly increasing the number of households served by DSL-capable loops and likely benefiting all competitors.  

VII.           Tax Policy

      ITI supports rational tax policies that will improve the investment environment for information technology, including broadband.  We firmly believe that information technology and broadband investment will help drive economic growth.  From 1996 to 1999, productivity grew at a roughly 2.6 percent annual rate compared to the 1.4 percent average annual increase from 1974 to 1995. Six major studies by the Congressional Budget Office (CBO), the Council of Economic Advisers and others have credited the use and production of IT with one-half to three-quarters of that acceleration in productivity growth.  Given IT’s role in productivity and economic growth, ITI believes investment in broadband infrastructure is essential to growing the economy. 

      ITI has endorsed S.88, the Broadband Internet Access Act of 2001, introduced by Senator Rockefeller.  This technology-neutral legislation would provide tax incentives for the deployment of broadband technology to urban and rural areas that today are often not served by high-speed services, as well as for the build-out of very high-speed, next generation broadband services to residences.  S.88 recognizes the need for this investment in our IT infrastructure so all Americans can realize the opportunities of broadband technology and the Internet.  S.88 also draws that essential distinction between current generation and next generation broadband, and take steps to address both.

IX.    Spectrum Allocation

      Third generation mobile wireless services will provide another broadband alternative, which will generate competition to reduce consumer prices, promote innovation in service offerings, and make broadband available in some areas of the country where it is not presently offered. The allocation and licensing of sufficient and globally harmonized spectrum is critical to realizing this goal.  ITI strongly supports ongoing efforts to engage business and government in a productive effort to find a solution for utilizing portions of the 1.7GHz band for 3G.  The 1.7 GHz band has the advantage of being harmonized for global use, however, the government currently uses the 1.7 GHz band for its communications needs, including some essential to our national security.  We fully recognize the national security concerns and believe there is a solution that can be reached.  The relocation and modernization of these systems should be fully reimbursed, and auction revenues should be earmarked towards relocation and modernization of the incumbent communications systems rather than being designated as funds for the general treasury.  Moreover, any government agency required to relocate, as we recommend, should be given a guarantee that relocation of existing systems and modernization of those systems will be fully reimbursed by auction revenues without the threat of any reduction in their other expected appropriations.

X.  Conclusion

ITI believes that broadband policy should encourage continued deployment of infrastructure and services on multiple platforms at the maximum speed while fostering an environment of investment and innovation.  We look forward to working with NTIA to achieve these goals.

 

                                                                           Respectfully submitted,

 

                                                                                                                                                INFORMATION TECHNOLOGY

                                                                           INDUSTRY COUNCIL

                                                                                   

                                                                                               

 

 

Matthew J. Tanielian

Director, Government Relations

Information Technology Industry Council

1250 Eye Street, N.W., Suite 200

Washington, D.C. 20005

202.626.5751

 

 

 

 



[1] Greene, Kira, "Coming eventually: TV on the PC," Broadcasting and Cable, 11 December 2000, 88.

[2]Section 706(b) of the Telecommunications Act of 1996, Pub. L. 104-104, Title VII, Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C. 157 (“section 706(b) of the 1996 Act”).

[3] Kirby, Rob, "Fiber-Can't Find It's Way Home? – Residences with FTTH enjoy space-age data and entertainment options.  Read why yours probably isn't one of them," Network Magazine 1 September 2001, 62