How to Increase Broadband Competition

May 09, 2006 | Inside: Business Strategies

Susan Crawford, seeking to learn from Korea and Japan, featured here] towards broadband competition:

(1) “local loop unbundling,” which means requiring the incumbent to physically open its facilities to new entrants, who then find new ways to provide services to end-customers; (2) “wholesale access,” which means requiring the incumbent to sell a wholesale broadband access product to all comers; and (3) encouraging other kinds of broadband access ("facilities-based competition"), which means helping new entrants have their own networks without having to deal with the incumbents at all.

3) Facilities based competition: Still waiting for that mythical third wire, or perhaps some unused, unlicensed TV spectrum, but not holding my breath. (Broadband over powerline? It is such an encumbered technology that it is its own barrier to entry.)

2) Wholesale access: Been there, tried that, but the Bells wouldn’t unbundled elements be sold at prices that’d let others play, litigating, legislating and lobbying until the last vestiges of wholesale access dribbled down the drain with the baby. Susan C says that unbundled elements a la 1996 Telecom Act was a local loop unbundling play, but I think it was an attempt at wholesale access.

1) Real local loop unbundling, a la Japan and Korea. Where it has been honestly implemented, it works. But, as Susan C points out,

It’s not easy: you have to find a way to give the incumbent enough of a return on its last-mile investments so that maintenance/upgrading continues, and you have to find a way to make that price low enough so that new market entrants are willing to take the plunge.

To summarize from the Bell view:
(3) If competitors arise, we can crush ‘em or buy ‘em. Except for cities, but if Earthlink can build muni networks, we can too and co-opt the whole movement.
(2) Wholesale access: we dodged that bullet and took away the gun.
(1) Our public relations efforts, especially the one about “owning our own networks,” has effectively taken real unbundling out of the dialog. Even the acronym for Wire and Cable Company (WACCO) sounds whacko.

For completeness, there are at least two other possibilities:

4) Trust the incumbents. That’s the current strategy. No further dignification needed.

5) Find new network architectures that do not have the barrier of high fixed costs. Mesh networks.

This has been a featured post from David Isenberg, Principal Prosultant(sm),, LLC. To visit the weblog maintained by David Isenberg click here.


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