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Tech Industry

Broadband and narrow thinking

IPI Director Bartlett Cleland warns that if government fails to limit the use of its regulatory hammer, the future growth of the broadband industry will be put in jeopardy.

    Legislators have a predisposition to regulate. They prove the adage: When all a person has is a hammer, all problems look like nails.

    In the case of broadband deployment, the "problem" is the continuation of robust development of the Internet and related technologies; policy-makers are standing by with their legislative hammers to "fix" the problem.

    Broadband, according to the Federal Communications Commission, is a "descriptive term for evolving digital technologies that provide consumers a signal-switched facility offering integrated access to voice, high-speed data service, video-demand services, and interactive-delivery services." Translation: Broadband is a technology that allows people to send all types of data through high-speed, "always on" Internet connections.

    Broadband allows our imaginations to be the limit of our ability. It allows for Internet telephony, digitally delivered television and movies, interactive distance education, electronic home doctor visits, home monitoring, and more. With the technology's expansion, these activities will be a pedestrian--yet robust--reality.

    But if broadband doesn't flourish, neither will these more exciting applications for video. In fact, without the expansion of broadband, whole new industries based on a more advanced Internet will be stymied and the continued development of our high-tech and computer industries will be slowed.

    In simple economic terms, without an adequate supply of broadband, real demand for other cutting-edge technologies will never develop.

    In simple economic terms, without an adequate supply of broadband, real demand for other cutting-edge technologies will never develop.
    Policy-makers at the federal and state level, however, seemingly want to block broadband's advance by fitting this new and powerful technology with the same yoke of old regulations that govern the telecommunications industry's "narrowband" technology, or voice services. This attitude predominates even when the promise of broadband has been hailed by some as the answer to the economic slump.

    The two are clearly different, however, and the actions of these legislators are narrow-minded.

    In fact, the FCC found in analyzing the AOL-Time Warner merger that "residential high-speed Internet service constitutes a discrete market that must be considered separate from the residential narrowband market." Without stretching the imagination, one understands that today cell phone usage, "voice-over-IP" (VoIP), the rampant use of instant messaging and similar services are definitely competition to the traditional use of the telephone.

    The broadband market today is in a similar position to the cellular industry more than 10 years ago: growing without regulation. Already, more than 5.5 million people in the United States access the Internet with high-speed cable modems, and another 2.3 million have DSL (digital subscriber line) technology for high-speed Internet access. Allowing the market to continue to grow by adopting a long-term deregulatory posture would allow telecommunications companies to provide interested users with DSL technologies at a more rapid pace, hopefully with the same results as deregulation of the cellular industry--more consumers access technology for less money.

    The broadband market today is in a similar position to the cellular industry more than 10 years ago: growing without regulation.
    The realities of diverse competition and the lesson of the cellular market show that policy-makers at all levels should treat broadband as a unique technology market. If telecommunications companies want to build robust facilities to deploy broadband in areas that have been underserved by the best technologies, they should not be burdened with outdated telecommunications regulations that force sharing of those facilities.

    When they are forced by the government to allow others to profit from their financial risk, telecommunications companies lose their motivation to build facilities in these underserved areas. Negative effects heavily impact people who are then without a means to access the best technologies. More to the point, antiquated policies provide a disincentive to technological advancement, while modern, deregulatory policies do the opposite.

    Technological progress of the last several years has moved beyond even the best efforts at regulation. The notion that the only competition for traditional voice communication is similarly delivered voice communication is wrong.

    The schemes of the past are a hindrance to real competition and growth. To provide a means to stimulate the economy and to revive the tech industry, lawmakers should resist their regulatory urges, lay down their regulatory hammers, and watch the resulting productivity.