Accelerating Advanced
Broadband Deployment in the U.S.

Approved by the IEEE-USA Board of Directors
February 2003

The world today widely recognizes that rapidly deploying broadband telecommunications networks offers the potential to enhance a country's national productivity, homeland security and international competitiveness. Yet, compared to the efforts of several other countries, the pace of broadband deployment in the US has been slow. Truly scalable (gigabit) broadband networks are not being seriously considered at policy levels, much less rapidly deployed in the U.S.

In response to this situation, the IEEE-USA held a Workshop in June 2002 with the objective to explicitly include Ethernet networks over fiber infrastructures capable of supporting gigabit speeds in the U.S. policy debate on accelerating broadband deployment and thereby fills the gap among technologies that are already included in the national debate, e.g., DSL, Cable-modem, and aspects of wireless. Elsewhere in the IEEE, there is standards expertise that can contribute to this debate.

The workshop, combined with subsequent discussions and analyses by technology, policy and economics experts, established that the potential exists for accelerating broadband deployment through Ethernet networks over fiber infrastructures capable of gigabit speeds especially as they are complemented by compatible wireless technologies. Of the several technology options studied, we judge this combination to be among the strongest candidates for immediate and rapid deployment of advanced broadband networks.  Accordingly, the IEEE-USA recommends:

1. Policymakers must ensure that Ethernet networks over fiber infrastructures capable of gigabit speeds complemented by broadband wireless technologies be fully considered and fairly evaluated for a prominent role in accelerating advanced broadband deployment in the U.S.
   
2. Government policies at the Federal Communications Commission, Department of Justice, and Federal Trade Commission, as well as at state and local regulatory and enforcement agencies throughout the U.S, must be established, and actions must be taken to ensure that Ethernet networks over fiber infrastructures capable of gigabit speeds, together with complementary broadband wireless networks, are given a fair marketplace opportunity to prove themselves on their merits as contributors to enhancing the country's national productivity, homeland security and international competitiveness. This will require that possible, non-market, anticompetitive blocking actions by rivals be foreclosed.

Discussion

Such secure networks are already being deployed by owner-users that range in size from Fortune 100 firms to small businesses, to rural, municipality-led owner-groups acting for their mutual benefit. The networks provide dedicated symmetric connectivity at speeds that can reach gigabits per second (up to tens of billions of bits each direction) on wavelengths over a single fiber, as compared to the bare megabit (million-bit) asymmetric (faster downstream than upstream) connectivity currently offered by incumbent network owner-suppliers of digital subscriber line (DSL) or cable-modem services. Providing networks with such high bandwidth greatly facilitates convergence of data, voice and video through a single network connection to the end-user that, in turn, permits access to content, applications and services (CAS) from multiple suppliers. The infrastructure for such a network can be built using products that are "plug and play" (i.e., interoperable and interchangeable) from multiple manufacturers. As a result, such products are highly competitive, surprisingly cost effective, and increasingly available today.

An entity that deploys an Ethernet network over a fiber infrastructure capable of gigabit speeds that it owns/controls for its own use, operates under a new paradigm that results in many benefits. The new paradigm includes:

• Opening the network infrastructure to a wide range of potential CAS providers permitting end-users to select from the competing CAS offerings based on the respective price and merits of each. Competition at this level can provide end-users with: increased choice, enhanced quality, as well as lower prices on CAS offerings.
• Providing sufficient bandwidth to drive the incremental cost (marginal cost) of using the network to approximately zero, and passing on this benefit to internal network end-users at a price of zero for such incremental use. This price applies to uses that specifically include transport of CAS supplied by CAS vendors to end-users, and to transport of "peering" traffic from other networks.
• Paying for the infrastructure deployed to support the network out of combined savings to end-users from tariffs no longer paid to legacy telecom providers and from lower prices paid to CAS providers. Often these savings can more than compensate for the costs of deploying the infrastructure in the first place.
• Permitting an organization that is not large enough, alone, to deploy such a network for its own use, nonetheless to share in its benefits. / It can do this by joining with others in an integrated incentive structure to own/control an Ethernet network over a fiber infrastructure capable of gigabit speeds for mutual benefit, coordinated by a neutral entity such as a municipality or other not-for-profit organization.
• Obviating potential negative impacts from the natural monopoly condition inherent in networks including a network deployed as suggested above -- because natural monopoly poses no problem in such a network owned/controlled by an entity for its own use. (One does not exploit oneself.)

On the other hand, the owner of an Ethernet network over a fiber infrastructure may offer the network for use by others. In doing so it may seek to exploit the network's natural monopoly potential and compound it into a vertical monopoly by providing to "captive" end-users, under non-competitive prices and conditions, CAS that it owns/controls. This can occur especially in regions that are likely to be chronically underserved. Such a possibility can be foreclosed, however, by regulations requiring that when supplying its network to others, each such network-supplier act only as a carrier of CAS, i.e., that it be prohibited from exercising vertical market power by providing to client-end-users CAS that it owns/controls.

Conclusions

The endeavor of the workshop established that the resources required for accelerating US broadband deployment exist in the form of Ethernet networks over fiber infrastructures capable of gigabit speeds that greatly facilitate convergence of data, voice and video through a single connection; support early, rapid growth; and offer the high likelihood of meeting future user requirements - even those as yet unforeseen. Operating such networks and providing CAS over them are matters that are well understood.

The workshop also arrived at the important conclusion that such networks represent an inherently disruptive innovation. Their deployment is, therefore, having and is likely to continue to have direct impact on the business models of current telecom providers. Rapid, wide deployment of these networks could well lead to a tumultuous transition period as the functioning of a competitive market drives the price of services offered over the networks of incumbents to their marginal costs.

Although Ethernet networks over fiber infrastructures capable of gigabit speeds are already being deployed by leading-edge end-users in the private and public sectors throughout North America and abroad, at this early stage in the U.S., such networks are vulnerable to being blocked through non-market, anti-competitive tactics of rivals. The tradeoffs between the costs to the economy of such an interference with market forces, as compared to those from the stresses of a possible, rapid transition to a disruptive technology in response to market forces, demand careful monitoring, penetrating analysis, and levelheaded, steady stewardship - in the context of creative leadership.

As a nation, we must ensure that the recommendations above are addressed on a timely basis. Our national productivity, homeland security, and international competitiveness may well depend on it.

This statement was developed by the IEEE-USA's Committee on Communications Policy and represents the considered judgment of a group of U.S. IEEE members with expertise in the subject field. IEEE-USA is an organizational unit of The Institute of Electrical and Electronics Engineers, Inc., created in 1973 to promote the careers and public-policy interests of the more than 235,000 electrical, electronics, computer and software engineers who are U.S. members of the IEEE.

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