Agreat failing of the much-praised Telecommunications Act of 1996 is its silence on the nature of "broadband" communications. The silence is more than awkward. It is a restraint on progress that allows purveyors of very-low-speed technology to market their products as "broadband."
The term was undefined until the Federal Communications Commission issued a report in January 1999 on its "Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans." The commission concluded that "broadband" is bidirectional communications where the upstream and downstream paths have speeds of at least 200 kbits/sec. But this hurdle is not low enough for the DSL industry. The U.S. House and Senate have four bills pending where broadband is defined in terms of unidirectional communications or in asymmetric speeds where one speed is below 200 kbits/sec (see Lightwave, July 1999, page 14 and September 1999, page 14). In February 2000, the FCC initiated another "Inquiry Concerning...." The agency asked for "comment on our existing definition, whether it should be changed and, if so, how."
There was an industry consensus that the FCC's second inquiry was a low-energy effort aimed at maintaining the status quo. Only 52 comments were filed with the agency, far less than the 102 responses filed in the first inquiry. The FCC's second report is not yet public, but if it defaults to the status quo, the commission will find itself out of step with two bills providing funding for broadband services in rural America: The Rural Broadband Enhance ment Act and the Rural Telecommunica tions Moderniza tion Act.
Each bill defines broadband in a similar way. Senate bill S2321, the Modernization Act, defines broadband as "transmitting voice and downloading data at a rate of 1.5 Mbits/sec and uploading data at a rate of 0.5 Mbit/sec." The bill defines a new concept, "enhanced broadband," as "transmitting voice and downloading and uploading data at a rate of 10 Mbits/sec."
Although the bills allow funding for DSL multiplexers, the definitions clearly stretch and break the limits of DSL technology. The Enhancement Act, Senate bill S2307, defines broadband in the same terms but has more expansive language: broadband service "enables users to originate and receive high-quality voice, data, graphics, and video telecommunications." The bill includes specific language meant to prod the FCC from its current definition: "The Commission shall, from time-to-time as circumstances warrant, revise the rate-of-data-transmission criteria...upward to reflect technological advances, and the criteria, as so revised, shall be applied."
The Enhancement Act falls into the category of "directive" legislation because it specifically orders the FCC to action and restricts the commission's discretion. With regard to rural telecommunications services, the FCC can never redefine broadband in speeds lower than those stated in the bill and must revise upward when the evidence is compelling. S2307 has a companion bill in the House, HR4122.
If the Enhancement and Modernization bills were to become law, then two major issues would arise regarding broadband services: Rural areas would be getting better service than urban areas, and in rural areas, DSL-lite and ADSL services would not be broadband for more than a few years. This scenario would quickly lead to the question, if ADSL is not "broadband" in rural areas, how can it be broadband in urban areas?
Add to this scenario a corporate tax credit for investments in fiber optics and VDSL equipment used in metropolitan and local distribution networks (including the local loop). Such a tax bill is being considered by Sen. Moynihan, (D-NY), the top-ranking Democrat on the Senate Finance Committee, and may soon be offered in the full Senate.
Couple the tax credit with periodic redefinitions of "broadband" and the result may be a rush of new construction in metropolitan and local networks that quickly antiquate lower-speed DSL services, the expected source for the bulk of DSL revenues. Therein lies the danger. The tax-credit proposal is sure to be opposed by incumbent telephone companies and by the "wireless-loop" factions. The Enhancement and Modernization bills' limited focus on rural service may save them, but their success means ordinary rural consumers enjoying superior telecom services. The rural-urban disparity would be a long-term irritant to industry and the FCC. Both bills may be watered down as a price to become law.
Taken as a whole, the three bills and the proposed tax credit are significant. For the first time, a congressional coalition recognizes the need for speed and offers appropriate legislation that avoids endorsing DSL technology. Even more unexpected, the sponsors are mainly Democrats. S2307 is sponsored by Sens. Dorgan (D-ND), Daschle (D-SD), Johnson (D-SD), Baucus (D-MT), and Harkin (D-IA). HR4122 is sponsored Reps. Stupak (D-MI) and Pomeroy (D-ND). S2321 is sponsored by Sens. Rockefeller (D-WV) and Snowe (R-ME).
This political lineup contrasts with the sponsors of bills introduced last year to promote DSL markets: HR1685, HR1686, HR2420, S877, and S1043. The initial sponsors of these bills, in order, are Reps. Goodlatte (R-VA), Boucher (D-VA), Tauzin (R-LA), and Dingell (D-MI) and Sens. Brownback (R-KS) and McCain (R-AZ). There is not a perfect match between political affiliation and sponsorship, but the legislative history suggests that DSL technology finds its congressional support chiefly among Republicans, while higher-speed technology finds its support mostly among Democrats.
S2307, HR4122, S2321, and Sen. Moynihan's in-progress tax bill collectively represent a rejection of arguments that high-speed networks to homes and offices are a waste. Congress heard the "waste" argument again in June 1999 when Russell Daggatt, vice chairman of Teledesic, told the House Subcommittee on Telecommunications, "In the connections to most individual offices and homes, most of the capacity of a fiber connection would sit idle most of the time...Nor are the increases in the capabilities of fiber of much relevance-even on a neighborhood level, the capacity of the fiber is not the limiting factor in the economics of its deployment." But S2307's directive to the FCC to revise upward the definition of broadband is a clear dismissal of Daggatt's reasoning, whether it is applied to fiber, VDSL, or coaxial networks offering the "enhanced broadband" services defined in S2321.
However, these events do not mean the end of opposition to genuinely high-speed networks to homes and offices. In April 2000, the House Subcommittee on Telecommunications had a hearing on the "Status of Deployment of Broadband Technologies." Among the witnesses was the vice president of EMusic.com, Peter Harter, who trashed fiber but exalted DSL. "Ten years ago the telephone companies were all abuzz about 'fiber to the home'...Like many false starts...that one turned out to be a clear dead-end," he testified. "But now, DSL services...from the Bells to Covad...are build ing a new Internet infrastructure that will provide a platform for new Internet content."
EMusic.com sells music over the Internet and wants an improved platform to distribute content. Given that goal, why the company dismissed fiber as a viable platform is a puzzle. But the most likely reason lies in Harter's role as a member of the board for the Progress and Freedom Foundation (PFF), an ideological think-tank often aligned with the interests of incumbent telephone companies. The PFF supports HR2420 (see Lightwave, September 1999, page 14), and in 1999, its president spoke to the National Governor's Association touting DSL technology. The PFF says it is currently "conducting a major project aimed at identifying public policies to limit government interference in the market for digital broadband networks."
That the PFF's views would manifest themselves in congressional hearings about broadband technology is an unfortunate demonstration of technical issues and politics being intertwined. It is lamentable, but if the "need-for-speed" efforts gain visibility this summer, then expect the PFF to denounce them as distortions of broadband markets. This would indicate the efforts are gaining momentum, a sign of real progress.
Stephen N. Brown writes on public policy in telecommunications. He can be contacted by e-mail at [email protected] or telephone: (615) 399-1239.