Broadband Access Platforms for the Mass Market an Assessment

This paper qualitatively analyzes the suitability of different broadband access platforms to provide intermodal competition for the services provided today by the incumbent telephone operators, cable operators, and satellite operators with a particular focus on the provision of high speed internet access. As a baseline, the paper also presents the quantitative incremental economics for cable companies and telephone companies to provide high speed Internet access as a baseline. This paper is based on the analysis done by FCC Technology Advisory Council’s Broadband Access Working Group, which the author chaired as well as updated economics derived from the JP Morgan McKinsey Broadband 2001 report. The approach is to define the services that compete for the consumer’s dollar, examine the key economic factors that drive deployment economics, and then analyze the suitability of different platforms to deliver the services. Nine different new technology platforms that are capable now, or will be capable in the near future, of delivering most of the services considered are compared with the baseline of today’s cable and telephony. The suitability of delivering these services over the new platforms is a function of technical feasibility, state of development and deployment, and ability to compete with the economics of the existing alternatives. The conclusion is that any new technology platform will be quite challenged in most markets to compete with the cable operators and incumbent telephone companies for the delivery of high-speed Internet access either on a stand-alone basis or in conjunction with other services. Among the alternative technologies to cable and DSL, terrestrial wireless using either licensed spectrum below 5 GHz or unlicensed spectrum represents the best possibility. Even service providers using these technologies will be challenged to compete broadly for high speed Internet access. Customer acquisition and service and other non-technology costs are considerably greater than the technology costs. Therefore scale and the ability to offer new services on an incremental basis to existing services confer a distinct advantage to incumbents