Broadband Deployment Gets Mixed Reviews

The Federal Communications Commission
issued its second look at a nationwide survey of high-speed services in the

The report, issued late last week, concluded that 2.8 million subscribers utilized high-speed
Internet access and advanced telecom services at the end of last year. Of
those subscribers, 1.8 million of were classified as residential or small
business customers.

Federal regulators define advanced services as a mix of high-speed,
switched, broadband telecom access that enables users to originate and
receive high-quality voice, data, graphics, and video using any technology.
The second FCC report reflects a three-fold increase in the deployment of
advanced services from 1998.

The data in the report is based largely on the first systematic, nationwide
“Broadband Survey” of subscription to high-speed and advanced services,
initiated by the commission earlier this year.

In the first FCC report there were approximately 375,000 subscribers to
advanced services as of late 1998. This total consisted of 350,000
subscribers to cable modem services and at least 25,000 subscribers to
digital subscriber line access.

The penetration rate for advanced services more than tripled from 0.3
percent of U.S. households reporting at the end of 1998 to 1.0 percent at
the end of 1999. Of the 1.0 million subscribers to advanced services in the
FCC second look, approximately 875,000 subscribers used cable-based
services and approximately 115,000 had DSL access with the remaining
balance subscribed to other media.

Compared to the totals in the first report, cable companies increased their
subscriber base approximately three-fold and high-speed service providers
increased their DSL subscriber base approximately four-fold.

While the tally appears minuscule in comparison to basic phone and Internet
services, the Commission identified several demographic groups as being
potential victims of the so-called “Digital Divide,” a term utilized to
distinguish the broadband “have’s” from the “have-not’s.”

The Commission concluded that the deployment of advanced telecommunications
capability to all Americans is reasonable at this time, although it
identified certain groups of consumers that are particularly vulnerable to
not receiving advanced services in a timely manner.

At risk of missing the benefits of the broadband revolution if market
forces are left to prioritize the deployment of advanced services are rural
Americans, and inner city, low-income, minority and tribal area consumers.

In order to balance deployment of advanced services, the FCC said it would
review its rules to ensure that competitors can access remote terminals. Rhythms NetConnections, Inc. filed a complaint with the FCC earlier this year citing that
SBC Communication, Inc. $6 billion
“Project Pronto” DSL buildout would prohibit collocation of DSL services
because remote access terminals were not part of the Commission’s line
sharing order the unbundled network elements.

The Commission also said it would streamline the equipment approval process
for wireless and customer premise equipment with advanced
telecommunications capability. Additionally, the regulators said they would
consider making more spectrums available for the deliver of wireless
broadband services.

Funding for broadband deployment in the U.S. may tap into new extensions of
the Commission’s e-rate, which provides connectivity to schools, libraries,
and the public facilities.

Finally, the Commission indicated that it would initiate a proceeding on
the issue of whether to establish a national policy mandating access by
rival Internet service providers to a cable company’s platform.

Upon issuing the second FCC report, Chairman

William Kennard painted a rosy
review of U.S. broadband service deployment.

“We see some encouraging trends. Investment is strong, subscribership is
increasing, and facilities deployment grows at a rapid pace as competitors
race to meet demand,” Kennard said.

Kennard added that he was concerned about rural and low-income areas that
are much less likely to have access to advanced services.

“It is incumbent on us not to let these particularly vulnerable areas be
left behind in connecting all Americans to high speed services,” Kennard
said. “Thus, our report identifies these areas as in need of special focus.”

Commissioner Gloria Tristani said the report provided a baseline for
determining broadband growth in the future, but that the zip code data
utilized by the report was so general that it may have overstated the level
of deployment.

“While the Commission undertook new data collection efforts in preparation
for this second report on the deployment of advanced telecommunications
capability, the available data do not provide a full and accurate picture
of the state of deployment,” Tristani said.

“The data on which the report relies suffer from several weaknesses that
undermine our ability to draw well-supported conclusions and to identify
with specificity at-risk communities,” she added. “The Commission must
rectify this when we undertake data collection efforts in the future.”

Martin Machowsky, iAdvance executive
director, said the FCC report was gravely flawed.

“The Commission adopted a statistical accounting of the ‘availability’ of
high-speed services that may be based on a flawed or limited methodology,”
Machowsky said.

Machowsky added that the FCC should challenge telecom firms to do more and
give them the tools to make ubiquitous broadband services available
nationwide, not increase e-rate funding.

“The FCC failed to do what it should, outline an aggressive program to make
sure all Americans have access to the broadband Internet,” Machowsky said.
Congress empowered the Commission to act boldly to ensure that all
Americans have access to advanced telecommunications services. The
Commission has not taken up the charge.”

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