Competition most important tool to increase broadband deployment

[David Farber <dave () farber net>]

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: January 29, 2009 11:20:55 AM EST
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] Competition most important tool to increase  
broadband deployment

[Note:  This item comes from Bill St. Arnaud's list.  DLH]

From: "Bill St. Arnaud" <bill.st.arnaud () canarie ca>
Date: January 29, 2009 7:48:26 AM PST
Subject: [CAnet - news] Competition most important tool to increase  
broadband deployment

For more information on this item please visit my blog at
http://green-broadband.blogspot.com/ or http://billstarnaud.blogspot.com
-------------------------------------------

[Here are a couple of good pointers on why competition may be the most  
important tool to increase broadband deployment. As far back as August  
1993 in an article in Scientific American, it was noted that  
competition was the main driver for the rate of adoption of many  
technologies from basic telephony to the PC computer. In that article  
they compared the rate of adoption of the telephone versus cable, VCR,  
PC etc. The telephone took over 75 years to reach 50% penetration,  
while cable TV took 35 years and the PC and VCR less than 15 years.   
There was a clear correlation between the average cost as expressed in  
per capita income of these technologies and their rate of adoption.   
And of course what drove down cost was competition. Where there was  
lots of competition – PC and VCR, prices dropped and adoption rates  
skyrocketed. Where there was no competition, as in the case of  
telephone monopoly, prices and adoption declined very slowly.   
Excerpts from Scott Bradner’s column and posting by Dirk van der Woude  
on Gordon Cooks excellent Arch-Econ list – BSA]

<http://www.networkworld.com/columnists/2009/012709-bradner.html?fsrc=rss-columns 
>

Obama's broadband stimulus: throwing money at wrong target?

[…]

The Pew Internet & American Life Project just published the results of  
two surveys on Internet connectivity it ran over the last year. This  
report shows that not all that many people are blocked from getting  
broadband Internet access because it is not available in their area.  
There is no question that there are big parts of the country where  
broadband access cannot be obtained unless you are willing to use a  
satellite service. It is hard to tell in how much of the country this  
is true because of the poor statistics the FCC has been collecting.  
(See "All's well with U.S. broadband deployment (says FCC).")

The Pew report says that some people (more than 15%) have no interest  
in getting online. Another 6% think the price is too high, and 5% have  
usability problems. The president's plan is unlikely to change these  
numbers much.

The current draft of the broadband part of the stimulus package  
focuses on providing grants to companies that are willing to deploy  
wireless or wired broadband in underserved areas. The bill mandates  
open access to any services that result from such grants.

But, if the Pew report is correct, the stimulus money and open access  
policies might only result in a few percent of additional broadband  
users in the United States. Figuring out how to get more competition  
into the picture so that prices could come down might yield a greater  
return.

[…].

[From posting by Dirk van der Woude]

ECTA, the European Competitive Telecommunications Association,  
yesterday released the latest installement of its regulatory score  
card. Good reading and below an interesting quote (pag 12). (Hat tip  
to 'you know who you are').

"It may be tentatively concluded from these and other results found by  
analysing data reported in the Scorecard together with July 2008  
broadband data reported by the European Commission and OECD that  
infrastructure and effective access-based competition may complement  
each other in stimulating high broadband take-up rates, and take-up of  
higher speed services – both of which are necessary to justify and  
reduce risks in investments in access upgrades such as FTTH.

The positive relationship between incumbent retail DSL lines and LLU  
also suggests that the benefits of access regulation through  
increasing overall take-up of broadband may also enable the incumbent  
to increase its own take-up rates. Although data is not yet available  
to assess the effects quantitatively, one might also postulate,  
following similar logic to unbundling of copper loops, that the take- 
up of fibre access and higher speed services available over it could  
be stimulated through unbundling and that such expansion and  
competition could also facilitate increased demand for the incumbents  
own fibre services."

Whole report: <http://www.ectaportal.com/en/basic651.html>
RSS Feed: <http://www.warpspeed.com/wordpress>




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