Intel contends that our current high-speed holding pattern is the result of the regulatory climate—an environment that prohibits high-speed access providers from making infrastructure investments.

by Patricia Fusco ISP-Planet Managing Editor [October 3, 2001]

Now, why in the world would the world's largest chipmaker ballyhoo the benefits of broadband before telecom policymakers?

Peter K. Pitsch, Intel's Director of Communications Policy, led the charge on the FCC. He said the company's goal is to make a case for the many benefits of broadband access and that current regulations unnecessarily undermine high-speed service deployment across the country.

Deep sixed in 1996
"The FCC should make sweeping revisions to portions of the 1996 Telecommunications Act," Pitsch said. "The Commission should live up to the expectations set forth in Section 706(a) of the Act that requires the agency promote 'reasonable and timely' deployment of advanced telecom capabilities through a variety of regulatory tools."

Intel executives reckon that "advanced telecom capabilities" includes the ability to transmit and receive video content. This mode of data transport requires big bandwidth—transmission speeds in excess of 200 kbps in both upstream and downstream directions. Consequently, Intel believes the FCC should establish a national policy promoting broadband deployment in America.

Pitsch is not talking about your average consumer broadband connection—his comments before the Commission were not about legacy copper and coaxial broadband access—Pitsch's pitch concerns big bandwidth.

"To get from today's world where less than half of U.S. households can get DSL service to a world where 80 percent could get 1.5 Mbps will require that telephone companies deploy fiber and supporting broadband equipment worth tens of billions of dollars," Pitsch said. "Unregulated fiber overlay networks must be built to support regulated COs and local loops."

Slow times for fast access
Recent evidence suggests that the deployment of high-speed services in excess of 6 Mbps is slowing and that consumer demand for the current generation of broadband access is soft.

So what's holding broadband back?

Intel contends that our current high-speed holding pattern is the result of the regulatory climate—an environment that stymies infrastructure investment by high-speed access providers. Pitsch said that the only way the Commission can overcome current disincentives is to deregulate broadband access in the U.S.

"The regulatory environment is such that companies don't know whether to continue building broadband networks or not. They don't know which policy will be applied toward fiber optics," Pitsch said. "Will fiber be unbundled as a network element like copper or operated as a localized monopoly like cable? The business risks are too great under our current regulatory scheme."

"No one will invest in building this country's fiber infrastructure—the networks that the future of broadband depends on—until the FCC sets polity," Pitsch added. "The advice we gave to the Commission was deregulating it. We were well received, but these are informal discussions right now."

Fringe benefits
Intel argues that the benefits of broadband deregulation would be widespread—impacting significant markets including e-commerce, distance learning, telecommuting, medicine and entertainment. For example, if ubiquitous broadband access across the country improved the efficiency of the retailing/wholesale sector by three percent, the annual cumulative gains would be about $58 billion.

Similarly, if increased volumes of telecommuters hit the high-speed super highway rather than overloading major metropolitan freeway systems, millions would be saved. For instance, reducing rush hour traffic by one percent in Atlanta would save nearly $100 million in road repair and construction costs, according to Intel.

Pitsch said that whenever we collectively make big infrastructure changes the results are astonishing—far reaching, greater than anyone ever anticipated.

"When this country started building our highways, no one knew that the infrastructure would eventually support an entire industry like containerized trucking" Pitsch said. "We don't know all the benefits that broadband will bring just yet. But we beg policymakers that they not impede deploying our broadband infrastructure."

Speaking of benefits, you're probably wondering—what's in it for Intel? It's not like it chimes in on every big policy issue facing service providers across the U.S.

Intel's stake in 3G deployment is straightforward—its future is on the line—the future of selling faster processors to be built into bigger, better personal computers, servers, and other equipment made with Intel's processing components.

After all, it was one of Intel's founders, Dr. Gordon Moore, who first predicted that the number of transistors per integrated circuit would double every 18 months. Known as Moore's law, Intel's technology team strives to break down barriers that could the thwart its precious theorem. To Intel, FCC regulations constrain broadband-based businesses; therefore federal policymakers should deregulate the industry.

Can of worms
Intel asked that the Commission begin a comprehensive review of Section 706 rulemaking in order to review all regulations that apply to all types of broadband providers.

Of course, this is a bit risky because to open Section 706 for review means that "open access" provisions gained by a handful of independent ISPs securing competitive carriage over AOL-Time Warner's cable networks would also be re-evaluated. As would the line sharing order made to facilitate competitive DSL services and unbundling local loops for collocation.

But these regulations concern been-there, done-that, didn't-make-money broadband business propositions for the average Internet service provider. Fixed wireless broadband access remains the most viable solution for ISPs seeking last-mile high-speed delivery systems—and these are local solutions—at least until some WLANS-R-US-type company comes along.

As long as the cost of customer premise equipment (CPE) keeps coming down and antennas keep going up, the average ISP can find profits in providing fixed wireless access. Let the Commission start reviewing its broadband policy, especially if it helps free up more available airwaves for independent operators.

Taking stock
Technology has advanced to the point where voice meets video and the delivery of these sounds and the images can be over copper or coaxial lines, thin strands of glass or through the airwaves.

During tough times—make no mistake about it folks, these are trying economic times—a little self-evaluation is a good thing. Intel might be right. Maybe it's time for the Commission to take stock of its regulatory self and see what it can do to get broadband access deployed in the U.S.

I think we can all agree on one thing—whether it's regulatory enforcement or deregulatory relief—the FCC needs to do something. Regulating broadband by the type of delivery method is not working. It is not in anyone's best interest to continue supporting dysfunctional broadband rules and regulations.

Right now, what all we need is a little relief.

— End