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The broadband deployment effort involves infrastructure; shortly after the service announcement, ILECs issue RFPs and RFQs for DSLAMs, optical extension hardware, DSL modems, and begin to jockey for content alliances since DSL provides the necessary bandwidth for television signal delivery in addition to voice and high-speed data. Customers, meanwhile, excited by the prospect of higher-speed access and all that it will bring them in the way of enhanced capability, buy upgraded PCs and broadband service packages. Hardware manufacturers and service providers applaud the evolution because they know that the typical broadband user generates 13 times the traffic volume that a dial-up user generates, and while service providers rarely charge by the transported megabyte, the increased traffic volume requires capability upgrades to the network CAPEX, in other words. Meanwhile, software manufacturers, mobile appliance makers, and content owners scramble to develop products for wireline and wireless broadband delivery. Upgrades occur; innovation happens; prices come down. Cable and wireless players march along with their own parallel efforts and soon this great, dynamic money engine known as the telecom industry starts to turn again, slowly at first but building rapidly as it feeds on its own self-generated fuel. And that is the ultimate end state a self-perpetuating industry that evolves and changes in concert with market demand, sustained by a forward-thinking, reasonable regulatory environment. What this boils down to is Michael Powell s ultimate goal: to force the industry at large to become facilities-based. The fact is that the local loop is a natural monopoly there s no getting around that. The UNE rules are basically unnatural and simply don t work as well as they were envisioned. Want to compete with the incumbent service providers Use a different technology, like cable, or broadband wireless. Clearly this strategy is working in the cable industry s favor.
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On May 12, 2003, the FCC commissioners were presented with a proposal to modify the existing rules that govern media ownership. On the surface, this does not appear to affect the technology sector per se, but in fact it potentially has a significant impact because of a blurring of the lines between the sectors. Under the terms of the proposal, ownership of broadcast rights could change dramatically. Among the changes are the following.
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Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website.
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The proposal plans to allow a single company to own television stations that reach as many as 45 percent of U.S. households, today capped at 35 percent. Needless to say, the major networks are in favor of eliminating the existing 35 percent cap. This decision would favor companies like News Corporation (the owner of Fox) and Viacom (the owner of CBS and UPN), which are already in violation of the 35 percent limit because of merger and acquisition activity that put them (slightly) over the top. There are some inviolable restrictions to the decision: The four major networks (CBS, NBC, ABC, and Fox) are prohibited from merging, and ownership of more than eight broadcasting stations in a single market remains prohibited. Two cross-ownership rules are under scrutiny and proposals to modify them are included in the proposal. One prevents a company from owning a newspaper and a radio or television station in the same city; the other limits ownership of both radio and television stations in the same market. Under the terms of the proposal, these two rules would be combined into a single rule that eliminates most of the existing restrictions. Cross-ownership would be allowed in large and medium-size markets, but would be restricted or perhaps even banned in smaller markets. Under the terms of federal communications law, the FCC is required to consider reasonable changes to the rules it oversees that affect the communications marketplace and the public it serves. Since some of
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Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website.
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