The President and Vice President want to ensure that all Americans have access to the benefits of the information superhighway. The Act ensures that schools, libraries, hospitals and clinics have access to advanced telecommunications services, and calls for them to be connected to the information superhighway by the year It will help connect every school child in every classroom in America to the information superhighway -- opening up worlds of knowledge and opportunities in rural and low-income areas.
Because President Clinton and Vice President Gore believe strongly that families should be able to exercise control over how the media influences their children, the Act includes a provision calling for a computer chip, called the V-Chip, to be installed in every new television set.
This provision is critical to give parents control of the television programming that comes into their homes by allowing them to block electronically violent or other objectional material.
Because President Clinton and Vice President Gore believe that diversity of voices and viewpoints is critical to our democracy, the Act will prevent undue concentration of television and radio ownership. The Act limits the number of stations one entity can own to stations that reach up to 35 percent of all national TV viewers, and keeps existing rules that forbid one.
The Act also maintains the ownership ban of a cable company and a broadcast company in the same market. The President and Vice President believe that when the walls of regulations are brought down, prices come down for American consumers. The broadband network providers have argued that they should not be subject to access regulation because they face strong market incentives not to restrict the access of independent applications providers to their networks. They cite the existence of indirect network efficiencies, which reward network providers for keeping their network open, and the availability to most Americans of at least two broadband networks.
They argue that any access regulation would cause harm, by curtailing their ability to vertically integrate to exploit efficiencies such as ensuring quality of service levels needed for video and voice services. They also claim that they remain subject to the antitrust laws, which would constrain them from undertaking any anticompetitive activities that are harmful to consumers.
These arguments have been subject to a number of attacks. Critics have pointed to the widespread, documented usage restrictions that network providers have placed on end users, which the critics claim have harmed consumers, for example, by denying access to virtual private networks needed for telecommuting. Critics claim that these usage prohibitions are far more restrictive than needed to manage bandwidth, and often are imposed for strategic purposes, not for network efficiency reasons.
They also claim that not regulating access will harm innovation by giving the broadband network providers the ability to strategically constrain independent applications.
Former FCC chairman Michael Powell has suggested that it might not be necessary to impose regulations if the industry were to agree to follow certain "Internet Freedom" principles as the basis for self-regulation. Powell has constructed guiding principles, 83 noting that:.
Promoting competition among high-speed Internet platforms is only half of our task, however. We must ensure that the various capabilities of these technologies are not used in a way that could stunt the growth of the economy, innovation and consumer empowerment. Thus, we must expand our focus beyond broadband networks—the so-called "physical layer" of the Internet's layered architecture. Referring explicitly to the research and analyses performed by Professors Weiser, Farrell, and Wu, cited earlier, Mr.
Powell explained that there are circumstances in which broadband network providers might choose to restrict usage on their network, and that some troubling restrictions have appeared in broadband service plan agreements. But he stated that he did not believe that there was yet a case for government imposed regulations regarding the use or provision of broadband content, applications, and devices. Instead, he challenged the industry to avoid future regulation by embracing what he called the four Internet Freedoms.
These are:. In presenting these principles, Mr. Powell indicated that broadband network providers have a legitimate need to manage their networks and ensure a quality experience; thus reasonable limits sometimes must be placed on service contracts. Such constraints, however, should be clearly spelled out and should be as minimal as necessary. Since no one can know for sure which "killer" applications will emerge to drive deployment of the next generation high-speed technologies, the industry must let the market work and allow consumers to run applications and attach devices unless they exceed service plan limitations or harm the provider's network.
The broadband network providers have not explicitly opposed Mr. Powell's proposal; nor have they explicitly endorsed it. Powell's proposal. It ruled that DBS service, like cable modem service, is an information service and therefore not subject to any of the access requirements in Title II of the Communications Act. It also adopted a non-binding policy statement consisting of four principles: consumers are entitled to access the lawful Internet content of their choice; consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; consumers are entitled to connect their choice of legal devices that do not harm the network; and, consumers are entitled to competition among network providers, application and service providers, and content providers.
Critics have challenged Mr. Powell's proposal—and, by extension, the FCC's August 5, , order and policy statement—on several grounds. They point to the many documented instances of usage restrictions placed on end users as proof that, left unregulated, market forces are not robust enough to ensure unrestricted access.
They argue that the search for the killer application that might drive investment in both infrastructure and applications is more likely to be successful in a regulatory regime that fosters network neutrality than in a regime that allows the few broadband network providers to determine the direction of the network.
They argue that it is impossible to undo harm after it has occurred and that, in light of the identifiable reasons why network providers might have both the incentive and the ability to restrict access, it is dangerous to move forward based on non-mandatory principles that the network providers have not, in any case, endorsed.
Critics also claim that antitrust laws, which generically address monopoly behavior and anticompetitive practices, are inefficient vehicles for addressing the impediments to competition and innovation that are most common in communications markets. These critics argue that there is abundant empirical evidence that there are greater opportunities for firms to erect barriers to entry in "network" markets than in traditional markets and that as a result relying primarily on ex post antitrust enforcement leaves consumers subject to unnecessary risk.
They also oppose elimination of the public interest standard. Currently, in most locations, the incumbent local exchange carrier "ILEC" and the local cable company are the only broadband network providers serving the mass market. Wireless including satellite carriers, cable overbuilders, or power companies may provide a relatively ubiquitous third broadband connection some time down the road, but in the next few years are likely to offer mass market customers a competitive option in scattered locations at most.
Nor have the ILECs demonstrated tangible plans to extend their broadband networks beyond their current service areas to compete head-on with other ILEC broadband providers.
It appears that the competition that is developing between telephone and cable providers is taking the form of "triple play" offerings of voice, data, and video services. At present and in the near future, some telephone companies will bundle re-sold satellite video services with their voice and DSL services to compete with cable companies' triple play. But the largest ILECs and even many small rural carriers have begun to upgrade their networks to have the bandwidth capacity to offer video services themselves.
A key will be to offer a broadband connection with sufficient bandwidth to accommodate whatever service becomes the killer application, or at least an important application. As explained earlier, these broadband networks actually consist of two parts: the last-mile local network privately owned and operated by the broadband network provider and the inter-network that is jointly operated by multiple Internet backbone providers.
Success for any broadband network provider will depend on the bandwidth, security, and service quality it can ensure over its local network. Although currently all ubiquitous broadband networks provide hard wires into the customer premise, the various network providers are each deploying unique network architectures. Most of the large cable companies have upgraded their coaxial cable networks and now are offering video, data, and voice services in many areas of the country, especially in urban areas.
Their cables into customers' premises often have sufficient bandwidth to "broadcast" to customers' premises hundreds of video channels for the customers to choose among and their set-top boxes allow customers to select video on demand, although the video choices available at any particular point in time may be limited.
Currently deployed cable modem technology, however, requires clustered customers to share bandwidth capacity, so that connection speeds fall as more neighbors use the network. This requires a truck roll to physically replace the copper with fiber. But that fiber has such high capacity that it is likely to allow Verizon to bring as much or more bandwidth to the home as cable systems, thus allowing Verizon to simultaneously "broadcast" a large number of video channels and offer video on demand.
At the customer premise, the viewer will use the remote control to the set-top box to choose the channel to be watched at any point in time, just as is done for cable service today. Also like cable, the signals for premium channels will be "broadcast" in coded form, and households that do not subscribe to particular premium channels will not be able to decode the signals. Verizon will use a particular wavelength on their fiber to implement QAM, a cable protocol used as a transport mechanism.
This architecture appears to be consistent with the definitions of "cable service" and "cable system" in Section of the Communications Act. Instead, to make sure there is sufficient bandwidth between the neighborhood node where the optical fiber terminates and the household premise, it will upgrade the DSL equipment currently at those nodes and in households with VDSL technology.
That signal will be sent over the same bandwidth used for data and VoIP service. Telephone wires currently enter the house and then the inside wiring goes to the various telephones. But television sets may not be located near the telephones. It may be that only those homes within a couple of thousand feet of the neighborhood node will be able to be fully served. On the other hand, Verizon's choice of deploying optical fiber all the way to the home, which requires a very large investment in optical cable, labor-intensive truck rolls, and in some cases digging up of land to replace the copper with optical cable, will be far more expensive per household served and thus may be constrained both by limits on Verizon's capital budget and by customer resistance to digging up their yards to lay fiber.
Some observers have questioned whether Verizon's fiber to the home approach can prove out financially, even as they concede that the huge bandwidth provided could give it a leg up in the long run.
Fiber to the home technology does not incorporate line powering, so Verizon might have to provision the optical interface at its customers' premises with back-up batteries. But even then, the batteries would probably last at most 8 to 16 hours, less time than might be needed in case of natural disruptions such as hurricanes.
In both cases, customers might have to rely on wireless telephone service during time of electric power loss. The marketplace will determine which of these network strengths and weaknesses are most important to end users.
These architectural differences, in addition to creating competing platforms for triple play service, offer platform diversity to independent applications providers. Where the competing networks have distinct characteristics that better meet the needs of some sets of applications and are less effective for other sets of applications, applications providers are not constrained in their product development to the characteristics of a single platform.
Thus, competing distinct broadband networks fosters applications innovation. To the extent such advantage would artificially raise the relative costs or otherwise harm competing broadband network providers, or otherwise weaken them, then their ability to foster innovation by providing a unique alternative broadband platform could be undermined.
Verizon has agreed that it is subject to franchise requirements, but argues that a streamlined statewide or nationwide franchising process is needed because the extremely time consuming process of negotiating literally thousands of individual franchise agreements could slow down its entry into video by years and could endanger its planned upgrade to a broadband network.
For example:. In the debate among proponents of the various approaches to regulation of broadband networks—structural requirements, ex ante non-discrimination rules, ex post adjudication of abuses, and reliance on antitrust law and non-binding principles—the only point of agreement is that end users would benefit, and the need for regulation might be reduced, if customers had more than two broadband networks to choose among.
In almost all geographic markets today, however, the mass market broadband market structure is characterized by duopoly provision of broadband network services cable modem service from the local cable system or DSL service from the local telephone company , plus competition among independent applications service providers and the two vertically integrated broadband network providers for the provision of broadband applications services. Most parties agree that the dynamics in both the network market and the applications market would likely change if there were three or more widely available broadband network options.
For example, as discussed earlier, network providers face countervailing incentives. On one hand, due to indirect network externalities, they have the incentive to minimize restrictions on independent applications providers' access to their networks. On the other hand, they sometimes have the incentive to restrict such access when to do so would yield them first-in advantages or other strategic advantages in the applications market or would aid in their ability to bolster profits through price discrimination.
Given the high sunk up-front costs and initially low scale economies, however, a new entrant is less likely to be able to provide strong price competition, even if its underlying cost structure when operating closer to capacity were lower than that of the incumbents.
Also, if the new entrant can succeed in gaining end-user customers—and thus also independent applications provider customers—primarily because of its nomadic, portable, or mobile feature, it may have the same market incentives as any other network provider enjoying its middle position in a two-sided market.
Once the new entrant has acquired end-user customers, independent applications providers may have no choice but to interconnect with the new entrant's broadband network at terms, conditions, and rates over which they have little or no leverage, with possible harmful implications for competition in the applications market. Thus, it is not certain whether entry by a third network provider would eliminate the need for regulation.
Still, entry by a third broadband network provider could threaten the profits of incumbent wireline and cable broadband network providers to the extent they lose customers to the entrant and to the extent a third network reduces their negotiating strength vis-a-vis independent applications providers and end users.
The incumbent network providers might benefit, however, if such entry justified the easing of regulatory requirements. The incumbents have argued that regulation of their networks inevitably introduces inefficiencies, distortions, and unnecessary costs. If entry of a third broadband network created market forces that decreased both the perceived and the actual need for regulation of the broadband networks, and if such regulation did indeed impose those inefficiencies on network providers, then regulatory relief induced by competitive entry could benefit the incumbents.
There appears to be consensus that one objective of U. But any actions to foster deployment should not take the form of industrial policy favoring any specific wireless technology, since there are a variety of technologies that can offer broadband capability.
Nor should it provide wireless technology an artificial advantage over other broadband technologies. Wireless broadband can be provided using fixed or portable technologies such as Bluetooth or ultra-wide band for short-range communications, Wi-Fi for medium-range, and WiMAX for longer-range or by using mobile technologies such as those used for third-generation "3G" or forthcoming fourth-generation "4G" mobile cellular service. Currently, Wi-Fi primarily provides wireless Internet access for laptop computers and personal digital assistants; WiMAX expands networks with wireless links to fixed locations; and 3G brings Internet capabilities to wireless mobile phones.
The short and medium range technologies share unlicensed spectrum with other technologies. Proponents of each of these technologies share the concern that there may be insufficient unfettered spectrum available for their technologies to be developed to full market potential though recent FCC actions have at least started the process for making such spectrum available.
It is not yet clear whether these various wireless technologies ultimately will be competing for customers or complementing one another by providing a broader base and greater choice of devices for wireless communications and networking.
Wi-Fi, or wireless fidelity, is the most widely employed of the family of Institute of Electrical and Electronics Engineers "IEEE" standards for frequency use in the unlicensed 2. Those are the bands on which wireless local area networks operate. The FCC's Wireless Broadband Access Task Force and others have identified a variety of actions to foster Wi-Fi usage, including managing spectrum in a fashion that eliminates artificial restrictions on the availability of unlicensed spectrum, promoting voluntary frequency coordination efforts by private industry, considering increasing the power limits in certain bands available for use by unlicensed devices in order to improve their utility for license-exempt wireless Internet service providers.
WiMAX is an industry coalition of network and equipment suppliers that have agreed to develop interoperable broadband wireless based on IEEE standard It can transmit data up to 30 miles and may ultimately be used to provide the broadband "last mile" to end users, that is, a means to provide fixed and portable wireless services to locations that are not connected to networks by cable or high-speed wires.
WiMAX uses multiple frequencies around the world, an impediment to interoperability. It now appears that the successful bidders in the recent auction for the Advanced Wireless Service AWS Spectrum will use that spectrum to provide mobile wireless services rather than fixed and portable service using WiMAX.
Another spectrum band that could be used for WiMAX is the 78 MHz of spectrum in the MHz band—18 MHz of which has already been auctioned off and the remaining 60 MHz of which will be auctioned off in as part of the transition of broadcast television from analog to digital technology.
Moreover, that spectrum is viewed as the equivalent of "Riviera beachfront property," that will be sought by multiple bidders, many of which would not intend to use it for WiMAX service.
Today's mobile wireless networks can only provide voice and limited data service. The next major advance in mobile technology, referred to as 3G, has been deployed overseas and is beginning to be introduced in the United States.
It dramatically increases communications speed. Fourth generation networks, which may be available in the near future, are expected to deliver wireless connectivity at speeds up to 20 times faster than 3G. Some U. Third generation and future developments in wireless technology will be able to support many services for business and consumer markets, such as: enhanced Internet links, digital television and radio broadcast reception, high-quality streaming video, and mobile commerce, including the ability to make payments.
The reallocation of spectrum to make more available for advanced wireless services is a specific example of a broader public policy objective: the management of spectrum in a fashion that promotes its efficient use to provide innovative services to Americans. There is a very lively debate about how best to manage the spectrum to maximize consumer welfare. There has been much criticism that legacy command-and-control regulation of spectrum—under which spectrum is assigned to specific uses and access to that spectrum for other uses is prohibited—does not take into account advances in technology that have created the potential for systems to use spectrum more intensively and to be much more tolerant of interference than in the past.
The debate about how best to allocate spectrum, however, is beyond the scope of this report. Some observers have suggested that a third network provider might have less incentive to provide strong price and service competition—to challenge the network access status quo—if it shared ownership or a strategic alliance with one of the incumbent networks.
On the other hand, there appear to be strong incentives for any broadband wireless network provider, even if it were owned by a telephone company or in a marketing relationship with a cable company, to be an aggressive competitor. First, wireless service is growing faster than wireline service, so it would not seem to be in a company's long term strategic interest to constrain its wireless activities to protect its wireline business.
Second, the broadband wireless networks are likely to extend geographically beyond the geographic reach of any telephone company or cable company network and therefore wireless providers will in many instances not be competing against an affiliated network. It would be difficult for a national wireless carrier to strategically provide two levels of competition: aggressive competition outside an affiliated network's region and passive within.
Much of the criticism of the Act has focused on those provisions that attempted to facilitate the transition from monopoly to competitive provision of telecommunications services, most notably the provisions requiring the incumbent local exchange carriers to make elements of their networks available to new entrants under certain conditions.
Those provisions were intended to foster intramodal competition with the understanding that new entrants could not instantaneously build out ubiquitous networks like those of the incumbent monopolies. Ten years after enactment of the Act, no intramodal entrant has been able to construct a ubiquitous network.
It has not proven viable to replicate the local loop "last mile" connection between a network's switch and a customer's premise, except in the case of large business customers whose traffic volume is sufficient to justify deploying a large pipe to the premise. The Federal Communications Commission has a tremendous role to play in creating fair rules for this new era of competition.
At this Internet site, we will provide information about the FCC's role in implementing this new law, how you can get involved and how these changes might impact you. This page will include information listing the proceedings the FCC will complete to open up local phone markets, increase competition in long distance and other steps.
You will find copies of news releases summarizing action, announcements of meetings where these items will be discussed, and charts describing the work ahead of us and where within the FCC and when it will be completed. Please note: some of the links on this page lead to resources outside the FCC. The presence of these links should not be taken as an endorsement by the FCC of these sites or their content.
For more information about the referenced documents, contact the person listed on the document. Simon, Donald R. Revere-Corn, Robert. Lewis, Peter H. Greenhouse, Linda. Ruth Ann Strickland. Telecommunications Act of [electronic resource]. Want to support the Free Speech Center? Donate Now. Farber, Daniel A.
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