This past Monday, Nov. 14, 2011, the U.S. Chamber of Commerce hosted a panel discussion on the broadband ecosystem, entitled “The Broadband Internet Marketplace: Competition, Investment and Innovation,” with keynote speaker Deputy Chief Technology Officer for Internet Policy Daniel Weitzner, from the Office of Science and Technology Policy at the White House – right across the street from the Chamber’s Washington, D.C., headquarters.
Also appearing on the panel: Deloitte’s Dwight Allen, Director of Strategy Development, discussing the company’s very informative study on some potential outcomes of 4G deployment in the U.S. – and U.S. competitiveness – and myself, discussing the role of regulation on innovation and investment in the network.
Mr. Weitzner spoke at length about the urgent need to protect online privacy through an alternative regulatory approach to be overseen by the U.S. Federal Trade Commission, urging action on this issue now. Introducing the morning’s panel discussion, the U.S. Chamber’s Bill Kovacs noted his organization’s long support for the appropriate legislative and regulatory climate to foster innovation, and its activities to ensure that legacy policies were not applied to new networks, going back to 2002.
Mr. Allen observed that the U.S. government could play an extremely beneficial role in making more wireless spectrum available to carriers through an auctions process similar to those conducted in the past by the Federal Communications Commission, or F.C.C., and which played a key role in helping the United States to become a world leader in wireless voice technologies, as well as smartphones.
The Deloitte study notes that 3 of the 5 leading smartphone operating systems were designed by U.S. companies. This is the broadband ecosystem, where applications, devices, networks and services all combine, and continuously recombine in an effort to provide value for consumers. Cox today announced that it plans to discontinue offering wireless services, citing “several reasons, including the rapid shift to 4G and its inability to land ‘iconic devices.’”
These iconic devices possess the computing power several times greater than desktop computers from just several years ago, and this rapid shift in technology power, and fluidity of consumer choice, takes scale, as another article about Cox illustrates.
These rapid shifts put additional pressures on carriers to manage the exploding capacity demands on their networks – and by extension, on network equipment vendors. These vendors must address the challenges posed by scale in designing optical equipment that is priced in dollars, rather than tens of thousands of dollars, for the access plant, which must be amortized over dozens of consumers rather than thousands. This is what I spoke about.
Carriers support the development of an investment climate that encourages network enhancements to flow unimpeded by regulatory concerns over innovative technologies, and equipment vendors also need regulatory certainty to develop the technologies necessary for the future.
As the NTIA’s study on broadband adoption, released just last week, noted, there is good news and bad news in U.S. consumer habits. The good news is that 4 out of 5 Americans now use the Internet at home, using a variety of devices and access technologies. The bad news, however, is that 1 of 5 Americans do not. While the NTIA study did not delve into privacy, it remains a growing concern for many people and for many companies, too, unsure of how to protect consumers and what policies, or best practices, they should follow.
Mr. Weitzner also explained the cross-border concerns associated with privacy, to offer one example, whereby different states, and different countries or regions (he cited Europe on privacy), may apply standards more rigorous than applied elsewhere, effectively hindering the flow of commerce across the globe.
Equipment vendors face similar concerns that may slow or even prevent, outright, the development and sale of their technologies, either new or existing. I pointed out the role of uniform standards bodies in harmonizing, from a technical standpoint, the flow of trade and investment when and where it is needed most.
I’ll close now with an essential point about the potential adoption of 4G, from the Deloitte study, which observed that early predictions about consumer adoption patterns, for 3G wireless technologies, were not focused on multimedia capabilities, nor did the underlying studies mentions tablets, missing the potential for development of devices that would soon upend the market, and its enormous impact on network investment.
In short, the rapid deployment of enhanced technologies, such as 4G wireless, which offer broadband capacity many times greater than that of 3G, could very well usher in applications and services, even new industries, which we have seen follow in the wake of Apple’s introduction of the iPhone.
