Broadband

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Background

Broadband: the capacity to transmit large quantities of electronic signals (including data, video, text and voice) rapidly. This raises two important issues. The first is that, in transmitting various types of signals, broadband is at the heart of the convergence of telecommunication, information technology and broadcasting. While convergence has been discussed for several years, it remains unclear what it implies for end users (the big box), the regulatory framework (the big brother), and the business model (the big bid). In fact all that is clear to-date is that one integrated network (the big pipe) will be able to carry all kinds of communication.

The second is that several technologies and media may be used to provide broadband services. There may be competition between: networks (e.g. telephony and cable TV); media (copper, fibre optic, satellite, terrestrial microwave, or a hybrid of these).

Together these two issues imply a radical change in competitive at all levels from the application service provider to the network provider. There may be a need to review and modify competition policy and regulation.

Broadband access

Broadband access can be provided by guided media (either copper or fibre-optic), or by unguided media (air-interface) such as satellite or terrestrial microwave. Many developed and middle income countries have a policy of rolling out fibre-based infrastructure across the country. If broadband networks are to have a wide geographic coverage, the expense of this investment may render public-private cooperation essential in some countries. Even with public-private cooperation, the cost of establishing fibre infrastructure in rural or regional areas means that universal service may never be achieved.

For developing countries the more immediate goal may be to promote wider Internet access, which may be possible, for example, through broadband satellite or terrestrial microwave, or DSL where there is an existing copper network.

Broadband and the internet

The current interest in broadband is largely due to the Internet, which permits familiar services to be delivered in unfamiliar ways. This includes the delivery of voice services that compete with traditional telephony delivered over circuit-switched networks. Similarly, broadband infrastructure enables web casting of video or audio signals that compete with broadcast networks. Until now, the Internet has generally delivered these services at a lower quality with less reliability than conventional networks, but broadband access promises to change all that.

Broadband and market structure

The high costs of duplicating broadband infrastructure suggests a monopoly advantage to the first mover in both the backbone and the local loop. This raises competition policy concerns. Competition for a particular broadband operator can come in the form of regulated sharing of infrastructure, such as 3G licences tend to require, or from other broadband media such as terrestrial microwave or satellite. However, the first mover advantage remains strong and can be reinforced by 'lock-in' if, for example, cable TV decoders are not standardised and subscribers are prepared to pay for only one decoder.

Cross-media competition points to issues of technologically neutral regulation. Broadcast TV, telephony and cable TV, for example, are typically subject to distinct policy philosophies and regulation. Moreover, transmission media such as terrestrial microwave and satellite services generally carry quite specific regulations, taking account of the limitations on the availability of spectrum and geostationary orbital slots, as well as national security concerns. The question arises: just how can technologically-neutral regulation accommodate factors that have traditionally been technologically-specific and around which entire industries have grown up?