Telecom innovation in the US being led by broadband deployment: FCC

MUMBAI: In a statemjent before the Senate Committee on Commerce, Science and Transportation, US media watchdog Federal Communications Commission (FCC) chairman Kevin Martin notes that almost all of today‘s innovation is enabled by broadband deployment.

"Broadband technology is a key driver of economic growth. The ability to share increasing amounts of information, at greater and greater speeds, increases productivity, facilitates interstate commerce, and helps drive innovation. But perhaps most important, broadband has the potential to affect almost every aspect of our lives.


In 2005, the FCC created a deregulatory environment that fueled private sector investment. Since then, companies have begun racing to lay fiber to homes in the US. From March of 2005 to the end of last year, the number of homes passed by fiber increased from 1.6 million to 6.1 million, he notes.

Just as significant for consumers, the average price of broadband has dropped in the past two years. The Pew Internet and American Life Project (Pew) found that, from February 2004 to December 2005, the average price for home broadband access fell from $39 per month to $36 per month. For DSL, monthly bills fell from $38 to $32 (almost 20 per cent), while cable modem users reported no change from $41 during the same period.

The decline in price was accompanied by an increase in the number of Americans subscribing to high speed connections to the Internet. Such connections have grown by nearly 600 per cent since 2001. And according to the Commission‘s most recent data, high-speed connections increased by 26 per cent in the first half of 2006 and by 52 per cent for the year ending 30 June, 2006.


The FCC, he says, is making available as much spectrum as possible to put the next generation of advanced wireless devices into the hands and homes of consumers. In September the FCC closed its largest and most successful spectrum auction, raising almost $14 billion. The spectrum offered was the largest amount of spectrum suitable for deploying wireless broadband ever made available in a single FCC auction. "And we are currently preparing to auction 60 MHz in the 700 MHz band, spectrum that is also well-suited for the provision of wireless broadband" he adds

Moreover, the number of consumers who receive their broadband connection through satellite or wireless will continue to increase, as new satellite services are launched, rural wireless Internet service providers continue to grow, and Wi-Fi hotspots continue to sprout up across the country. "Indeed, there are nearly 50,000 Wi-Fi hotspots throughout the US, more than three times the number of any other country".

Media: He notes that as has been the case with the telecom sector, consumers and companies are benefiting from technological developments and innovation in media. DVR‘s, Vod and HD programming offer them more programming to watch at any given time then ever before. Thanks largely to new services like these, cable operators‘ total revenue grew from $65.7 billion to approximately $73 billion last year.

At the same time while consumers have enormous choice among channels, they have little control over how many channels they are able to buy. For those who want to receive 100 channels or more, today‘s most popular cable packages may be a good value. But according to Nielson, most viewers watch fewer then two dozen channels. For them, the deal isn‘t as good.

The cost of basic cable services have gone up at a disproportionate rate - 38 per cent between 2000 and 2005 - when compared against other communications sectors. The average price of the expanded basic cable package, the standard cable package, almost doubled between 1995 and 2005, increasing by 93 per cent.

Martin notes that the increase in cable prices appears even more dramatic when viewed relative to the prices for a number of other communications services: prices for long distance, international, and wireless telephone service have all decreased dramatically during this same timeframe.

Progress in satellite: 10 years ago the satellite industry was nascent. Today, Direct Broadcast Satellite (DBS) provides consumers an important competitive choice. And satellite offerings are sometimes the only multi-channel video option for rural Americans. Between 2000 and 2006, DBS subscribership grew 100 per centand average revenue per user grew 32 per cent. Like DBS, satellite radio also has experienced significant growth. Subscriptions have increased from 1.6 million in 2003 to 13.6 million subscribers in 2006.

"The transition from analog to digital technology poses both opportunities and challenges for the broadcast sector. The new and better services that digital technology enables are great for consumers, who will have access to more free news, information and entertainment.

The way forward: Martin notes that there are four areas that deserve particular attention.

"First, we must continue to increase access to communications services. I will continue to make broadband deployment the Commission‘s top priority.

"As wireless technologies become an increasingly important platform for broadband access, it is critical to ensure that there is adequate spectrum available for providing broadband service.

"Second, we must continue to promote real choice for consumers. Competition and choice in the video services market will benefit the consumer by resulting in lower prices, higher quality of services, and generally enhancing the consumers‘ experience by giving them greater control over the purchased video programming.

"We need to continue our efforts to create a regulatory environment that encourages entry into this market and more choice for consumers. This includes making sure that competitive providers have access to "must-have" programming that is vertically integrated with a cable operator."

Martin says that the FCC also needs to ensure that existing service providers are not standing in the way of the innovations currently occurring in the consumer electronics space. Consumers want to be able to walk into a store, buy a new television set or Tivo, take it home, and plug it in as easily as they do with a telephone.

Third, he says that the FCC must continue to protect consumers. "We must always be on alert for companies intentionally or unintentionally harming consumers.

Martin says that perhaps no other issue before the Commission garners more public interest then its quadrennial review of media ownership rules. This attention according to him is understandable given that the media touches almost every aspect of American lives. "We must make sure that consumers have the benefit of a competitive and diverse media marketplace. At our public hearings, the Commission has heard a consistent concern that there are too few local and diverse voices in the community. Certainly, we need to protect localism and diversity in the media. We must balance concerns about too much consolidation and too little choice, however, with appropriate consideration of the changes and innovation that are taking place in the media marketplace."

Fourth and finally he notes that the FCC must work towards enhancing public safety.

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