As busy as people are trying to prepare for the imminent opening of the first of three proposal submission windows for funds authorized by the American Reinvestment and Recovery Act ("broadband stimulus"), a bigger food fight will begin to break out next year as the Federal Communications Commission opens a new rule-making on a national broadband strategy. As much attention as the broadband stimulus program is getting, it is going to be dwarfed by any new framework that emerges from the FCC effort.
The stimulus money is a temporary "shot in the arm." In fact, some question whether there will be much of any long-term impact from the majority of the money that ultimately is allocated, in jobs, an identifiable uptick in broadband use or economic growth.
Any new national broadband policy will reshape the broadband marketplace, creating new winners and losers on the supplier and reshaping the financial terrain for existing and would-be contestants, in ways that contribute "in a material way," to use the financial term, to the health of virtually all service providers, software and hardware suppliers.
Specifically, the FCC now is charged, by statute, to determine how tax dollars will be spent on deploying and upgrading Internet access across the United States. Telcos large and small--and their suppliers--have huge stakes in how those rules are recast. And make no mistake: current business models, revenue streams and company valuations are at stake.
The FCC's responsibility is also to update policies and regulations that have conspicuously failed to keep pace with changes in communications technologies and the different ways in which the US public actually get their phone, cable TV and Internet services.
It would not be overstating the case to say we will witness the biggest single change to U.S. communications regulation since either the 1934 Communications Act, or the Telecom Act of 1996, each of which has been foundational for shaping the U.S. communications environment.
As some of us have been arguing for a half decade or more, it is likely that regulators will be looking at greater structural change involving a form of structural or functional separation, developments which already have occurred in Europe and now are happening in Southeast Asia, and which has happened on a small scale in the United States as well, principally in Rochester, N.Y., where Rochester Telephone agreed to form a new wholesale access company providing local loop services to all licensed providers.
That move will be fiercely resisted by most telcos, you can be sure, as it formally breaks up the vertically-integrated model historically the mainstay in the U.S. market. Cable operators have to worry that they will, for the first time, also be forced to provide widespread wholesale access to competitors as well, something the cable industry always has opposed but which will be hard to avoid if other key providers are required to do so.
Small telcos face equally-large challenges, as a shift to broadband concerns might necessarily reshape rural investment rules in ways that directly harm the existing voice revenue support many hundreds of companies now rely on to support their firms. For hundreds of independent and rural companies, that government support is the single largest income category, vastly outstripping actual direct end user revenues.
The other potential changes are new requirements for minimum bandwidth, control of network management practices and a wide variety of business-model-shaping changes.
If you have any familiarity with the on-going disputes about universal service funds, or the intense pressure created by the debates leading up to the Telecom Act, you have some idea of what is about to happen.
Oddly enough, you will find widespread sentiment that the Telecom Act failed. But you will not find many human beings that believe their own choices, value or communications richness now are worse than they were before the Act was passed. What is clear is the foundational impact any rules changes will have on competitor fortunes. Still, an early prediction: no matter what ultimately happens, no matter which sectors claim they have "won or lost," end users will have richer options than before, with or without rules changes. But rules changes are inevitable.
Twitter already seems to have been embraced as a business tool, new user data from comScore suggests.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
