Transcript DAW_DOC
Telecommunications Demand
Aggregation Workshop
Douglas Devereaux
Office of Technology Policy
U.S. Department of Commerce
Demand Aggregation Workshop
Agenda
Why Is Broadband So Important?
The Good News and Bad News About
Broadband Deployment & Adoption
Recommendations for Results
Why Is Broadband So Important?
Economic Rebound and Growth
IMPACT OF IT (7%)
28% GDP Growth
2x New Job Growth
Reduced Inflation
2/3rds of New
Productivity Growth
IMPACT OF BB ??
$500B/year to US GDP
1.2M new jobs
Sources: IT – Department of Commerce, Economics & Statistics Administration, Digital Economy
2002; Broadband GDP – Crandall & Jackson, 2001; BB Jobs – TeleNomic Research, Feb. 2002.
Why Is Broadband So Important?
Revolutionizing
Business
Access Alone
Faster downloads
Faster e-mail
Why Is Broadband So Important?
Revolutionizing Business
Revolutionizing
Business
•Productivity
•Cost Savings
Using Broadband Business Solutions
CRM, Media Streaming,
Supply Chain Optimization
Virtual Manufacturing
Telework, E-Learning,
Collaboration
Why Is Broadband So Important?
Enduring Freedom
The No. 1
technology
challenge facing
war fighters in
Afghanistan is
the need for
more bandwidth.
GCN reporting on comments of
Maj. Gen. Charles E. Croom,
vice director for command,
control, communications and
computer systems with the Joint
Chiefs of Staff.”
Why Is Broadband So Important?
Homeland Defense
Video Conferencing
Cockpit Monitoring
Offsite Data Backup
Airport Security
Emergency Info
Distribution
Knowledge Mgmt
Why Is Broadband So Important?
Health Care & Life Science
Anytime, Any
Where Check-Ups
24-7 Patient
Monitoring
Expert
Consultations
Bio Research
Why Is Broadband So Important?
Education & Freedom
Distance Learning
Freedom of Information
Access to Truth
State of Deployment
The Good News
2000 “Broadband” Subscriber Growth: 158% (FCC)
2001 “Broadband” Subscriber Growth: 90% (Yankee Group, est.)
Years to reach 10%
adoption (critical mass)
VCR
10
Total years to
reach 50%
14
CD Player
5
Color TV
12
18
Cell Phones
8
15
Broadband
4.5
tbd
Source: FCC
10.5
90%
availability
from at least
1 provider by
end of 2002.
- Morgan Stanley
State of Deployment
Future Projections
35.1 Million households in 2006 (Jupiter
Media Metrix, 2001)
40 Million residential and 4 million
small businesses in 2005 (JP Morgan –
McKinsey, 2001)
58 Million active users by 2004 – 517%
growth over 2000 (eMarketer)
The State of Deployment
Remaining Challenges
Percentage of US Homes
100%
Supply
80%
60%
40%
Demand
20%
0%
TAKE
RATE:
1999 2000 2001 2002 2003 2004 2005 2006
~12% households
20% Internet
households
DSL Availability
Cable Availability
DSL Take Rate
Cable Take Rate
Sources: Morgan Stanley Dean Witter, July
2001; FCC; NCTA
The State of Deployment
Remaining Challenges
VALUE & COST CONCERNS (76% up 11%)
UNDERSTANDING / AWARENESS
NFIB
CONSUMER VALUE NEEDED!
La Grange, UK (72% “no interest in paying”)
GENERATIONAL (only 58% US pop. online)
HASSLES (Installation & CPE)
SATISFACTION WITH DIAL UP (75%)
The State of Deployment
Remaining Challenges
Lack of Killer Content
Music, Movies &
Gaming on the sidelines
Digital Rights Solutions &
Business Models Needed!
The State of Deployment
Remaining Challenges
DVD Quality
= 4 Mbps
HDTV Quality =
19.8 Mbps
Today’s “Broadband” is
Tomorrow’s Traffic Jam
MORE
BANDWIDTH
NEEDED!
TV Quality =
750 kbps
Kira Greene, “Coming eventually: TV on the PC,” Broadcasting & Cable, 11 December 2000, 88.
The State of Deployment
Remaining Challenges
MAJOR NEW INVESTMENT NEEDED!
“The cost of… rewiring to provide fiber-to-thehome to all the roughly 100 million U.S.
households – would be some $100 billion, reflecting
in considerable part construction costs that are not
amenable to dramatic cost reductions.” (National
Research Council, 2002)
“The move from narrowband to broadband
networking [is] the largest, riskiest and most
expensive undertaking the industry could ever
attempt to accomplish.” (Bear Stearns & Co. estimating
$200B cost for deploying broadband in U.S.)
The State of Deployment
Remaining Challenges
Deployment is on track.
Deployment is off track.
It’s a supply-side issue.
It’s a demand-side issue.
Need to achieve
deregulatory parity.
Need greater enforcement of
existing regulations.
Need to subsidize carriers
to incent investment.
Need to rely on market-based
investment incentives.
Government should
deploy its own networks.
Government should buy
private services in bulk.
Key is competition on
each platform.
Key is competition among
platforms.
CONSENSUS RECOMMENDATIONS NEEDED!
Why Broadband Presents Such a
Policy Challenge
Digital Convergence
Telecommunications
Information Technology
PRICE$
Slow to Change
Rapid Innovation
Monopolistic
Competitive
Subsidized
Market-Driven
PRICE$
Heavy Regulation Minimal Regulation
Recommendations for Results
Private Sector Actions
Lead by Example: Web content
& E-Business Practices
Encourage Online Business by
Partners, Customers, Suppliers
Support Employee Access at
Home / Encourage Telework
Improve Security and Protect
Privacy
Encourage distance learning at
schools and Universities
Improve understanding of
broadband business solutions,
identify and remove barriers
(Trade Associations)
Recommendations for Results
State Government Actions
Urban Planning
Historic Preservation
BEST PRACTICES
NEEDED
Revenues (e.g. ROW)
Environment
Size of Government
Bandwidth
Recommendations for Results
Federal Government Actions
Encourage Investment:
Accelerated Depreciation
for CapX, Internet Tax
Moratorium, R&D
Work with FCC, States &
Localities on Supply Side
Regulatory Issues
Lead by Example via
procurements & e-Gov
Partner with Industry to
Protect Networks & IPR
Educate & Inform: Users,
businesses, consumers
Recommendations for Results
TECHNOLOGY IS THE KEY
Address Digital Rights Management Challenges
Improve Consumers’ Experience with Deployment
Develop Emerging & Existing Platforms
Deliver More Speed Over Coax and Copper
Develop Innovative Deployment Techniques
Develop New Applications to Add More Value
Develop E-Commerce QoS (guaranteed data rates, micropayments, authentication, security, VoIP)