FCC Reports on the US Broadband Market

SAN FRANCISCO (08/04/2000) - The U.S. Federal Communications Commission (FCC) released two reports Thursday, showing significant increases in the availability of high-speed telecommunications services and usage of wireless industry products. The FCC, however, still is considering ways to mandate that cable companies open up their networks to competitors, in order to ensure the rapid and widespread growth of high-speed Internet access.

In one report, the FCC focused attention on the availability and usage of what it calls "advanced telecommunications capability." This heading covers high-speed, switched, broadband telecommunications that facilitate the production and delivery of bandwidth intensive functions such as voice, graphics, and video functions. Under the FCC's terms, high-speed services have over 200K-bps (bits per second) capability in at least one direction.

Congress requires that a yearly inquiry be made into high-speed communications to ensure that different areas and groups of people receive access to such services in a timely manner. If left to market forces alone, the study warns, rural, inner city, low-income and minority consumers may fail to receive access to these services.

Year over year, the FCC found that cable companies enjoyed a threefold increase in subscriptions and close to a fourfold rise in DSL (digital subscriber line) subscriptions processed by local exchange carriers. Additionally, the study noted that 59 percent of the zip codes in the U.S. can lay claim to at least one user of high-speed services. In areas of sparse population, however, only 19 percent of the zip codes had at least one subscriber.

While the survey said that the data proved inconclusive, the FCC did decide that minority groups likely remain particularly vulnerable to missing out on advanced services.

In order to speed up deployment of high-speed services, the FCC laid out several possible plans of attack. While no timetables have been set for the actions, the study did say that the FCC will ease the approval process for advanced wireless equipment, along with considering making more spectrum available for both licensed and unlicensed broadband services. A proceeding will also be initiated to decide whether or not to establish a national policy to mandate access by multiple Internet service providers to a cable company's platform.

Whether or not cable companies should be forced to allow competitors to license parts of the networks has been a contentious issue. Internet service providers (ISPs) argue, for example, that AT&T Corp. should open up its cable network just as the regional Bell operating companies (RBOCs) -- the former local telephone monopolies -- license their local networks to competitors entering the market.

The FCC has no schedule for deciding issues related to cable networks and universal access to high-bandwidth service, according to Michael Balmoris, an FCC spokesman. With regard to what technology rural areas might adopt to gain access to high-speed services, Balmoris said, "The economics of the situation do point to wireless."

In its fifth annual study on the state of the wireless industry, the FCC reported that, by the end of 1999, digital technology eclipsed its analog predecessor in the market for the first time. At the end of 1998, digital services made up a sparse 21 percent of the wireless market. Now, however, the study placed digital services as making up 51 percent of the marketplace.

In a 12 month survey ending in December of 1999, the mobile telephony sector recorded in excess of US$40 billion in revenue and increased subscriptions from 69.2 million to 86 million. As the number of users increased, the price of mobile telephone service dropped 11.3 percent between the end of 1999 and the close of 2000.

The study cited cheaper phones, less expensive monthly rates and nominally priced long distance as three of the major factors contributing to these findings.

The FCC, based in Washington, D.C., can be reached at +1-202-418-2555 or http://www.fcc.gov.

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