The revitalization of the countryï¿½s technology sector is vital to
American economic recovery. Information technology drove the boom of the ï¿½90s,
and its renewed growth can fuel recovery in 2002. Broadband, the next
generation of Internet service, offers a creative foundation on which a host
of multimedia applications can be developed.
Many view the widespread deployment of broadband technology as a key
component to that recovery. Recent debates in Congress on the Tauzin-Dingell
Bill and new FCC initiatives indicate that the government is also looking to
broadband to boost the countryï¿½s economy.
Despite a great deal of hype, consumer uptake of DSL to date has been
disappointing due to many factors outside of their control. Analysts
attribute this dismal uptake to a variety of factors including technological
WHATï¿½S THE HOLD UP?
The intent of the Telecommunications Act of 1996 was to increase the number
of players by opening up the local loop to competition. One of the ideas was
to level the playing field for broadband data services by allowing newcomers
like competitive/data local exchange carriers (CLECs/DLECs) to share access
lines from the incumbent local exchange carriers (ILECs) and use them to
provide broadband data service such as DSL. Granting access to the network
was the first step. Gaining access is another story.
The ILECs and CLECs have been drawn into battle on the unbundling issue.
DSL technology enables carriers to transmit high-speed data to customers
over the same standard telephone lines used to carry voice. Data is
transported using high-frequency modulation, while voice is carried as low
frequency signal. A splitter, which separates the data from the voice, is
required to give competitors access to the data portion of the local loop.
Typically, splitters are located in digital subscriber line access
multiplexers (DSLAMs), installed by the competitive carrier to provide DSL
service. They are collocated with the ILECï¿½s switching equipment. When a
subscriber changes his data service provider, porting from one splitter to
the new providerï¿½s splitter can disrupt a customerï¿½s voice service
provided by the ILEC.
ILECs argue that sharing line with broadband data service providers
presents significant challenges and could result in compromising the quality
of ï¿½life-lineï¿½ voice service to their subscribers. Line sharing also
diminishes the control ILECs have on the subscriber loops and makes loop
management and testing much more difficult compromising the quality of
Digital loop carriers (DLCs), deployed by ILECs to take fiber closer to
the curb, have also created roadblocks to deploying the DSL. The DLC, also
called a remote terminal, aggregates lines from neighborhoods, residential
areas, and small/medium businesses. It is connected to the CO with fiber or
T1 lines. Most DLCs deployed today are narrowband and cannot support
high-bandwidth data service. These DLCs must be upgraded to become
DSL-capable. ILECs are not anxious to incur the expense of upgrading their
networks until regulatory uncertainties are cleared.
From the CLECï¿½s perspective, it is not economically feasible to deploy
DSL service without line sharing. Duplicating the incumbentsï¿½ DSL access
lines is such an expensive proposition that it is not a viable solution.
Collocating DSL termination at the DLC is not a workable option either. With
the downturn in the economy, investment funds for competitive players have
dried up. Many of the start-ups that hoped to take market share from the
ILECs have filed for bankruptcy. The remaining providers simply do not have
the funds to invest in purchasing equipment or building networks.
BREAKING THE STALEMATE
The Tauzin-Dingell Bill, which recently passed the House by a vote of 273 to
157, revisits the way in which high-speed Internet is regulated and attempts
to break this stalemate. The bill has pro-incumbent bent and would allow the
ILECs to provide broadband service without meeting 1996 Telecommunications
Act prerequisite of opening their networks to competition. If the bill is
approved, ILECs will no longer be required to unbundle the high-frequency
DSL portion of the access loop. Opponents of the bill argue that it would
kill off competitors who rely on access to the ILECs network to reach their
As a further measure to spur the deployment of broadband, the bill
requires the incumbents to roll out high-speed service on a specific
schedule to guarantee broadband coverage across all regions. It calls for
the availability of broadband at 30 percent of central offices in the first
year, 40 percent within two years, 70 percent in three years, and 100
percent in five years. The bill has to pass the Senate before becoming the
THE FCC WEIGHS IN
Past rulings issued by FCC clearly stated the Commissionï¿½s position on
broadband ï¿½ ILECs must share their lines with competitors and unbundle the
high-frequency DSL component of the local loop. However, recent initiatives
suggest that the FCC may be reconsidering its stance.
The FCC wants to resolve the outstanding regulatory issues that relate to
the delivery of broadband Internet access services over traditional
telephony-based circuits. The FCC recently launched several proceedings to
solicit input from the industry. It has stated that one of its objectives is
to ensure that broadband services exist in a minimally regulated environment
that promotes investment and innovation. Additionally, the FCC is
questioning whether ILECs providing DSL should be considered monopolies
given the competition they face from cable and wireless broadband providers.
This seems to indicate that the Commission may relax its current unbundling
regulations. Interestingly, the FCC has tentatively concluded that wireline
broadband Internet access services are information services, with a
telecommunications component, rather than telecommunications services with
an information component. If the Commission determines that broadband is in
fact an information service, then many of the telecommunication regulatory
requirements will not apply to the technology.
The recent regulatory initiatives will have significant impact on the future
of telecommunications. If the current requirements to share lines are
relaxed, it is likely that the ILECs will become more aggressive in their
deployment of DSL service, increasing their investment in broadband
infrastructure and services. However, DSL may well be relegated to a
data-only service. Since the ILECs already provide voice service, there is
no strong incentive for them to deploy voice over broadband in the near
The independent DSL providers will be the big losers. If they are
required to duplicate access lines to the customer premise, they simply will
not be able to compete.
The consumers will benefit however the stalemate is broken. With
enforceable unbundling, they will have access to service delivered by a
variety of providers. If the ILECs are not required to unbundle the local
loop, they will likely upgrade their networks and make DSL available to many
Mr. Ravi Ravishankar is director, Advanced Technology Planning,
Tekelec. His focus is on defining signaling solutions and products for the
next-generation packet telephony and 3G wireless networks. Tekelec is a
leading developer of telecommunications signaling infrastructure,
softswitches, testing and diagnostic solutions, and service applications.
Please visit their Web site at www.tekelec.com.
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