Always-on Internet Access and High Bandwidth
An increasing number of Internet residential users don’t have to dial up a provider anymore; instead they are always connected to the Internet and merely have to open a window to browse. This “always-on” connection also offers incomparably faster downloads than modems—up to 1.5 Mb instead of the 32 to 56 Kb that modems are normally limited to. (Uploads are currently much slower, comparable to current modem speeds. Thus, the current broadband options for the home are “asymmetric,” allowing fast download speeds but modest upload speeds.)
All players in the Internet, cable, and telephone industries are focusing on this new “high bandwidth” market, and some commentators boldly predict that ISPs offering dial-up access will fade away in a few years.
There are snakes in the high-bandwidth paradise, though. First of all, high-bandwidth data connections are not available to everybody. It will take a long time (if not a miracle) to get the universal access we now take for granted with plain old telephone service.
Second, the new media provide technical grounds for monopolies by a single company in each geographical region. While a host of competing technologies are theoretically on the horizon, short-term technological changes may drive out competition—and thereby have a negative effect on affordable prices, innovation, and customer service. High-bandwidth options currently include:
- Cable modems
These are the most popular form of high bandwidth currently. But in many states of the U.S., half the population is not served by cable TV at all. Of those that can get cable, many have lines that are not suitable for data transmissions. AT&T has just bought TCI to get a path into the home for local telephone service (as well as data) but it has to invest an estimated two and a half billion dollars over the next several years to upgrade the lines.
AT&T has declared that all its cable modem users who want Internet service will have to get it from TCI partner @Home. Many competing Internet providers, organized in the OpenNET Coalition, claim that restriction excludes them from the next generation of Internet technology, and that the lack of competition will leave customers without control over quality or terms of service. A group called No Gatekeepers also calls for access to all ISPs. Professor Lawrence Lessig has come down on the open access side on the grounds it better preserves the current Internet architecture of innovation and end-to-end control; the implications of the debated are pointed out in a paper by Jerome H. Saltzer.
Since cable TV has been regulated under completely different laws from telephone service over the past several decades, most analysts say that forcing AT&T/TCI to allow competition would require new and far-reaching laws. The FCC has come out in opposition to open access on the grounds that the cable companies don’t have a historic monopoly the way the Bell companies do, and that the industry should be allowed to proceed at present without being hampered by regulation. (It’s taken 15 years to get even a semblance of competition in the telephone residential market; consumers don’t want cable modems held up for years over regulatory issues.) But the heads of the House Internet Caucus have introduced a bill that would require cable companies to let ISPs on their networks. And in Canada, regulators issued a notice requiring open access.
In some local communities—notably Portland, Oregon—ISPs have managed to hold up the AT&T/TCI merger while disputing the issue. Chairman Kennard of the FCC initially opposed such local action, saying that broadband access requires a national policy. Now, as cable modems are maturing, the FCC is holding hearings about regulation and access issues.
But some ISPs consider the cable modem dispute just a distraction from the ADSL battle described in the next item. Some commenters also claim that ISPs have nothing substantial to add to the service once the customer is on the cable company’s network, and that a rush to cable would overwhelm available bandwidth. (All the users in a neighborhood share a single channel.) Some solutions to offering access to multiple ISPs would require changes to the DOCSIS standards and equipment used by cable companies.
Perhaps this controversy will be solved through compromise and public pressure rather than through direct regulation. The biggest participant in Open Access, America Online, withdrew from the political process at the announcement of its merger with the Time Warner, which includes their cable systems. It promised to make cable systems open to all ISPs, but one ISP then complained to the FCC that the terms for sharing the cable market are onerous. A clear sign of a shift in public policy came when the Federal Trade Commission and Federal Communications Commission approved the AOL Time Warner merger—but imposed the condition that they allow access by other ISPs to their cable networks.
- Asymmetric Digital Subscriber Line (ADSL) over telephone lines
Until 1998, proponents of broaband data thought it would require the stringing of new phone lines (often called “fiber to the curb” or “fiber to the home”) at great expense. But then a standard called ADSL emerged that allowed downloads at speeds close to that of cable modems, without the cost of a “truck roll” (bringing a skilled technician to the customer’s site). Local telephone companies across the U.S. are now rushing to upgrade phone lines for ADSL.
Most Bell companies offer their own Internet service, but they claim to want competing ISPs also to offer service over ADSL lines and are required by law and local regulators to allow competition. But unlike dial-up lines, Internet service over ADSL requires coordination between the telephone company and the ISP. When the first ADSL service was offered by U.S. West in a number of Western states, many ISPs (as well as competing telephone companies) claimed it was putting barriers in the way to their offering service. Many small ISPs offering DSL service went bankrupt around the beginning of 2001, leaving the field even more to the incumbents. It is not clear whether the cause of the failures is poor response by the incumbents who are required to provide lines to competitors, or just the need for huge sums of cash to start up such a radical new business. Some commentators are claiming to see the approaching death of DSL.
While the Telecom Act requires the Bells to open their facilities to competitors, several bill introduced in Congress would remove key aspects of that requirement being used by competing phone companies and Internet providers in their attempts to get access to customers.
The FCC maintains its insistence on seeing local networks opened to competition. In a deal allowing a merger between the two local telephone companies SBC and Ameritech, it required them to sell local loops (the actual physical connection running from the telephone central office to the customer) to competitors. These local loops are one item that some competitors want to get their hands on, but they are not by any means a complete path to competition. Several long-distance companies complained that the deal left too many gaps to foster competition (for instance, allowing SBC/Ameritech to cap the number of loops sold). The FCC also required SBC/Ameritech to spin off its high-bandwidth Internet access business.
- Municipal networks
Cities large and small have been running their own utilities for a hundred years or more. Many are now deciding not to wait for private companies to serve up cable or broadband, but are building their own high-speed data networks that will serve all residents. Examples range from small towns like Glasgow, Kentucky to major cities like Palo Alto, California. Legal battles over municipal data networks are described in a February, 1999 article.
- Wireless networks (spread-spectrum or packet radio)
As described on another CPSR page, Internet access over low-cost radio antennae is becoming a reality in a few places, and offers promise in many geographical areas around the world.
Other creative solutions are being considered—notably satellite delivery—but these have not matured.
Last updated: November 21, 2001
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Created before October 2004