Internet backbone is comprised mostly of fiber optic line

1
Comparative Telecommunications Law

• Brooklyn/Loyola Summer Program
• ltunibo.itgt
• Prof. Karl Manheim
• 9 Broadband

2
Overview

• Broadband defined
• High speed access to the Internet
• Faster than dial-up
• Typically 128 kb/s, up to several Mb/s
• Technologies
• Fiber
• Dedicated copper (e.g., T1 (1.5kbs) or T3 (7.5))
• Cable (coaxial)
• DSL (phone line)
• Wireless (fixed and mobile)

3
The Last Mile

• The physical problem
• Internet backbone is comprised mostly of fiber
  optic lines (wires)
• Throughput in terabytes (1000s of gigabytes) /
  sec
• Ample for any foreseeable telecom need /
  technology
• Fiber terminates at telco facility (switching
  office)
• Bringing fiber into home or office is very
  expensive
• 4,000 per termination
• Last mile is usually copper wire
• Coaxial or phone line
• Owned/operated by cable/telco

4
The Last Mile

• The economic problem
• Cable/telcos are monopolies
• With high capital investment costs
• Can reap monopoly rents
• By keeping competitors out
• By bundling services
• Transport services
• ISP services (internet, email)
• Value added services

5
The Last Mile

• The regulatory problem (solution)
• Price constraints
• Price Regulation (e.g., by PUC or FCC)
• Competition
• Mandated by forced leasing of infrastructure
• New technologies
• Fixed/mobile wireless
• Satellite Internet
• Interconnection requirements on LECs
• Enabling competition
• Applies to DSL, not cable broadband or fixed
  wireless

6
Case Study - Cable Broadband

• Physical Capacity
• Each video channel (_at_6 Mhz/each) redeployed for
  Internet use could service 20-50 customers
• _at_ 30-50 each per month
• Capitalized present value 10,000
• Portland Case
• City of Portland mandated open access
• Cable companies must rent transport space to ISPs
  
• Pursuant to local franchise regulatory authority
• ATT claims preemption by TCA and FCC reg.

7
Case Study - Cable Broadband

• Interconnection ( price) regulation
• Telecommunications Providers (LECs) Yes
• Cable companies No
• Information Service Providers No
• ATT v. Portland (9th Cir. 2000)
• Cable broadband both telecom and info service
• As telco, competitors had interconnection rights
  (enforceable through FCC), but Portland preempted
• As info service, ATT not subject to regulation
• Not cable company no local regulatory power

8
NCTA v. Brand X (Supreme Ct 2005)

• FCC rulemaking post ATT v. Portland
• Cable broadband is information service
• Vacated by 9th Cir.
• Selected by lottery (multidistrict litigation)
• Chevron issues
• Whether TCA is clear on telecom service
• If so, earlier 9th Cir. decision is binding
• If not, courts should defer to agency expertise
  (once rulemaking proceedings are complete)
• Reexamine deference in light of agency capture

9
DSL

• Line sharing
• Voice transport uses low frequency signal
• Ordinary dial-up uses same low frequency
• Limited to 56 kb/s
• High frequency signal can be sent on same line
• Throughput typically at least 384 up 128 down
• Signals must be combined/split at both ends
• Home DSL modem
• CSO (telco office) line filter before switches

10
DSL

• Unbundling requirements for ILECs
• TCA requires incumbents to lease unbundled
  network elements (UNE) to competitors
• Local loop, switches, databases
• Goal to foster competition
• Price control
• by state PUCs per FCC formula
• TELRIC (cost recovery)
• Unbundling removes ILEC monopoly, even though it
  still owns the physical infrastructure

11
FCC DSL Ruling (Mar. 25, 2005)

• How does unbundling apply to DSL?
• Line sharing order (1999)
• High freqency portion of loop is declared an UNE
• ILECs must lease HFPL to CLEC data services
• Whether or not CLEC is also providing voice
  services
• Thats why Yahoo, AOL, etc. can provide DSL
  services over your local telcos local loop
• Does ILEC have to supply DSL to CLEC voice
  customers?
• No nothing in TCA requiring ILECs to provide DSL

12
Wireless Broadband

• Mobile
• Cellular (3G)
• Air-Ground
• 800 MHz band (previously cellular - AMPS)
• Auction pending
• Fixed
• Satellite
• Broadcast or MMDS frequencies

13
Interconnection in EU

• Access Directive (2002/19/EC)
• Implemented by Natl Regulatory Authorities
• Interconnection rights obligations
• Access to UNEs
• Non-discrimination
• Transnational
• Transparency
• No cross/hidden subsidies
• Cost-recovery pricing
• Compare TELRIC

14
Voice over Internet (VoIP)

• Technology
• Packet Switching
• Analog voice signal converted to digital signal,
  which is then broken into data packets
• Packets sent over Internet like other data
• Reverse process at destination computer
• Transmission
• Computer-to-computer
• Can be over same physical backbone as voice
  telephony
• But bypasses PSTN, LECs, IXCs
• Phone-to-phone
• Uses Internet in lieu of IXC otherwise works
  like telephony

15
Voice over Internet (VoIP)

• Economics
• Because internet telephony bypasses telcos,
• No interconnection obligations, compensation
• Exception VoIP call from or to standard
  telephone (e.g., Phone-to-Phone)
• Termination charges apply
• No Universal Service surcharges
• Competitive pressure on wireline/wireless telcos
• Telcos demand compensation from ISPs

16
Voice over Internet (VoIP)

• Regulatory issues generally
• VoIP defies national boundaries
• Users are nomadic whenever on Internet
• Phone numbers are portable (globally)

17
VoIP Regulation in US

• NPRM in re IP-Enabled Services (3/10/2004)
• Should IP service providers be regulated?
• Internet not under FCC or NRA jdx, or otherwise
  subject to government regulation
• Advent of unregulated services, displacing
  regulated ones, may require general deregulation

18
VoIP Regulation in US

• Order re ATT Access Charges (4/21/2004)
• ATT uses Internet to route interexchange calls
• LEC -gt VoIP -gt LEC
• Bypasses IXC and IXC obligation to compensate
  destination LEC to terminate calls, but otherwise
  looks identical to wireline telephony (incl. CPE)
• So-called Phone-to-Phone
• No reason to treat termination any differently
• ATT must pay access charges
• Order doesnt apply to Computer-to-Computer VoIP

19
VoIP Regulation in US

• Order in Vonage VoIP Services (11/9/2004)
• LECs normally subject to state PUC regulation
• Joint State Federal Board
• Separation requirements
• C2C VoIP bypasses LECs therefore not subject to
  state regulation
• E.g., E911 services
• Pending
• Access charges for C2C
• Universal Service support subsidies

20
VoIP Regulation in EU

• DGIS Consultation Document (14 June 2004)
• Application of Telecom. Framework Directives
• NRA authorization not required for Electronic
  Communications Services (Internet services)
• Exceptions tel. numbering PATS (traditional
  telephone services) emergency services
• Possible exception end-to-end universal service
  requiret
• Commission takes light touch reg. approach
• VoIP contributes to creation of single European
  mkt
• VoIP providers may be able to compete with PATS
• Just as mobile operators can in Europe
• Still investigating impact on telephony markets

21
Coverage

• Friday (6/3), Auctions Comm/Ent 432-442 C/E
  443-448
• Monday (6/6), HDTV overview 132-149
• Tuesday (6/7), Advanced Technologies 150-169
• Weds (6/8), Satellite 216-230
• Thurs (6/9), Tel Numbering C/E 423-432, C/E
  448-451
• Mon (6/13), Wireless 288-305, 306-319 C/E
  442-443
• Tues (6/14), Broadband 320-342
• Weds (6/15), Internet 352-361, 373-375 C/E
  361-372, C/E 379-386
• Thurs (6/16), ICANN C/E 372-379, C/E 452-457
  362-372
• Fri (6/17), Catchup Review