Part 2: Universal Internet Access

1
Part 2Universal Internet Access

• Robert Cannon
• Senior Counsel for Internet Issues
• Office of Plans and Policy
• US Federal Communications Commission

2
Standard Disclaimer
Views expressed are Robert Cannons and do not
necessarily represent those of the FCC, the
Commissioners, or its staff.
3
A Nascent Industry
4
1991
5
1997
6
Logarithmic
Source Matrix.net
7
1996
Distribution of ISPs September 1996
8
1998
Distribution of ISPs October 1998
9
Number of Internet Hosts Source Matrix.Net
10
Decrease
100-200
25-50
50-100
Source Matrix.net
11
Online Populations
Million
Source Morgan Stanley Dean Witter, The Global
Internet Primer (June 2000)
12
North AmericanBackbone Providers
Number of Providers
Source Boardwatch Magazine
13
Backbone Market
Source OECD
14
Factors for Internet Deployment

• Telecommunications Pricing
• Universal Telecommunications Service
• Customer Premises Equipment Market (Modems)
• Computer Inquires Telecom Safeguards
• Open Platform / Bottlenecks
• Anticompetitive Behavior

15
Telecommunications Pricing
16
40 Hours US PPP (off-peak), September
2000www.oecd.org/dsti/sti/it/
17
Internet subscribers and pricing
18
Internet Development and Pricing
19
At the beginning of 2000 five countries had
unmetered access. At the close of 2000 there will
be 12.

• Traditional
• Australia, Canada, NZ, Mexico, US.
• Introduced in 2000
• 24/7 Germany, Portugal, UK.
• Off-peak Finland, Hungary, Korea, Spain.

• Close Call
• Japan (NTT for ISDN and late night)
• Unmetered but not from incumbent
• France, Netherlands, Ireland, Italy, Poland,
  Switzerland, Sweden.

Source OECD
20
US Telecom Universal ServiceHistorical Telephone
Penetration Estimates
Great Depression
Source FCC
21
Deregulation of CPE

• Carterphone 1959 connects radio to telephone
• FCC overturns ATT tariff that prohibits
  interconnection
• Standardize as Part 68
• Result in vibrant modem market

22
Computer InquiresRecap

• Separation of Basic and Enhanced
• Unregulation of Enhanced Services
• Affirmative regulation of carriers
• to meet the needs of data processing
• to promote innovation and competition in the data
  processing market
• to assure equal access for computer service to
  essential communications services
• to prevent anticompetitive behavior
• Open communications platform

23
Resulting MarketLow Barriers to Entry
Many 1000s of Content and Application Providers
7000 ISPs
Telecom
24
Mistakes We Have Made...
25
I think there is room in the world for maybe five
computers. - Thomas Watson Sr., Chairman of IBM
Corp 1943
26
This 'telephone' has too many shortcomings to be
seriously considered as a means of communication.
The device is inherently of no value to us. -
Western Union, 1876.
27
Internet
ARPANet
Bitnet
Source Matrix.net
28
Community NetworksBandwidth v. Content

• Training
• Community Empowerment
• Promote Local
• Communication
• Economy
• Health
• E-Democracy
• Not a global shopping mall
• Creators not Consumers

Telecommunity Resource Center www.tcrc.net Gene
Crick
www.afcn.net
29
ACLU v. Reno(Communications Decency Act)

• It is no exaggeration to conclude that the
  Internet has achieved, and continues to achieve,
  the most participatory marketplace of mass speech
  that this country -- and indeed the world -- has
  yet seen. The plaintiffs in these actions
  correctly describe the "democratizing effects of
  Internet communication individual citizens of
  limited means can speak to a worldwide audience
  on issues of concern to them. Federalists and
  Anti-Federalists may debate the structure of
  their government nightly, but these debates occur
  in newsgroups or chat rooms rather than in
  pamphlets. Modern-day Luthers still post their
  theses, but to electronic bulletin boards rather
  than the door of the Wittenberg Schlosskirche.
  More mundane (but from a constitutional
  perspective, equally important) dialogue occurs
  between aspiring artists, or French cooks, or dog
  lovers, or fly fishermen. . . . T the Internet
  may fairly be regarded as a never-ending
  worldwide conversation. The Government may not,
  through the CDA, interrupt that conversation. As
  the most participatory form of mass speech yet
  developed, the Internet deserves the highest
  protection from governmental intrusion. -- ACLU
  v. Reno, CA No. 96-963 (E.D.Pa June 11, 1996),
  affirmed, No. 96511(S.Ct. June 26, 1997)

30
Strategy of Universal AccessThrough Local Access
PointsE-rate
31
Schools and Libraries ProgramDiscount Matrix
32
Schools and Libraries ProgramProcess
School
Forms
Contract
Money
Universal Service Administrator
Service Provider
33
Schools and Libraries ProgramWhat is Covered

• Covered
• Wiring
• Routers
• Hubs
• Network File Servers
• Necessary Software
• Installation
• Maintenance
• LANs

• Not Covered
• Computers
• Hardware
• Non-network software (applications)
• Fax Machines
• Modems
• Teacher Training
• Upgrades to Electrical System
• Asbestos Removal
• Security

Eligible Services List http//www.sl.universalserv
ice.org/Reference/eligible.asp
34
Schools with Internet Access
www.sl.universalservice.org
Percent
E-Rate School and Library Internet Access
Subsidies 84 funding has gone to public
schools 4B has been distributed
35
Timeline
W3C
IAB
TCP/IP Invented
DNS
Comp III
1970
1980
1990
2000
TCP/IP
36
Concluding Thoughts...

• Internet Growth is Robust
• Telecommunications Policy is a key factor to
  Internet Deployment
• Focus on bottlenecks
• Government Partnership
• Research Development
• Universal Service
• Net is more than a global shopping mall

37
Potential Policy SolutionsTexas
High
Technology, Demand Aggregation
Competition
Ability to Pay
Loan and Tax Incentive Programs, Community
Networking, Social Contracts
Grant Development, Economic and Community
Development Initiatives
Low
Low
Population Density
High
Source Brett Perlman, Texas Public Utility
Commission
38
Thank You . . .
Robert Cannon Senior Counsel for Internet
Issues FCC Office of Plans and Policy rcannon_at_fcc.
gov
39
Schools and Libraries ProgramResources

• FCC School Libraries Program website
  www.fcc.gov/ccb/universal_service/schoolsandlibs.h
  tml
• Universal Service Administrators SL Website
  http//www.sl.universalservice.org/
• Merit.Net http//www.merit.edu/k12.michigan/usf/
• The New Universal Service NTIA's Guide for
  Users http//www.ntia.doc.gov/opadhome/uniserve/un
  ivweb.htm