Information Technology Reference
In-Depth Information
highly controversial order released in 2005 (FCC,
2005), citing changed technological and market
conditions, the FCC continued the deregulatory
trend by eliminating the obligation of facilities-
based wireline telecommunications companies
to provide, as a regulated service, the broadband
transmission component for independent ISPs.
This effectively ended the Computer Inquiry II
rules that had governed the industry for 25 years.
To a large extent, these regulatory decisions and
technological changes have devastated the inde-
pendent ISP market. Today, end users purchasing
wireline broadband service generally purchase an
integrated transmission and Internet access service
from a facilities-based telecommunications or
cable company.
In the controversial 2005 order, the FCC pro-
vided several reasons for its policy of deregulation
of the facilities-based wireline broadband Internet
access market (FCC, 2005a). In general, the FCC
determined that federal regulations, as outline in
Computer II, were no longer necessary to protect
against anticompetitive behavior and, moreover,
were believed to be affirmatively harmful for the
development of next generation wireline networks.
First, the FCC recognized that, in general,
the telecommunications platform is no longer
monopolized, given the emergence of competition
between telephone and cable platforms as a result
of the convergence of different platform technolo-
gies adopting the Internet Protocol (IP). As com-
munications platforms originally built to provide
one service were upgraded with the inclusion of
digital technologies, packet switches, and fiber
optic technology, the next generation version of
these networks were capable of providing multiple
services by use of a common standard employing
the IP. Adherence to a common standard enables
various publicly and privately owned networks to
communicate with each other and creates an open
platform for applications innovation. Telephone
companies now provide video services as well as
voice, and cable companies provide voice services
as well as video. All of these services become the
equivalent of data services. More importantly,
these two platforms compete in the provision
of broadband Internet access services. Modern
communication platforms are now composed of
an underlying physical transmission layer (such
as fiber optic lines, copper lines, coaxial cable
lines) upon which upper layer applications (such
as instant messaging, Internet browser, Voice over
Internet Protocol, Video over Internet Protocol)
and content services (such as movies, short film
clips and television shows) are provisioned. The
lower physical layer and the upper layer applica-
tions and content are built to work with each other
using the IP.
Second, the FCC predicted that emerging
technologies would provide new facilities-based
platforms to compete with the wireline telecom-
munications and cable platforms. For instance,
publicly and privately funded wireless networks
are developing Internet access capabilities, satel-
lite companies offer Internet access, and power
companies were predicted to upgrade their net-
works to provide Internet access service. Thus,
the FCC viewed the Internet access market as one
with two existing, strong competitors with their
own facilities and potential competitors on the
precipice of becoming significant competitors,
all to the benefit of demanders for broadband In-
ternet access service. This reflects a tendency on
the part of the FCC to merely count the number
of competing platforms rather than conduct a real
economic market analysis to determine what forms
of Internet access are close substitutes in the eyes
of end users in actual geographic markets.
Third, the FCC, citing Section 706 of the 1996
Telecommunications Act, placed a very high prior-
ity on stimulating investments in next generation
broadband networks and wished to eliminate what
it considered to be unnecessary hindrances to their
deployment. To order to accomplish this infra-
structure goal, the FCC eliminated the sharing of
facilities regulations that the incumbent telecom-
munications companies had argued reduced their
incentive and that of non-facilities-based ISPs to
Search WWH ::
Custom Search