U.S. Broadband Infrastructure Gets Review in Brookings Paper

Videoconferencing, videotelephony, Internet-based audio and video entertainment, local wireless data services and telecommuting — all are part of the "last mile" broadband services that Charles Ferguson assesses in a recent working paper for The Brookings Institution.

In The United States Broadband Problem: Analysis and Policy Recommendations, Ferguson argues that broadband services are hampered by a slow rate of deployment and technological progress. Monopolistic structure, entrenched management and political power of the incumbent local exchange carrier (ILEC) and cable television (CATV) sectors, he says, are principally responsible for the problem. Moreover, these industries are "worsened by major deficiencies in the policy and regulatory systems covering (them)."

Ferguson observes that the rate of technological progress generally has declined since the Telecommunications Act of 1996, a measure that was expected to yield "a modern, decentralized, competitive, and technologically dynamic industry." The ILEC and CATV industries, he states, are largely dominant and tend not to compete with each other. And, saying that less than 15 percent of U.S. residences have faster Internet access via cable modems or ADSL, Ferguson asserts the state of broadband digital infrastructure "is indeed a problem."

If broadband performance is not improved, Ferguson contends, then U.S. productivity growth may decrease at least 1 percent each year. He adds that other areas such as public safety, military preparedness and energy security might also be adversely affected and that a major broadband bottleneck will further digital divide problems.

Ferguson addresses the need for structural reforms in industry, policy and regulatory systems. Among his policy recommendations are:

• "Structural separation of switching, enhanced services and data transport in the telephone industry"
• "Divestiture of content from transmission in the CATV sector"
• "Mandatory open interfaces for interconnection"
• "Increased financial transparency and disclosure" and,
• "Reforms in regulatory systems to increase their efficiency, high technology expertise and political independence."

The United States Broadband Problem: Analysis and Policy Recommendations is available at: http://www.brookings.edu/views/papers/ferguson/working_paper_20020531.pdf