Part 2: Universal Internet Access Robert Cannon Senior Counsel for Internet Issues Office of Plans and Policy US Federal Communications Commission

Standard Disclaimer Views expressed are Robert Cannon’s and do not necessarily represent those of the FCC, the Commissioners, or its staff.

“A Nascent Industry”

1991

1997

Source: Matrix.net Logarithmic

Distribution of ISPs September

Distribution of ISPs October

Number of Internet Hosts Source: Matrix.Net

% % 25-50% Decrease Source: Matrix.net

Online Populations Source: Morgan Stanley Dean Witter, The Global Internet Primer (June 2000) Million

North American Backbone Providers Source: Boardwatch Magazine Number of Providers

Backbone Market Source: OECD

Factors for Internet Deployment Telecommunications Pricing Universal Telecommunications Service Customer Premises Equipment Market (Modems) Computer Inquires: Telecom Safeguards –Open Platform / Bottlenecks –Anticompetitive Behavior

Telecommunications Pricing

40 Hours US$ PPP (off-peak), September /

Internet subscribers and pricing

Internet Development and Pricing

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

US Telecom Universal Service Historical Telephone Penetration Estimates Source: FCC Great Depression

Deregulation of CPE Carterphone 1959: connects radio to telephone FCC overturns AT&T tariff that prohibits interconnection Standardize as Part 68 Result in vibrant modem market

Computer Inquires Recap 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

Resulting Market Low Barriers to Entry Telecom ISPs Many 1000s of Content and Application Providers

Mistakes We Have Made...

I think there is room in the world for maybe five computers. - Thomas Watson Sr., Chairman of IBM Corp 1943

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.

Source: Matrix.net Internet Bitnet ARPANet

Community Networks Bandwidth v. Content Training Community Empowerment Promote Local –Communication –Economy –Health E-Democracy Not a global shopping mall Creators not Consumers Telecommunity Resource Center Gene Crick

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 (E.D.Pa June 11, 1996), affirmed, No. 96–511(S.Ct. June 26, 1997)

Strategy of Universal Access Through Local Access Points E-rate

Schools and Libraries Program Discount Matrix

Schools and Libraries Program Process Contract Forms Money School Service Provider Universal Service Administrator

Schools and Libraries Program What 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

Schools with Internet Access Percent E-Rate School and Library Internet Access Subsidies: 84% funding has gone to public schools $4B has been distributed

Timeline TCP/IP Invented DNS IAB W3C TCP/IP Comp III

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

Potential Policy Solutions Texas Ability to Pay Population Density Low High Technology, Demand Aggregation Competition Loan and Tax Incentive Programs, Community Networking, Social Contracts Grant Development, Economic and Community Development Initiatives Source: Brett Perlman, Texas Public Utility Commission

Thank You... Robert Cannon Senior Counsel for Internet Issues FCC Office of Plans and Policy

Schools and Libraries Program Resources FCC School & Libraries Program website Universal Service Administrator’s SL Website Merit.Net The New Universal Service: NTIA's Guide for Users