Comparative Telecommunications Law Spring, 2007 Prof. Karl Manheim 12: Broadband Copyright © 2007

Spring 2007CTL2 Overview Broadband defined High speed packet transport  User connection to the Internet backbone  Typically 256 kb/s, up to several Mb/s Uses of Broadband Voice (telephony), text, data Multimedia  Audio (streaming, podcasting), Video on demand Interactive; collaboration Application processing; innovation

Spring 2007CTL3 Telephony Convergence Data Traditional View Cable Broadcast Wireless

Spring 2007CTL4 Data Voice Convergence Web Reality Video File Transfer Content Cable Wireless Satellite Fiber Devices Apps Users

Spring 2007CTL5 Convergence

Spring 2007CTL6 Broadband Deployment

Spring 2007CTL7 Broadband Deployment

Spring 2007CTL8 Overview Broadband Technologies Fiber (FTH) Leased line (copper)  T1 (1.5mbps) or T3 (7.5+) Cable (coaxial)  mbps DSL (phone line)  kbps Wireless (fixed and mobile)  Comparable to DSL

Spring 2007CTL9 Broadband to the Home Base Station Satellite Monitoring Station Electric line Cable Headend Cable Central Office Phone line Mobile Switching Center Wireless

Spring 2007CTL10 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 usually terminates at telco facility (CO) or cable head end  FTH is very expensive (~$4,000 per termination) Last mile is usually copper wire  Coaxial or phone line  Owned/operated by cable company or telco

Spring 2007CTL11 The “Last Mile” The economic problem Cable/telcos are monopolies  With high capital investment costs Can reap monopoly rents  Keep competitors out  Bundle services Transport services ISP services (DNS, ) Value added services Chat rooms, info svcs

Spring 2007CTL12 The “Last Mile” The regulatory problem (solution) Price constraints  Price Regulation (e.g., by PUC or FCC)  Competition Open Access requirements (forced infrastructure leasing) Substitutable technologies Fixed/mobile wireless Satellite Internet Interconnection requirements on LECs  Enabling competition  Applies to DSL, not cable broadband or fixed wireless

Spring 2007CTL13 The “Last Mile” The regulatory problem (solution) Spectrum Management  Takes on greater urgency with broadband  New NRAs created to manage wireless broadband See ITU Best Practices guidelines (2005)ITU Best Practices guidelines Fixed and mobile wireless broadband  Band clearing  Band flexibility

Spring 2007CTL14 Case Study - Cable Broadband Physical Capacity Each video channel Mhz/Ch) redeployed for Internet use could service customers $30-50 each per month Capitalized present value = $10,000 Portland Case City of Portland mandated “open access”  Cable co’s must rent transport space to ind. ISPs  Pursuant to local franchise authority over cable AT&T claims preemption by TCA and FCC reg.

Spring 2007CTL15 Case Study - Cable Broadband Interconnection (open access) regulation Telecommunications Providers (LECs): by FCC “Cable” companies: by FCC & local franchise Information Service Providers: unregulated AT&T v. Portland (9 th Cir. 2000) Cable broadband is both telecom & info service  As telco, competitors had interconnection rights (enforceable by FCC), but Portland is preempted  As info service, AT&T not subject to regulation  Not cable company; no local franchise power NB: FCC hadn’t previously ruled on this issue

Spring 2007CTL16 NCTA v. Brand X (USSC 2005) FCC rulemaking post AT&T v. Portland Rules cable bband is only “information service” Second review by 9th Cir. Selected by lottery (multidistrict litigation) 9th Cir reverses FCC  Agency not entitled to exercise discretion  Law of the Case In an ongoing case, interlocutory rulings by a higher court must be followed by lower courts & agencies Compare stare decisis

Spring 2007CTL17 NCTA v. Brand X (USSC 2005) Chevron issues (1) Whether TCA is clear on “telecom service”  If so, courts are are better able to interpret statute  Thus, earlier 9th Cir. decision is binding (2) If TCA is unclear (ambiguous)  courts should defer to agency expertise (once rulemaking proceedings are complete) Earlier 9th Cir. Decision was simply its own discretionary interpretation of TCA, which must yield to agency Law of the case would not apply Reexamine deference in light of agency capture

Spring 2007CTL18 Voice & Switched Data Public Circuit Switched & Packet Switched Networks ILEC Central Office Circuit Switch ATM Switch or Router Add DSL modems in Central Office and in the customer premises DSLAM and Splitter DSL - Digital Subscriber Line Upgrading the LEC for DSL

Spring 2007CTL19 ADSL Over POTS FREQUENCY (kHz) ADSL DOWNSTREAM ADSL UPSTREAM VOICE Determined by the Line Rate Line Splitting enables CLECs to compete for the RESIDENTIAL consumer

Spring 2007CTL20 DSL Line sharing Voice transport uses low frequency signal  Ordinary “dial-up” Modem uses same low frequency  Limited to 56 kb/s High frequency signal can be sent on same line  Throughput typically at least 384kb up; 128kb down Signals must be combined/split at both ends  Home: DSL modem  CSO (telco office): line filter before switches DSLAM (Digital Subscriber Line Access Multiplexer) (“stinger”) Packet switching networks

Spring 2007CTL21 DSLAM

Spring 2007CTL22 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’s TELRIC (cost recovery) formula Unbundling removes ILEC monopoly, even though it still owns the physical infrastructure

Spring 2007CTL23 FCC DSL Ruling (Mar. 25, 2005) How does unbundling apply to DSL? Line sharing order (1999)  High freqency portion of loop is a “network element”  ILECs must lease HFPL as UNE to CLECs Whether or not CLEC is also providing voice services That’s why Yahoo, AOL, etc. can provide DSL services over your local telcos local loop  But DSLAM and packet switching are not UNEs CLECs can provide own switching equipment (collocation) Must ILEC offer HFPL to CLEC voice customers?  No; nothing in TCA requires ILECs to provide DSL

Spring 2007CTL24 ADSL Modem/ Splitter Voice & Switched Data Copper Loop - DSL Capable Voice & Switched Data ILEC Remote Terminal Voice Data & IP Voice DSLAM and Splitter Public Circuit Switched & Packet Switched Networks Data Data & IP Voice ILEC Central Office ADSL Modem/ Splitter Fiber FOTSFOTS FOTSFOTS ATM Switch or Router DSLAM and Splitter Circuit Switch DACS Copper Loop - DSL Capable X-Connect, Router, etc. ILEC Deployment of ADSL

Spring 2007CTL25 Voice & Switched Data Voice & Switched Data ILEC Remote Terminal Voice Data & IP Voice DSLAM and Splitter Public Circuit Switched & Packet Switched Networks Data Data & IP Voice ILEC Central Office CLEC Collocation ADSL Modem/ Splitter X-Connect, Router, etc. Fiber FOTSFOTS FOTSFOTS ATM Switch or Router DSLAM and Splitter Circuit Switch DACS Copper Loop - DSL Capable ADSL Modem/ Splitter DSLAM and Splitter 1)Purchase of DSL Capable Loop (UNE); CLEC Provides Collocated DSLAM/Splitter in CO UNE - Unbundled Network Elements Copper Loop - DSL Capable X-Connect, Router, etc. CLEC Options Using ILEC Lines

Spring 2007CTL26 Wireless Broadband Mobile Cellular (3G) Air-Ground  800 MHz band (previously cellular - AMPS)  Auction pending Fixed Broadcast (2dary) MMDS Satellite

Spring 2007CTL27 Fixed Wireless Six Base Stations provide 360-degree coverage, delivering up to 360 Mbps per hub site, and connections to Service Providers. The point-to-multipoint communications may range to 13 Km.

Spring 2007CTL28 Interconnection in EU Access Directive (2002/19/EC) Implemented by Nat’l Regulatory Authorities Interconnection rights & obligations Access to UNEs Non-discrimination  Transnational Transparency  No cross/hidden subsidies Cost-recovery pricing  Compare TELRIC