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CHAPTER I - SETTING THE STAGE

Competition has been central to communications policy since the origins of the telephone. In 19th century Britain, where complaints about service were pervasive, it was seen as “axiomatic…that telephony must necessarily be a monopoly.”1 The earliest American telephone industry pioneers were quick to identify and seize network bottlenecks as a way to exert market power. In 1907, Theodore Vail declared that the “telephone man of the day wanted the exchange rights” to control interconnection of local calls to the long distance network.2 At the same time, the battleground of interconnection also contributed to the build out of a “geographically ubiquitous telephone infrastructure” that gave the phrase “universal service” its early meaning.3 Thus began a long-standing communications policy tension: successful firms, secure in their market power, might not have sufficient incentives to invest in network improvements.

This situation gives technology the role of double-edge sword in the drama of competition in the communications market. Those companies on the cutting edge can—and do—win dominant places in the markets they enter. This, however, comes with it the risk for complacency, as dominant incumbents see little reason to invest to stay ahead of the competition. Yet this dynamic is a risk, not a certainty. A concentrated market structure may not, under certain conditions, mean innovation takes a back seat. If a market is not competitive in the textbook sense, can it nonetheless call forth the investment necessary for future innovation?

The 2015 Aspen Institute Conference on Communications Policy addressed how these long-standing dynamics in communications markets are playing out in the 21st century. Since the beginning of the 21st century, broadband has rapidly become a crucial infrastructure for commerce, civic engagement and social life. High speed Internet connectivity ushered in changes to various dimensions of society at the same time the technology itself—and the uses people and business put to it—has evolved.

These deep and disparate impacts invite scrutiny from policymakers and stakeholders in the private sector and civil society. Are policies in place that support continued investment in broadband? Are equity issues—such as whether enough people have adopted broadband or whether enough places have access at sufficient speeds—receiving enough attention? And, not least, is the marketplace for broadband services vibrant enough to support bandwidth abundance, a term that captures the expectations of many stakeholders for the role the technology can play in economic and social development?

As participants met to consider the future of broadband competition, they recognized that the broadband ecosystem has seen significant progress in recent years. Private sector investment is strong, with steady advances in adoption of new services by consumers and significant network upgrades in many parts of the country. Against this progress, however, were worries that fell into three categories:

  • Competition: Will markets for broadband service be stagnant monopolies or vibrant duopolies?
  • Adoption and Use: Today’s gaps in adoption of home broad- band remain significant and existing mechanisms to close them may not scale to address the size of the problem.
  • Consumer Protection: There is a sense of “data vulnerability” among consumers as well as worry about customer service— and these concerns may inhibit development and adoption of next generation technology tools.

After exploring these three issues, conference attendees presented proposals to address each of them:

  • For competition, develop a playbook for states and localities to follow to take steps to lower the cost of deployment of new networks.
  • To encourage greater adoption of broadband, create a voucher program by which eligible low-income consumers purchase service, with opportunities for consumers to receive training on the Internet.
  • To address consumer protection, create a Federal Information Security Coordinator (FISC) as a means to mitigate consumers’ “data vulnerability,” though attendees did not reach a consensus on the merits of this idea.

FOOTNOTES
1 Charles Perry, “The British Experience,” in Ithiel de Sola Pool The Social Impact of the Telephone. Cambridge, MA: MIT Press, 1977, p. 81.

2 Gerald Brock, Telecommunications Policy for the Information Age. Cambridge, MA: Harvard University Press, 1994, p. 62.

3 Milton Mueller, Universal Service: Competition, Interconnection and Monopoly in the Making of American Telephone System. MIT/AEI Press, 1997, p. 6.

 
 
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