Wednesday, March 28, 2018
Douglas Sicker, Carnegie Mellon University, and University of Colorado, Boulder, Department of Computer Science, and William Lehr, Massachusetts Institute of Technology; Computer Science and Artificial Intelligence Laboratory, have published Telecom Déjà Vu: A Model for Sharing in Broadband Access. Here is the abstract.
There is significant debate over whether there remains a last-mile broadband bottleneck. In this paper we explore what might be the nature of this bottleneck and review options for regulatory responses, building on earlier work on how this fits within the larger context of communications policy reform. We include "déjà vu" in the title because the last-mile bottleneck challenge is hardly a new problem. Implementing a policy response to it was a major factor underpinning the enactment of the legislative reforms embodied in the Telecommunications Act of 1996 (TA96) and inspired proposals for corporate divestitures to create "LoopCos," including helping to motivate the restructuring of British Telecommunications into OpenReach. Earlier proposals for Open Network Interconnection and more recently the debate over Network Neutrality rules are part of this long and continuing telecommunications policy debate. Throughout this long debate there have been continued challenges to the core premise of whether, in fact, last-mile access poses an economic bottleneck that justifies a regulatory response, and if so, whether there exists a response that might actually help rather than further aggravate the economic situation. Many of those supporting activist interventions such as the unbundling and resale provisions imposed on incumbent local exchange carriers (ILECs) as part of the TA96 or the restrictions on network management practices embodied in the FCC's 2016 Open Internet Order argue that the incumbent providers have excessive market power, while those opposed to such interventions argue that either technical or market developments have already or soon will eliminate(d) the last-mile bottleneck, or that the proposed remedies are worse than the prospective harms. These on-going arguments have persisted over decades that have witnessed significant changes in the communications technologies, markets, industry structure and policy frameworks. As we confront this issue anew, in light of the challenge of what sorts of policy interventions may be needed to confront our broadband Internet future, it is worthwhile considering what the earlier debates and experiences may teach us about the range of policy options. As in our earlier work that looked at the overall agenda for communications policy reform, we eschew consideration of political and legacy reform problems (while recognizing that these will be critical factors in deciding what may actually occur), focusing instead on assessing the range of engineering and business/economic options that would be available in a greenfield approach. In this paper, our focus is limited to identifying the nature of the last-mile bottleneck and the challenges of implementing a suitable framework for managing shared access to broadband platforms in light of current technology and market expectations. In too much of the debate, discussants have not been adequately clear in specifying their theoretic or policy goal assumptions regarding the nature of the bottleneck and their standards for determining the circumstances or metrics for assessing whether regulatory intervention would even be justified. We believe a range of reasonable views are possible and that being clear about these assumptions and theoretic constructs will assist in reviewing the historic lessons and summarizing the available options. In so doing, we hope to refocus the discussion on the forest and help policymakers from getting lost in the trees.
The text is not available from SSRN.