Berkman Center Broadband Study

Thomas W. HazlettProfessor of Law & Economicsthazlett@gmu.eduhttp://mason.gmu.edu/~thazlett/

Federal Communications CommissionDecember 10, 2009

Three Areas to Discuss

• Econometric and data issues• Global broadband rankings • Natural experiments in U.S. broadband

Global Broadband Race

Three Broadband Regimes

Period Cable Modems Telecoms/DSL

Three Broadband Regimes

Period Cable Modems Telecoms/DSL

unregulated

unregulated

unregulated

Three Broadband Regimes

Period Cable Modems Telecoms/DSL

until 1Q2003 unregulatedregulated with “line sharing”

obligation

unregulated

unregulated

Three Broadband Regimes

Period Cable Modems Telecoms/DSL

until 1Q2003 unregulatedregulated with “line sharing”

obligation1Q2003 to

3Q2005 unregulatedregulated but

no “line sharing”

unregulated

Three Broadband Regimes

Period Cable Modems Telecoms/DSL

until 1Q2003 unregulatedregulated with “line sharing”

obligation1Q2003 to

3Q2005 unregulatedregulated but

no “line sharing”

3Q2005 topresent unregulated deregulated

1st Period: Cable Dominates

0

2

4

6

8

10

12D

ec-9

9

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

ADSL (inmillions)Cable Modem(in millions)

Subs

crib

ers (

in m

illio

ns)

Causality asserted by the FCC• “[W]e don't have a duopoly in broadband.

We don't even have a monopoly in broadband. We have a ‘no-opoly.’ 

• “So how do we get Americans broadband pipes? .. [B]y letting a competitive marketplace thrive.”

– FCC Chairman William E. Kennard (No. Calif. FCBA, San Francisco, CA, July 20, 1999)

• and rejecting “open access” rules

2nd Period: DSL Surges

-5

0

5

10

15

20

25

30

351Q

99

3Q99

1Q00

3Q00

1Q01

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

DSL

Cable

DSL 'Line Sharing' Dereg

65% above trend

Num

ber

of S

ubsc

ribe

rs (i

n m

illio

ns) 11%

above trend

3rd Period: DSL Surges Again

-5

0

5

10

15

20

25

30

1Q99

3Q99

1Q00

3Q00

1Q01

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

DSL

Cable

DSL Dereg II

TrendII

DSL 'Line Sharing' Dereg 12%

above trend

Num

ber

of S

ubsc

ribe

rs (i

n m

illio

ns)

1% above trend

'Line Sharing'

Trend

FTTH Deployment in USA

0

2 ,0 0 0

4 ,0 0 0

6 ,0 0 0

8 ,0 0 0

1 0 ,0 0 0

1 2 ,0 0 0

1 4 ,0 0 0

1 6 ,0 0 0

H om es P as s ed (in thous ands )

H om es C onnec ted (in thous ands )

Pre- and Post-Deregulation

0

2 ,0 0 0

4 ,0 0 0

6 ,0 0 0

8 ,0 0 0

1 0 ,0 0 0

1 2 ,0 0 0

1 4 ,0 0 0

1 6 ,0 0 0

H om es P as s ed (in thous ands )

H om es C onnec ted (in thous ands )

FCC pre-empts fiber unbundling requirements

Causality ascribed

Thank you.