One of the great success stories of the 1996 Telecommunications Act is the booming growth in business broadband services, an integral element of the nation’s economic competitiveness. The enormous competition that flowed from the policies Congress adopted are explored in the second of three USTelecom white papers examining the business broadband marketplace.
The legislation was built upon the premise that meaningful long-term competition in the business marketplace would emerge only if competitors built their own facilities to compete with the then-dominant incumbent companies. To ensure that service providers retained a lasting incentive to build their own facilities, Congress placed limits on their ability to obtain access to incumbent carriers’ networks.
Today there are a variety of entities competing in this market:
- Cable – Most recently, the marketplace entry of the nation’s major cable operators – the same companies that increasingly dominate the provision of wired broadband services to consumers – has changed the game. Today, the business units of the nation’s largest cable operators – Time Warner Cable, Comcast, and Cox – are the fifth, sixth, and eighth largest providers of business Ethernet services in the United States, respectively. As cable television subscriptions decline among ordinary consumers, the cable industry views the business marketplace as a critical area for future growth.
- Fixed wireless – Improvements in technology have made fixed wireless services an attractive option for extending network capabilities. Once avoided because of connectivity problems if signals were not within a proper line of sight from receivers, today’s technologies work well, particularly in urban settings. Naval officers and high-frequency traders are comfortable relying upon the technology.
- Fiber-based competitive local exchange carriers (CLECs) – have also continued to expand and thrive. Through natural consolidation and organic growth, “Mega CLECs” have reshaped the marketplace, boasting footprints that stretch from coast to coast. One of these – Level 3 – now ranks as the second largest provider of Ethernet services nationwide, ahead of both Verizon and CenturyLink, two of the three remaining large incumbent carriers.
Some CLECs complain that current policies are hurting their ability to deploy broadband to more business locations, and they want the Federal Communications Commission (FCC) to intervene on their behalf. Yet outside of Washington, CLECs tout their economic prosperity and growth. Like cable operators, CLECs are on an expansion spree, extending their fiber networks to additional locations throughout the country. This incongruity will be explored in the third white paper.
See the white papers for a fuller discussion:
- The Broadband Internet Economy is Thriving
- The Competitive Business Broadband Marketplace
- The FCC Should Not Pick Winners and Losers