WPCs"  2MBVRKZ3|j 7jC:, Xj\  P6G;XP"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdHP LaserJet 4M (PCL)iptHPLA4MPC.PRSXj\  P6G;\!%tAXP2Lh)Kx X-#Xj\  P6G; XP#X01Í ÍX01Í Í3|j "i~'^?JWllJJJly8J8=llllllllll==yyy_ǜyJRyy̜J=JdlJ_l_l_Jll==l=llllJR=llll_h+huJ8udJJJ8JJJJJJJJl=__________J=J=J=J=llllllllll_ljlllyl_____u_____lllululJ=JlJJJlyuul=WJJ=lllllJJJyRyRyRyu[=dllllll̜u___lJlyRJl8llH'HWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNNNdlJ_lllll=ElAElAJJ__lJJllԄNقNyyJ_lA"lق~ulyԂlCourierTimes New RomanTimes New Roman BoldTimes New Roman ItalicMarigoldAlbertusUniversTimes New Roman Bold ItalicCourier Italic2'K~&K #K K_"i~'^FRxxRRRx>R>CxxxxxxxxxxRRx⭞[x⭻𭭞RCRxRxjjRxCRCʆxj[Rxxxj`5`}R>}RRR>RRRRRRxRCxxxxxjjjjjYCYCYCYCxxxxxxxxxxxxxjj}jjjjjxxx}x[C[[R[†}}ClR`Cxxjjj[[[}zR}jjjR[Rx>xxPAPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNVVxRxxxxxxHRxHRxHRRxxxRRxxVVȆRxxH"x𐎂x됐x"i~'^"*22TN"""2D"2222222222""DDD2\>>BH>>HH",B8TBH>H>28H>T>88&&*2"22,2,22,H2222&&2,B,,&((6"6*"""""""""2"2>2>2>2>2>2XBB,>,>,>,>,""""B2H2H2H2H2H2H2H2H28,>2H2H2H28,H2>2>2>2>2B,B,B6B,H<>,>,>,>,H2H2H2H6H2H6H2""2"""2L266B,88$8"8 8B2:B2B2H2H2^B>&>&>&2&2&2&668$88*H2H2H2H2H2H2TB868&8&8&H28"B22&8"82<22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFddddddddddddddddddddddddddddddddddddddddN$<<$42&22222b2 LL2 LL2L""882X""R>CxxxxxxxxxxCCjݭR[ӭ⭭RCRnxRjxjxjRxxCCxCxxxxR[Cxxxxjs0sR>nRRR>RRRRRRRRxCjjjjjӜjjjjjRCRCRCRCxxxxxxxxxxjxvxxxxjjjjjjjjjjxxxxxRCRxRRRxxC`RRCxxxxxӭRRR[[[eCnxxxxxx⭭jjjxRx[Rx>xxP+PWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNVVnxRjxxxxxCMxHMxHRRjjxRRxx듶VVȆRjxH"x𐋂x됐x"i~'^'3KCCph---CK#-#%CCCCCCCCCC--KKKCpXXX`XX`h3CXSu``S`XKS`XuXSS-%-KC-CC;C;-CK%%C%hKCCC33%K;XC;3--K-#KK---#------C-C%XCXCXCXCXC}`X;X;X;X;X;3%3%3%3%`K`C`C`C`C`K`K`K`KS;XC`C`C`CS;`CSCXCXCXCX;X;XKX;`cX;X;X;X;`C`C`C`K`ChKhK3%3C3-3CmKKKXCS%SES-S3S%`K]`K`K`C`C}`X3X3X3K3K3K3KKSHS%SK`K`K`K`K`K`KuXSKS3S3S3`CS-`KK3S-SCc#CC,%,W]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]ddddddddddddddddddddddddddddddddddddddddN0PP0CC3CCCCCC#(eeC(-ccCe(--CCC..PCCQe0PP0MooKK-CCp("XXXXee{CePXHCKPPC2KK'KrK"i~'^09]SS999S]+9+/SSSSSSSSSS99]]]Sxnxxng?Snxgx]nxxxxn9/9aS9S]I]I9S]/9]/]S]]I?9]SxSSIC%CW9+Wa999+999999S9]/xSxSxSxSxSxxInInInInI>/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN<.<<<<a݅@  I.   X(# SubheadingSubheading#0\ E A.  2H@$^=%d7>&>'?FOOTNOTEFootnote - Appearance$PHIGHLIGHT 1Italics and Boldldedd%+. DRAFT ONHeader A Text = DRAFT and Date& X =8` (#FDRAFTă r  ` (#=D3 1, 43 12pt (Z)(PC-8))T2Dă  ӟDRAFT OFFTurn Draft Style off'@@    2eD(Xz@)1@*1B+14CHEADERHeader A - Appearance(LETTER LANDLetter Landscape - 11 x 8.5) 3'3'Standard'3'3StandardLetter Portrait - 8.5 x 11 ;   LEGAL LANDLegal Landscape - 14 x 8.5*f 3'3'Standard'A'AStandardZ K e6VE L"nu;   LETTER PORTLetter Portrait - 8.5 x 11+L 3'3'Standard3'3'StandardZ K e6VE L"nU9   2G,1D-nE.X6F/FLEGAL PORTLegal Portrait - 8.5 x 14, 3'3'StandardA'A'StandardLetter Portrait - 8.5 x 119   TITLETitle of a Document-K\ * ăFOOTERFooter A - Appearanced.BLOCK QUOTESmall, single-spaced, indented/N X 2J0iAG1dG2jH3xHHEADING 33rd Heading Level0| XHIGHLIGHT 2Large and Bold Large1B*d. HIGHLIGHT 3Large, Italicized and Underscored2 V -qLETTERHEADLetterhead - date/margins3u H XX  3'3'LetterheadZ K e VE L"n3'3'LetterheadZ K e VE L"nE9    * 3'3'LetterheadZ K e VE L"n3' II"n"Tv3'StandarddZ K e VE L"nU9 Ѓ   2O4EJ5-L68;M78sNINVOICE FEETFee Amount for Math Invoice4 ,, $0$0  MEMORANDUMMemo Page Format5D.   ! M E M O R A N D U M ă r  y<N dddy   INVOICE EXPSEExpense Subtotals for Math Invoice6:A ,p, $0$00INVOICE TOTTotals Invoice for Math Macro7z 4p, $0$002R8O9X~Q:[Q;[1RINVOICE HEADRHeading Portion of Math Invoice8+C`*   4X 99L$0 **(  ӧ XX NORMALReturn to Normal Typestyle9SMALLSmall Typestyle:FINEFine Typestyle;2RU<[R=[S>[tS?SLARGELarge Typestyle<EXTRA LARGEExtra Large Typestyle=VERY LARGEVery Large Typestyle>ENVELOPEStandard Business Envelope with Header?+w ,,EnvelopeZ K e VE L"n,,EnvelopeLarge, Italicized and Under;    ,, 88+  `   2tW@XUAXUB4VCVMACNormal@,.1AdfStyle 14Swiss 8 Pt Without MarginsB$$D Co> PfQ  )a [ PfQO Style 12Dutch Italics 11.5C$$F )^ `> XifQ  )a [ PfQO 2_DWEl\F]G^Style 11Initial Codes for Advanced IIDJ )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 ! )^ `> XifQ ` Advanced Legal WordPerfect II Learning Guide   x )^ `> XifQ Advanced Legal WordPerfect II Learning Guide   j-n )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  jBX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 3oDutch Roman 11.5 with Margins/TabsE )a [ PfQO  ddn  # c0*b, oT9 !Style 4 PSwiss 8 Point with MarginsFDq Co> PfQ  dddd  #  Style 1.5Dutch Roman 11.5 FontG4h )a [ PfQO  dddn 2aH|K_I_Jg`KaStyle 2Dutch Italic 11.5H$ )^ `> XifQ Style 5Dutch Bold 18 PointI$RH$L T~> pfQ_  )a [ PfQO Style 7Swiss 11.5J$$V )ao> PfQ ]  )a [ PfQO Style 6Dutch Roman 14 PointK$$N w [ PfQ   )a [ PfQO 2vLaMfNkOpStyle 10oInitial Codes for AdvancedL U )a [ PfQK  dddn  ##  [[ b, oT9 !b, oT9 !n )^ `> XifQ ` Advanced Legal WordPerfect Learning Guide   f )^ `> XifQ Advanced Legal WordPerfect Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  QN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 8PfInitial Codes for BeginninggMi )a [ PfQK  dddn  # X` hp x (#%'b, oT9  [ &e )^ `> XifQ ` Beginning Legal WordPerfect Learning Guide   d )^ `> XifQ Beginning Legal WordPerfect Learning Guide   jH )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  j )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 9Initial Codes for IntermediateN )a [ PfQK  dddn  # X` hp x (#%'b, oT9 Њ [ e )^ `> XifQ ` Intermediate Legal WordPerfect Learning Guide   3 )^ `> XifQ Intermediate Legal WordPerfect Learning Guide   jf )^ `> XifQ    Copyright  Portola Systems, Inc.`+ >Page  jX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 UpdateInitial Codes for Update ModuleO )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 !n )^ `> XifQ ` Legal WordPerfect 5.0 Update Class Learning Guide   f )^ `> XifQ Legal WordPerfect 5.0 Update Class Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`7 CPage  jN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2KxP4vQ}vR0wSwhead1 #P'd#2p}wC@ #a1Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfQ$ a2Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfR/` ` ` a3Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfS:` ` `  27{T}xUyVyWxza4Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfTE` ` `  a5Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfUP  ` ` ` hhh a6Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfV[   a7Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfWf  2y}Xi{Yp3|Zq|[e}a8Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfXq Document[8]C^iDocument StyleNeF2CC -2( -Ct )BY` ` ` Document[4]C^iDocument StyleNeF2CCW -2( -Ct )BZ  . Document[6]C^iDocument StyleNeF2CCe -2( -Ct )B[  2\e}]~^p~_Document[5]C^iDocument StyleNeF2CCs -2( -Ct )B\  Document[2]C^iDocument StyleNeF2CC -2( -Ct )B]*    Document[7]C^iDocument StyleNeF2CC -2( -Ct )B^  ` ` ` Right Par[1]C^iRight-Aligned Paragraph Numbers -2( -Ct )B_8@  2X`arbcRight Par[2]C^iRight-Aligned Paragraph Numbers -2( -Ct )B`A@` ` `  ` ` ` Document[3]C^iDocument StyleNeF2CC -2( -Ct )Ba0     Right Par[3]C^iRight-Aligned Paragraph Numbers -2( -Ct )BbJ` ` ` @  ` ` ` Right Par[4]C^iRight-Aligned Paragraph Numbers -2( -Ct )BcS` ` `  @  2de@fgDŽRight Par[5]C^iRight-Aligned Paragraph Numbers -2( -Ct )Bd\` ` `  @hhh hhh Right Par[6]C^iRight-Aligned Paragraph Numbers -2( -Ct )Bee` ` `  hhh@ hhh Right Par[7]C^iRight-Aligned Paragraph Numbers  -2( -Ct )Bfn` ` `  hhh@  Right Par[8]C^iRight-Aligned Paragraph Numbers -2( -Ct )Bgw ` ` `  hhh@ppp ppp 2*hʅij kDocument[1]C^iDocument StyleNeF2CCE -2( -Ct )BhF34   ׃  Technical[5]C^iTechnical Document StyleCCS -2( -Ct )Bi&56  . Technical[6]C^iTechnical Document StyleCCa -2( -Ct )Bj&78  . Technical[2]C^iTechnical Document StyleCCo -2( -Ct )Bk*9:    2l\mno5Technical[3]C^iTechnical Document StyleCC} -2( -Ct )Bl';<   Technical[4]C^iTechnical Document StyleCC -2( -Ct )Bm&=>   Technical[1]C^iTechnical Document StyleCC -2( -Ct )Bn4?$@     Technical[7]C^iTechnical Document StyleCC -2( -Ct )Bo&AB  . 2 pq}qrsvTechnical[8]C^iTechnical Document StyleCC -2( -Ct )Bp&CD  . Paragraph[1]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Bq$ab Paragraph[2]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Br/cd` ` ` Paragraph[3]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Bs:ef` ` `  2t;uٍvw6Paragraph[4]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )BtEgh` ` `  Paragraph[5]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )BuPij` ` ` hhh Paragraph[6]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Bv[kl Paragraph[7]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Bwfmn 2x'yz{ɓParagraph[8]C^i1. a. i. (1) (a) (i) 1) a)C -2( -Ct )Bxqop Default Paragraph FoDefault Paragraph Fonty11#XP\  P6QXP##C\  P6QP#toc 1toc 1z` hp x (#44` hp x (#toc 2toc 2{` hp x (#4 4 ` hp x (#2|}7~Ustoc 3toc 3|` hp x (#4 4 ` hp x (#toc 4toc 4}` hp x (#4 <4 <` hp x (#toc 5toc 5~` hp x (#4<4<` hp x (#toc 6toc 6` hp x (#44` hp x (#2vÞ9Wutoc 7toc 7 toc 8toc 8` hp x (#44` hp x (#toc 9toc 9` hp x (#44` hp x (#index 1index 1` hp x (#4 4 ` hp x (#2ťŪindex 2index 2` hp x (#4 4 ` hp x (#toatoa` hp x (#` hp x (#captioncaption;1#XP\  P6QXP##C\  P6QP#_Equation Caption_Equation Caption11#XP\  P6QXP##C\  P6QP#2ӭqqenendnote referenceendnote reference44#XP\  P6QXP##C\  P6QP#footnote referencefootnote reference4#XP\  P6QXP#2S&C6C^fDocument StyleNF2CC -2( -Ct )s t . 3S&C7C^fDocument StyleNF2CC -2( -Ct ) uv 2ejpm4S&C8C^fDocument StyleNF2CC! -2( -Ct ) wx 5S&C9C^fDocument StyleNF2CC/ -2( -Ct )*yz   6S&C:C^fDocument StyleNF2CC= -2( -Ct ){|` ` ` 7S&C;C^fRight-Aligned Paragraph NumbersK -2( -Ct )8}~@  21̰a8S&C<C^fRight-Aligned Paragraph NumbersY -2( -Ct )A@` ` `  ` ` ` 9S&C=C^fDocument StyleNF2CCg -2( -Ct )0    10S&C>C^fRight-Aligned Paragraph Numbersu -2( -Ct )J` ` ` @  ` ` ` 11S&C?C^fRight-Aligned Paragraph Numbers -2( -Ct )S` ` `  @  2Y!12S&C@C^fRight-Aligned Paragraph Numbers -2( -Ct )\` ` `  @hhh hhh 13S&CAC^fRight-Aligned Paragraph Numbers -2( -Ct )e` ` `  hhh@ hhh 14S&CBC^fRight-Aligned Paragraph Numbers -2( -Ct )n` ` `  hhh@  15S&CCC^fRight-Aligned Paragraph Numbers -2( -Ct )w` ` `  hhh@ppp ppp 2$޶c16S&CDC^fDocument StyleNF2CC -2( -Ct )F   ׃  17S&CEC^fTechnical Document StyleCC -2( -Ct )&  . 18S&CFC^fTechnical Document StyleCC -2( -Ct )&  . 19S&CGC^fTechnical Document StyleCC -2( -Ct )*    2K߹20S&CHC^fTechnical Document StyleCC -2( -Ct )'   21S&CIC^fTechnical Document StyleCC -2( -Ct )&   22S&CJC^fTechnical Document StyleCC -2( -Ct )4$     23S&CKC^fTechnical Document StyleCC+ -2( -Ct )&  . 2cF}˻Hм24S&CLC^fTechnical Document StyleCC9 -2( -Ct )&  . 25S&CMC^f1. a. i. (1) (a) (i) 1) a)CG -2( -Ct )$ 26S&CNC^f1. a. i. (1) (a) (i) 1) a)CU -2( -Ct )/` ` ` 27S&COC^f1. a. i. (1) (a) (i) 1) a)Cc -2( -Ct ):` ` `  2O3ܾ28S&CPC^f1. a. i. (1) (a) (i) 1) a)Cq -2( -Ct )E` ` `  29S&CQC^f1. a. i. (1) (a) (i) 1) a)C -2( -Ct )P` ` ` hhh 30S&CRC^f1. a. i. (1) (a) (i) 1) a)C -2( -Ct )[ 31S&CSC^f1. a. i. (1) (a) (i) 1) a)C -2( -Ct )f 2K32S&CTC^f1. a. i. (1) (a) (i) 1) a)C -2( -Ct )q Default ParaC^fDefault Paragraph Font2CC -2( -Ct );;#PP##PP#_Equation CaC^f_Equation CaptionF2CC -2( -Ct );;#PP##PP#endnote refeC^fendnote referenceF2CC -2( -Ct )>>#PP##PP#2vvvofootnote refC^ffootnote referenceF2CC -2( -Ct )>#PP#heading 4heading 4 heading 5heading 5 heading 6heading 6 2vvvyheading 7heading 7 heading 8heading 8 endnote textendnote text toa headingtoa heading` hp x (#(#(#` hp x (#2Zd#p91, 2, 3,?@65NumbersO@/"=(1*1÷$t ?.E1.A, B,t ?@65Uppercase Letters1 ?*1÷$t ?.E .footnote tex6footnote text̺=(?. 0&ܺ*?.ںd 0E2(33`O5hT(G2PDocument Style&^aO5h.K+&,$@`O5Bȗ+&>` ` ` 2qeLe34`O5iT(G2PDocument Style&^aO5i.K+&,$@`O5Bȗ+&>  . 35`O5jT(G2PDocument Style&^aO5j.K+&,$@`O5Bȗ+&>  36`O5kT(G2PDocument Style&^aO5k.K+&,$@`O5Bȗ+&>  37`O5lT(G2PDocument Style&^aO5l.K+&,$@`O5Bȗ+&>*   2 pKx38`O5mT(G2PDocument Style&^aO5m.K+&,$@`O5Bȗ+&>` ` ` 39`O5nT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>8@   40`O5oT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>A@` `  ` ` ` 41`O5pT(G2PDocument Style&^aO5p.K+&,$@`O5Bȗ+&>0    2?F42`O5qT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>J` ` @  ` `  43`O5rT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>S` `  @  44`O5sT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>\` `  @hh# hhh 45`O5tT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>e` `  hh#@( hh# 2746`O5uT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>n` `  hh#(@- ( 47`O5vT(G2PRight-Aligned Paragraph NumbersK+&,$@`O5Bȗ+&>w` `  hh#(-@pp2 -ppp 48`O5wT(G2PDocument Style&^aO5w.K+&,$@`O5Bȗ+&>F *  ׃  49`O5xT(G2PTechnical Document Stylex.K+&,$@`O5Bȗ+&>&  . 2Ab50`O5yT(G2PTechnical Document Styley.K+&,$@`O5Bȗ+&>&  . 51`O5zT(G2PTechnical Document Stylez.K+&,$@`O5Bȗ+&>*    52`O5{T(G2PTechnical Document Style{.K+&,$@`O5Bȗ+&>'   53`O5|T(G2PTechnical Document Style|.K+&,$@`O5Bȗ+&>&   2m}w54`O5}T(G2PTechnical Document Style}.K+&,$@`O5Bȗ+&>4$     55`O5~T(G2PTechnical Document Style~.K+&,$@`O5Bȗ+&>&  . 56`O5T(G2PTechnical Document Style.K+&,$@`O5Bȗ+&>&  . 57`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>$ 2&A58`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>/` ` ` 59`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>:` ` `  60`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>E` ` `  61`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>P` ` ` hhh 2n-62`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>[ 63`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>f 64`O5T(G2P1. a. i. (1) (a) (i) 1) a).K+&,$@`O5Bȗ+&>q 65`O5T(G2PDefault Paragraph Font5.K+&,$@`O5Bȗ+&>OO#P P##P P#266`O5T(G2P_Equation Caption^aO5.K+&,$@`O5Bȗ+&>OO#PP##PP#67`O5T(G2Pendnote reference^aO5.K+&,$@`O5Bȗ+&>RR#PP##PP#68`O5T(G2Pfootnote reference^aO5.K+&,$@`O5Bȗ+&>R#PP#69 _5(_>7footnote text _5dK+b70t _5xŗ+tZP2pq_ee570 _5(_>7Document Style _5dK+b70t _5xŗ+t` ` ` 71 _5(_>7Document Style _5dK+b70t _5xŗ+t  . 72 _5(_>7Document Style _5dK+b70t _5xŗ+t  73 _5(_>7Document Style _5dK+b70t _5xŗ+t  2p_a74 _5(_>7Document Style _5dK+b70t _5xŗ+t*   75 _5(_>7Document Style _5dK+b70t _5xŗ+t` ` ` 76 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+t8@   77 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+tA@` `  ` ` ` 2.g78 _5(_>7Document Style _5dK+b70t _5xŗ+t0     79 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+tJ` ` @  ` `  80 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+tS` `  @  81 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+t\  ` `  @hh# hhh 2T82 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+te  ` `  hh#@( hh# 83 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+tn ` `  hh#(@- ( 84 _5(_>7Right-Aligned Paragraph NumbersK+b70t _5xŗ+tw` `  hh#(-@pp2 -ppp 85 _5(_>7Document Style _5dK+b70t _5xŗ+tF *  ׃  2{@J86 _5(_>7Technical Document StyledK+b70t _5xŗ+t&  . 87 _5(_>7Technical Document StyledK+b70t _5xŗ+t&  . 88 _5(_>7Technical Document StyledK+b70t _5xŗ+t*    89 _5(_>7Technical Document StyledK+b70t _5xŗ+t'   2Av90 _5(_>7Technical Document StyledK+b70t _5xŗ+t&   91 _5(_>7Technical Document StyledK+b70t _5xŗ+t4$     92 _5(_>7Technical Document StyledK+b70t _5xŗ+t&   . 93 _5(_>7Technical Document StyledK+b70t _5xŗ+t&!"  . 2c}-294 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+t$#$ 95 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+t/%&` ` ` 96 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+t:'(` ` `  97 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+tE)*` ` `  2{>98 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+tP+,` ` ` hhh 99 _5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+t[-. 100_5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+tf/0 101_5(_>71. a. i. (1) (a) (i) 1) a)dK+b70t _5xŗ+tq12 2FFL9K102_5(_>7Default Paragraph Font5dK+b70t _5xŗ+tw3w4#PP##PP#103_5(_>7_Equation Caption _5dK+b70t _5xŗ+tw5w6#PP##PP#104_5(_>7endnote reference _5dK+b70t _5xŗ+tz7z8#PP##PP#"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd2. KKMKK"i~'^#)0<8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""'>'>'>'''''P/G)G)G)G)M/M/M/M/A,J2M6G)G)A,M,;/5JG5Y)Y)GGGG=\)GGGG\)\2JGJGJGJGJGJG\GGGG*8M5GGJGn!n0GG5)5_2G_2PGn,GGeA\$\$GGk$:!k$GG_#_GGPPe5MGMGe5M/`GGGn$A,n$MGGGPGGGGGPP=$PPWddddddddddddddddddddddddddddddddddddddddNtttPG;/288;;\;''hh;,///;h,''Gn$$;;;;yPPtP/GG//n'/S,"ttPtJttGGPGG. GP55tbGtttttttttt$PJ/YGGtkP/tGG\t|httttttttttJttttttkb|tD_tttttttPttttttt2tttt2tttttttttttttttttttttttttttttttttttttttttttt)ttt)ttt'ttt'tttttttttttttJbAYbYkG>>AGJPtG',JGkYbYPGkPGGtb;PbPP>GAGkbJY|bbbJ>J'GGAGbGbbbbu$$GGGGJJGGGGGGb\PG5xؐJppZ`]mmVVjjvvsp}vvJv]VV3J3Jʀ}}}}}}}}M=f}",tB^ f ^,;0HH`44HY,4,CHHHHHHHHHH,,Y?]QQ`LH]]00]CxdYHYYHL`]x]QQ0C0ddJAAM=:JJ''J5`PG:GG:=MJ`JAA?d?Y4YYYYY,YYYYYYdYF%]?]?]?]?]?QQ0N0N0N0N00%0%0%0%d;Y4Y4Y4Y4`;`;`;`;Q8]?`DY4Y4Q8`8J;C]YCo4o4YYYYLs4YYYYs4s?]Y]Y]Y]Y]Y]Ys%YYYY4F`CYY]Y)<YYC4C%v?Yv?dY8YY~Qs,s,YY,H),YYv,v%YYdd~C`Y`Y~C`;xYYY,Q8,`YYYdYYYYYddL,ddWddddddddddddddddddddddddddddddddddddddddNdYJ;?FFJJsJ00J8;;;J800Y,,JJJJddd;YY;;0;h8"d]YYdYY9YdCCzY,d];oYYd%;YYs]zUvd??4400]JQAzbkN>QA]Jt0']JkzbdPkYGtJ;zbN>QAk]J|zb]N]0YYQYzYzzzz,,YYYY]]YYYYYYz%sdYCx\   pxtll\tll@\@\`L2L f m( f 3 f 9?KJ",tB^ f ^CYHll,NNlCNCdllllllllllCC,,^zzrlHHdllrzzHdH,^NHYH,Y^8,N,YNYSH==YSlSSS^^,NCi8^^^^^zzHuHuHuHuHH8H8H8H8YNNNNYYYYzS^fNNzSSoY d dNN rNN^8Nid=ZdNd8^^SzCCCl=CB8ddYCzSCrC,,,W,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,ddddddddddddddddddddddddddddddddddddddddNoY^iioooHHoSYYYoS,,HHCC,,oooo,,YYY,HYS",,,,,,,,,,,,,,,Vdd,,,,,,C,Y,,8Y,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,^^NNHHzuuzHSouzuHzCC8dx,8VnDVVbbJDDPD\> J2J>8 &>>,,,,,,,,`` 8888,,,,,,,,,,zz&&>>>r",tB^ f ^5G:VVs$>>Vk5>5PVVVVVVVVVV55kLobbs[Voo::oPxkVkkV[soobb:P:xx$L>:G:$GL,$>$fG>GC:11GCVCCCLxLk>kkkkk5kkkkkkxkT,oLoLoLoLoLbb:]:]:]:]::,:,:,:,xGk>k>k>k>sGsGsGsGbCoLsRk>k>bCsCYGPokP>>kkkk[>kkkk>Lokokokokokok,kkkk>TsPkkok1HkkP>P,LkLxkCkkb55kk5V15kk5,kkxxPskskPsGkkk5bC5skkkxkkkkkxx[5xx$$$WddddddddddddddddddddddddddddddddddddddddNxkYGLTTYYY::YCGGGYC$$::k55YYYYxxxGkkGG$:G|C"xokkxkkEkxPPk5xoGkkx,GkkofxLL>>::obk]]bkoxk:CokxkxkkYxxx]kbkoo]o:kkbkk55kkkkookkkkkk,xkPx8D%nZZB 3nMnMn..s[",tB^ f ^CYHll,NNlCNCdllllllllllCC,,^zzrlHHdllrzzHdH,obbs[Voo::oPxkVkkV[soobb^^,NCi8^^^^^zzHuHuHuHuHH8H8H8H8YNNNNYYYYzS^fNNzSSoY d dNN rNN^8Nid=ZdNd8^^SzCCCl=CB8ddYCzSCrC,,,W,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,ddddddddddddddddddddddddddddddddddddddddNoY^iioooHHoSYYYoS,,HHCC,,oooo,,YYY,HYS",,,,,,,,,,,,,,,Vdd,,,,,,C,Y,,8Y,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,^^NNHHozbu]zboH:oxkoYu]zbouHzCC8dx,8VnDVVbbJDDPD\> J2J>8 &>>,,,,,,,,`` 8888,,,,,,,,,,zz&&>>>r"i~'^:DTddDDDd4D48ddddddddddDDd||||DXp||dp||ppL8LTdDccjsccss6FjZjscscPZsccZZP8PlD4lTDDD4DDDDDDdDd8|d|d|d|d|dX|X|X|X|XD8D8D8D8dddddddddpX|ddddpXd|d|d|d|dXXlXx|X|X|X|XdddldldD8DdDDDddllXp8pHpDp@p8dtdddd|L|L|LdLdLdLllpHp8pTddddddplpLpLpLdpDddLpDpdx4ddC,CWddddddddddddddddddddddddddddddddddddddddNHxxHhdLdddddd8@d<@d<DDppdDDxddzHxxHkddDpd<"dxtldxxd2HVKMKgOKQKS"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDsjjscZss6=scssZsjZcssssc`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd"i~'^.6CPP}666Pm*6*-PPPPPPPPPP66mmmPccjsccss6FjZjscscPZsccZZ=-=CP6PPFPF-PP--F-sPPPP==-PFjFF=@-@V6*VC666*666666P6P-cPcPcPcPcPjjFcFcFcFcF6-6-6-6-jPsPsPsPsPsPsPsPsPZFcPsPsPsPZFsPcPcPcPcPjFjFjVjFs`cFcFcFcFsPsPsPsVsPsVsP6-6P666PzPVVjFZ-Z:Z6Z3Z-jP]jPjPsPsPjc=c=c=P=P=P=VVZ:Z-ZCsPsPsPsPsPsPjZVZ=Z=Z=sPZ6jPP=Z6ZP`*PP5#5WppppppppppppppppppppppppppppppppppppppppppppppppddddddddddddddddddddddddddddddddddddddddN:``:SP=PPPPPP-3zzP03zzPz066ZZP77`PPby:``:VyyPP6ZP0"jjjjzzPz`]VPm``P"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9`XX`SK``-3`Su``K`XKS``}``SP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN)>F)))))))))<)C"VV5VYO5O5O5O5^<^<^<^>^<^C^F.".C.).CaC>>^CO"O6O)O0O"VCVVCVC^<^O=O)OFVCVCVCVCVCVCxVV>O5O5O5VCO)VCC.O)V<X<<( (WTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN+HH+@<)<<<</>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN>iiffSSxSrff8SS?"xxSxXxxS姧0 S88xcxxxxxxxxxx8S{g]ix{S8ixSi`xlxxxxxxxxxxYxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxx{]iY]S{Y`MfGx`Y.(oS{V]x]iG`x`cYccJiMrYuxPr{{`x8irr{Y]rrz88iiii{xiiirrr{8`SJ8Muu]daqqZZnn{{xu{{M{aZZ5M5M҅P?k",^Wf,fffNfNTffr,fTfffTfTrfxBxfNfffNfffffffT,oToToToTrTrrfrTfxT)rrrf,frfNdQdWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf ZfZfZff,gg,,,l,l,f,Z",,,&,"i~'^:LpddDDDdp4D48ddddddddddDDpppdLd||p|||D8DpdDddXdXDdp88d8pdddLL8pXdXLD,DpD4ppDDD4DDDDDDdDd8dddddXXXXXL8L8L8L8pddddpppp|Xdddd|Xd|ddddXXpXXXXXdddpdppL8LdLDLdpppd|8|h|D|L|8pppddLLLpLpLpLpp|l|8|ppppppp|p|L|L|Ld|DppL|D|d4ddC8CWddddddddddddddddddddddddddddddddddddddddNHxxHddLdddddd4R>CxxxxxxxxxxCCjݭR[ӭ⭭RCRnxRwkAIwkkwws0sR>nRRR>RRRRRRRRxCjjjjjӜjjjjjRCRCRCRCxxxxxxxxxxjxvxxxxjjjjjjjjjjxxxxxRCRxRRRxxC`RRCxxxxxӭRRR[[[eCnxxxxxx⭭jjjxRx[Rx>xxP+PWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNVVnxRjxxxxxCMxHMxHRRjjxRRxx듶VVȆRjxH"x𐋂x됐x2*K̇(f t}"i~'^?JyllٶJJJly8J8=llllllllllJJyyyl̜Rl̜yٜJ=J~lJly_y_Jly=Jy=ylyy_RJylll_W0WqJ8q~JJJ8JJJJJJlJy=lllllٜ_____P=P=P=P=yllllyyyyllyllllylll__q_____lllqly~R=RyRJRyyqqy=bJW=yyyllל___yRyRyRyqoJ~yyyyyyٜq___yJyyRJl8llH;HWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNNNslJllllllAJlAJlAJJlllJJllلNقNyyJllA"lقulyԂl",tB^ f ^DDlDXXDDD`DDd|xpDXtpp\`\llDdtdxhDht44h4txxtNLHthhlT`l`>Dl4ddddddxhxhxhxhD4D4D4D4txxxxttttld~xxlxpxuuuu~u~u~=4Dhu4uJtPL~~~NNlpLlWNt~~thWhlDllDDDWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNlDdddTTTdllTDDtt88lllttDtlT"l|l>lHHDlpxlDtl|t\l``XX\\x|txltxd\|tD4lpxx\||pt`dthxDtxDDD|l`H%d88"y~uud~uuEdEdhR<?xxx,>fx6X@`7X@,&y.X80,IX\  P6G;P'7jC:, Xj\  P6G;XP#4W!@(#,9h@\  P6G;hP5H5!,,5\  P6G;,P&(7nC:,Xn4  pG;X\6{,W80,-?W*f9 xr G;X\85hC:,-Xh*f9 xr G;XXdsU[C,,DX[& @P87XP d\DI5$,D.?I& @P87P sU[C,,DX[& @P87XP ddC,Dτ& @P87P dfmP5,Dm& @P87P dC,Dτ& @P87P t,U5.,U\  P6G;P?7jC:, Xj\  P6G;XP\v*S5.,-8S*f9 xr G;X5hC:,-Xh*f9 xr G;XXCa$G,',YG\  P6G;P9y.X80,IX\  P6G;P\X >(#,-2.h>*f9 xr G;hX:W!B(#,|qhB4  pG;h\Ib#E,',-R.E*f9 xr G;X>{,W80,-?W*f9 xr G;X7y.\80, [\4  pG;Aa$I,',II4  pG;y.\80, [\4  pG;)|C?,M|X|L@ PI37XP }*h88,VhxP7PK6jC:,^LXj9 xOG;XBa$G,',^ G9 xOG;RdW, \  P6G;P RdW,L4  pG;#mt,X\  P6G;P#"#mt,_4  pG;APF,Y!\  P6G;P'%5f@8,?f\  P6G;?P$#JAPF,Y!\  P6G;P%\I4!,-";,4*f9 xr G;,XAPF,4  pG;-HD,MF6L@ PI37P;sH?,0s\  P6G;P*;wH?,w4  pG; ?xxx,zNx6Nhez7XH<R&HHH,D,H6X@`7h@t IS ADOPTED.  X -m110.` ` 0*xN= '3,,@@@@@@@dPA[JWt4BP<ՠͼ>[(ts[[l[s ?[[,[T(<XO[&p4 U_[p[00VyRo.[RoF"OQs=losH U(}zXs"zUpT+'29jVjG$V)? sySme_のY<$[Zl?3MS(SP$SHS(P0rfPHS/Snd/H/]Sy)x7>X[[<&[@0]P$SHP0 rZfPHS/nd/H/x]PxSy) q 7T0*x0*xN= '3,,@@@@@@@ 4BPՠ͌>[ s[[<[ՠsO? [?[?[[[4ծ U_hl[pd[00\VyWؿ.[OWF-VOQs=lWj s-Vsz  oxp+'29jVjGV)? sySmeW8lY<X$O[Zl?;PPMOOP$P0P0rfP0S/Ond/0/]Sy)y7FVX[[<&[`]::P$O:P0 :rZfPS/:nd//0]P0Sy) u 7T0*x X-   & X- x` `  Federal Communications Commission`(#FCC 99 5 ă  yxdddy +2 Before the [ FEDERAL COMMUNICATIONS COMMISSION  X-Washington, D.C. 20554 ă R) In the Matter ofR) R) Inquiry Concerning the Deployment of R)  X1-Advanced TelecommunicationsR)hppCC Docket No. 98146 Capability to All Americans in a ReasonableR) and Timely Fashion, and Possible StepsR) to Accelerate Such DeploymentR) Pursuant to Section 706 of theR) Telecommunications Act of 1996R) R)  Xb-L7 REPORT ă  X-x Adopted: January 28, 1999 @ hppReleased: February 2, 1999 By the Commission: Chairman Kennard and Commissioners Ness, FurchtgottRoth, Powell, and Tristani issuing separate statements.  X|-  TABLE OF CONTENTS ă `(#"Paragraph  X -I. xINTRODUCTIONp"(#O 1  X-xA.` ` Executive Summaryp"(#O 1  X -xB.` ` Statutory Frameworkp"(#R9  X"-xC.` ` Overviewp`"(#L11  Xh$-II.xTERMINOLOGY p"(#I 20"h$0*%%ZZ(#"Ԍ X-ԙxA.` ` Definition of "Advanced Telecommunications Capability"p!(#F 20  X-xB.` ` Standard for What Is "Reasonable and Timely"p!(#F 26  X-III.xDEPLOYMENT OF ADVANCED TELECOMMUNICATIONS CAPABILITYp!(#F 34  Xv-xA.` ` Introductionp!(#F 34  XH-xB.` ` Deployment of Broadband Capabilityp`"(#L35  X -x` ` 1. Investment in Broadband Facilitiesp`"(#L35  X -x` ` 2. The Last Mile to the Residential Consumerp`"(#L45  X -x` ` 3. Deployment to "All Americans"p`"(#L62  X-x` `  a.Backbone to Rural Areasp`"(#L63 x` `  Xb-x` `  b. The Last Mile to Rural and LowIncome Consumersp`"(#L66  X4-x` `  c.Elementary and Secondary Schools and Classroomsp`"(#L81  X-xC.` ` The Demand for Broadband Capabilityp`"(#L85  X-xD.` ` Conclusionp"(#I 91  X-IV.xADDITIONAL ISSUESp"(#I 99  X|-xA.` ` Access to Broadband Systems p!(#C 100  XN-xB.` ` Access to Multiple Dwelling Units p!(#C 102  X -xC.` ` Internet Peering p!(#C 105  X-VxFURTHER ACTIONSp!(#C 106 x  X -VI.xORDERING CLAUSESp!(#C 109 APPENDIX A: Sources for Charts 2 and 3""0*%%ZZf!"Ԍ X-řM I. INTRODUCTION ĐTP  X- A.xExecutive Summary hh@  X-x1.` ` One of the fundamental goals of the Telecommunications Act of 1996zi yO-ԍxTelecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).z (the 1996 Act) is to promote innovation and investment by multiple market participants in order to  Xv-stimulate competition for all services, including broadband communications services.rZvXi yO -ԍxIn the interests of simplicity, in this Report we sometimes use the single term "broadband" to refer to facilities that have "advanced telecommunications capability" and/or services provided at retail to consumers on  {O -such facilities. We define these terms further in  2025 infra.r In this Report, we consider the deployment of broadband capability what Congress has called  XH-"advanced telecommunications capability."Hzi yOs-ԍxThe principal section of the 1996 Act concerning advanced telecommunications capability is Section 706, Pub.L. 104-104, Title VII,  706, Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157. It provides: xSEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES. x(a) IN GENERAL.--The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment. x(b) INQUIRY.--The Commission shall, within 30 months after the date of enactment of this Act, and regularly thereafter, initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) and shall complete the inquiry within 180 days after its initiation. In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market. x(c) DEFINITIONS.For purposes of this subsection: x` ` (1) ADVANCED TELECOMMUNICATIONS CAPABILITY.The term "advanced telecommunications capability" is defined, without regard to any transmission media or technology, as highspeed, switched, broadband telecommunications capability that enables users to originate and receive highquality voice, data, graphics, and video telecommunications using any technology. x` ` . . . .  X -x2.` ` Increasingly, all electronic communications are becoming digital. Print, audio, video, voice, and data can all be transmitted in digital form, as collections of ones and zeros. Broadband makes it possible to send and receive enormous amounts of digital information at" 0*%%ZZ "  X-high rates of speed.i yOy-ԍxThe term "broadband" is generally used to convey sufficient capacity or "bandwidth" to transport large amounts of information. Widespread access to broadband capability can increase our nation's productivity and create jobs. Access to broadband can also meaningfully improve our educational, social, and health care services.  X-x3.` ` As discussed further below, the demand for broadband capability is growing rapidly. For consumers, access to broadband capability means that many new services and vast improvements to existing services will be available. These services could include realtime video in addition to telephony, so that families that connect over the phone can see each other as well as talk to each other. They could also include the ability to download featurelength movies in a matter of minutes. In addition, access to broadband capability means being able to change web pages as fast as changing the channel on a television. As a result of these services, new possibilities will open up for electronic commerce. There may also be increased prospects for athome learning and working at home (a special help for those who  X -are homebound due to age or disability),T i {O-ԍxSee Comments of Randall Wolf.T platforms for entrepreneurs to launch new informationbased businesses and homebased businesses, great improvements in medical  X -treatment, and health care at home in emergencies and for the chronically infirmp i {O -ԍxSee, e.g., Comments of MediaOne Group, Inc., at 10.p all potentially at prices that large numbers of consumers are likely to willingly pay. Some of these services will be possible with enhancements to today's cable, telephone, and other facilities. Others, however, will require the deployment of entirely new technologies, especially in the last mile to the home.  X-x4.` ` As Congress directed, we intend to ensure that broadband capability is being  X-deployed on a reasonable and timely basis to all Americans.HDi {O-ԍxSee supra note 3.H We are encouraged that, as the demand for broadband capability increases, methods for delivering this digital information at high speeds to consumers are emerging in virtually all segments of the communications industry wireline telephone, landbased ("terrestrial") and satellite wireless, and cable, to name a few.  X|-x5.` ` Congress has instructed us to assess the availability of advanced telecommunications capability to all Americans, including in particular elementary and secondary schools and classrooms; and to take "immediate action" if we find that such capability is not being deployed to all Americans in a reasonable and timely manner. We are"70*%%ZZ" committed to following this instruction while also promoting the deregulatory and procompetitive goals of the 1996 Act. Our role is not to pick winners and losers, or to select the best technology to meet consumer demand. We intend to rely as much as possible on free markets and private enterprise.  X-x6.` ` We certainly have not reached the ultimate goal that all Americans have meaningful access to advanced telecommunications services. Indeed, at such an early stage of deployment of many broadband services, it is difficult to reach any firm judgment about the state of deployment. Nonetheless, we are encouraged that deployment of advanced telecommunications generally appears, at present, reasonable and timely. We base this conclusion, in part, on the large investments in broadband technologies that numerous companies in the communications industry are making. We expect that these investments will lead, in the near future, to greater competition in the broadband market and to greater deployment of these services in a manner that is more efficient and includes all Americans.  X -x7.` ` Although we conclude that, at present, deployment of advanced telecommunications capability appears to be reasonable and timely, we note that this conclusion is based partly on actual deployment and partly on certain assumptions and predictions regarding the future. For instance, this Report uses actual subscribership as a proxy for "deployment" and "availability." Although we find this to be a reasonable approach, we acknowledge that it may not be a precise estimate of actual deployment and availability. In addition, the Report compares the deployment of advanced telecommunications capability to the deployment of other communicationsrelated services. Although deployment of another communications-related technology may not necessarily furnish a perfect analogy to deployment of advanced telecommunications capability, we believe that such empirical comparisons may be useful as one objective method to evaluate deployment of broadband. Finally, assertions of companies regarding their plans for deployment, while helpful, may not ultimately prove accurate. Given that this Report presents a snapshot at the early stages of deployment, we remain cautious about drawing definitive conclusions regarding the deployment of broadband services. We will continue to monitor the situation through annual reports and, in future reports, we hope to improve and expand upon the data we receive and our tools of analysis.  X -x8.` ` Where necessary, we are already taking steps, partly in proceedings described in Section V below, to ensure that overall market conditions for local telecommunications are conducive to investment, innovation, and meeting consumer demand. In another proceeding, for example, we are considering measures to promote the deployment of wireline advanced services by both incumbent Local Exchange Carriers (LECs) and new entrants. We will continue to monitor closely the deployment of broadband capability by providers using all technologies. We will not hesitate to reduce barriers to infrastructure investment and to promote competition so that companies in all segments of the communications industry will"h$0*%%ZZ(#" have marketbased incentives to innovate and invest in new technologies and facilities. We are committed to carrying out Congress' directive to ensure that advanced telecommunications capability is deployed in a reasonable and timely manner to all Americans.  X-  B.xStatutory Framework  X_-x9.` ` Section 706 of the Act:_i {O-ԍxId.: is a Congressional mandate to the Commission to  XH-examine the availability of advanced telecommunications capability to all Americans.C XHZi yOS -ԍx"Section 4 of the Bill [later section 706 of the 1996 Act] states clearly that this bill is intended to establish a national policy framework designed to accelerate rapidly the private sector deployment of advanced telecommunications." S. Rep. 10423 at 27, March 30, 1995.C  The statute defines "advanced telecommunications capability," "without regard to any transmission media or technology, as highspeed, switched, broadband telecommunications capability that enables users to originate and receive highquality voice, data, graphics, and video  X -telecommunications using any technology."X zi {O-ԍxSection 706 (c)(1), supra note 3.X  X -x 10.` ` In section 706(b), Congress specifically directs the Commission to begin this inquiry, within thirty months of enactment of the 1996 Act, to find out whether advanced telecommunications capability is being deployed to all Americans in a "reasonable and timely fashion." The Commission must complete the inquiry within 180 days, and must take "immediate action to accelerate the deployment" of advanced telecommunications capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market if the inquiry determines that such capability is not being deployed in a reasonable and timely fashion.  X- vC.xOverview  X-x 11.` ` In this Report, we consider the deployment of broadband to "all Americans" to determine whether the pace of deployment is "reasonable and timely." After defining some statutory terms in Section II, we examine in Section III the deployment of broadband capability. Many large and mediumsized business and government customers have hadv access to broadband for years, and in this proceeding we have heard few complaints from such customers that they, as a group, do not have access to broadband technologies. Therefore, this Report concentrates on the consumer market. "   0*%%ZZz"Ԍ X-ԙx 12.` ` Numerous companies in virtually all segments of the communications industry are starting to deploy, or plan to deploy in the near future, broadband to the consumer market. Current providers include cable television companies, incumbent LECs, some utilities, and "wireless cable" companies. In many areas, too, competitive LECs that serve large and mediumsized business customers start with loops provided by incumbent LECs and add broadband enhancements of their own, thus constituting another supplier of broadband for those customers. They also serve residential customers in the "small office, home office" market. In addition, other companies are considering providing broadband services to the consumer market, including interexchange carriers (IXCs), information service providers (ISPs), cellular companies and providers of broadband Personal Communications Services, and relatively recent licensees of spectrum using both satellite and terrestrial "fixed wireless" technologies.  X -x 13.` ` In Section III, we first examine trends in investment in broadband technologies and facilities to determine whether companies are making the investment necessary to supply the consumer market with broadband capability. We consider investment in both backbone  X-facilities and the "last mile."J |i yO -ԍxAs we stated in the Notice herein, for simplicity's sake, in this Report we will use the terms "backbone" and "last mile" as shorthand for interoffice/long distance/international and local facilities and services,  {O-respectively. Cf. Comments of BellSouth Corp. at 9 (distinguishing between "advanced access services, which connect the user to broadband networks, and advanced endtoend networking, including backbone transport services"). Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable & Timely Fashion, & Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of  {O-the Telecommunications Act of 1996, Notice of Inquiry, 13 FCC Rcd 15280, 15286 n.9 (1998) (Notice).J We find that broadband backbone facilities are being deployed  Xy-in a reasonable and timely manner. We then focus in particular on deployment of facilities that serve the "last mile," because the connection to the consumer has historically been the least competitive, and most bandwidthconstrained, part of the communications network. If all Americans are to have meaningful access to broadband capability, there must be a solution to the problem of the "last mile." No matter how fast the backbone or network is, if the last mile to the consumer is slow, then the consumer cannot take advantage of the network's highspeed capabilities.  X-x 14.` ` After examining the investments in and deployment of advanced telecommunications capability in general, we next consider deployment of broadband capability to specific classes of users, including people in rural and lowincome areas, and schools and classrooms. We discuss elementary and secondary schools and classrooms first,  Xe-and then people in rural areas, lowincome people, libraries and rural health care facilities. \e i {O"#-ԍxSection 706 specifically mentions elementary and secondary schools and classrooms. See supra note 3. Section 254 of the 1996 Act, which concerns universal service, specifically mentions those users and also low {O$-income consumers, those in rural, insular, and high cost areas, health care providers, and libraries. See 47 U.S.C."$ 0*%%$"  254 (b)(3,6), (c)(3), (h)(2)(a). "eX 0*%%ZZ" In this section, we examine the deployment of broadband capability to ensure that such services are made available to all Americans as called for in section 706(b) of the 1996 Act.  X-x15.` ` We next consider the demand for broadband capability. We recognize that the demand for such capability will turn on its price; demand for broadband capability will tend to increase as its price declines. In order to determine whether broadband capability is being deployed in a reasonable and timely fashion, we must examine whether communications companies are meeting demand.  X1-x16.` ` Overall, we find that, although the consumer broadband market is in the early stages of development, it appears, at this time, that deployment of broadband capability is reasonable and timely. Nevertheless, this is an early snapshot of a fledgling market. We find that there is already a significant initial demand for broadband capability and we expect demand to grow substantially in the coming years. We are committed to ensuring that deployment of broadband capability to the consumer market remains timely and reasonable as the market for broadband develops, and that the supply of broadband meets consumer demand.  Xb-x17.` ` In Section IV, we discuss a number of key issues that may have a significant impact on the deployment of broadband capability in the near future. These issues are (1) access to broadband systems; (2) access to multiple dwelling units for the provision of broadband services; and (3) Internet peering arrangements. Although we do not take action on these issues at this time, we intend to monitor these issues closely.  X-x18.` ` Finally, in Section V, we discuss some of the specific proceedings in which the Commission is already taking steps to promote the availability of broadband capability. In no respect are we considering regulating the Internet. Rather, through these and other proceedings, we seek to reduce barriers to competition so that companies in all segments of the communications industry have the incentive to innovate and to deploy new technologies and services to all Americans.  X7-x19.` ` Consistent with Congress's directive that we examine these issues "regularly," we plan to issue reports such as this one each calendar year. "X 0*%%ZZ"Ԍ X- ř7 II. TERMINOLOGYTP  X- A.xDefinition of "Advanced Telecommunications Capability"  X-x20.` ` Section 706 (b) of the 1996 Act defines "advanced telecommunications capability" as "highspeed, switched, broadband telecommunications capability that enables users to originate and receive highquality voice, data, graphics, and video telecommunications using any technology." For purposes of this Report, we define "broadband" as having the capability of supporting, in both the providertoconsumer (downstream) and the consumertoprovider (upstream) directions, a speed (in technical terms, "bandwidth")  in excess of 200  X -kilobits per second (kbps) in the last mile.P \ i yO -ԍxWe believe that Congress intended broadband to be faster than ISDN service, which operates at a data  {O[ -rate of 128 kbps and was widely available at the time the 1996 Act was enacted. Re ISDN service, see also  {O% -infra  2 in Appendix A.P This rate is approximately four times faster than the Internet access received through a standard phone line at 56 kbps. We have initially chosen 200 kbps because it is enough to provide the most popular forms of broadband to change web pages as fast as one can flip through the pages of a book and to transmit fullmotion video. We also include in broadband facilities that have been upgraded or otherwise altered in ways that make them capable of broadband speeds. Thus, a nonbroadband line, like a standard telephone line, that has been conditioned so that it is capable of more than 200  Xy-kbps would constitute broadband.eyi {O-ԍxSee Comments of Cincinnati Bell Tel. Co. at 7.e  XK-  x21.` ` We interpret "enabl[ing] users to originate and receive . . . telecommunications" as requiring twoway telecommunications. Thus, neither a conventional cable television system nor a digital television signal, by itself, would be broadband within the statutory  X-definition, for they are both oneway.#~i yO5-ԍxAnother reason that neither a conventional cable television system nor a digital television system, by  {O-itself, would fit the statutory definition is that neither permits "switched" communications.  See supra  20.#  X-x22.` ` We define broadband as including a service in which the upstream and  X-downstream communications paths are not in one selfcontained system or offering.i {OJ -ԍxSee, e.g., Comments of Personal Commun. Indus. Ass'n at 8 n.11; Comments of Paging Network, Inc., at 56. Thus, broadband could include an upstream path supplied by a LEC and a downstream path supplied by a satellite company. This takes account of the fact that telecommunications in this country consists increasingly of a "network of networks." Both paths, however, must be capable of supporting a speed in excess of 200 kbps in the last mile, as we discussed in paragraph 20"e 2 0*%%ZZ"  X-above.\Bi yOy-ԍxCertain services, such as Hughes's DirecPC, are capable of affording the customer rates of speed in excess of 200 kbps in the downstream direction, but rely on standard telephone company lines, with speeds far less than 200 kbps, in the upstream direction. Such services are not advanced telecommunications capability,  {O-because Section 706 requires broadband rates of speed in both directions. See  706 (c)(1), supra note 3 (defining advanced telecommunications capability as "broadband telecommunications capability that enables users to originate and receive highquality voice, data, graphics, and video telecommunications"). Nevertheless, we find services such as DirecPC to be useful and we encourage their deployment, although not as advanced telecommunications capability.\  X-x23.` ` We further find that broadband service does not include content, but consists only of making available a communications path on which content may be transmitted and  X-received.i {O' -ԍxSee Comments of e.spire Commun., Inc. at 4; Comments of Information Technology Ass'n of America at 2 n.3. In addition, we emphasize that whether a capability is broadband does not depend  X-on the use of any particular technology or nature of the provider.'Z, i yOj-ԍxFor example, a governmentowned public utility that deployed broadband would not, because of its  {O2-ownership, be considered differently from any other broadband provider.  See Comments of American Public Power Ass'n at 14.'  X_-x24.` ` Some facilities and services may not be "telecommunications" within the  XH-precise terms of the Communications Act of 1934, as amended,[HN i {OG-ԍxSee, e.g., 47 U.S.C.  153 (43)).[ but may as a practical matter be competitive with advanced telecommunications capability. One such service is broadband provided over cable television systems, which we describe in paragraph 55 and Appendix A, paragraph 6, below. There is disagreement over the status of such services  X -under the 1934 Act. i {O}-ԍxCompare, e.g., Reply Comments of MindSpring Enterprises, Inc., at 2123 with Reply Comments of  yOG-Cox Commun., Inc., at 57. We do not decide such issues, but we do consider such services in this Report. By way of analogy, a study of the future of "mass transit" between New York and Washington would need to consider travel by car between the same points even if cars are not  X -"mass transit."  Xy-x25.` ` Finally, we recognize that as technologies evolve, the concept of broadband will evolve with it: we may consider today's "broadband" to be narrowband when tomorrow's technologies are deployed and consumer demand for higher bandwidth appears on a large scale. For example, we may find in future reports that evolution in technologies, retail offerings, and demand among consumers has raised the minimum speed for broadband from" :0*%%ZZ "  X-200 kbps to, for example, a certain number of megabits per second (Mbps).OZi {Oy-ԍxSee, e.g., Comments of ADC Telecommun., Inc., at 6; Comments of Bell Commun. Research, Inc., at 2 n.1; Comments of the Commercial Internet Exchange Ass'n at 6; Comments of Virtual Hipster at 2; Comments of the Rural Policy Research Inst. at 3; Comments of SBC Commun. Inc., at 14.O  X- B.xStandard for What Is "Reasonable and Timely"  X-x26.` ` Business Customers. Broadband services are available to most business  Xv-customers and have been for years in many cases.2Xvi yO -ԍxIt is not surprising that advanced services were first provided to business customers. In general, business customers are less geographically dispersed than residential customers, use a greater volume of telecommunications, and are more lucrative to serve.2 BellSouth, for example, states that "[h]ighend business users, especially in densely populated areas, already have access to a  XH-wide array of broadband networking and access capabilities."$H i {O-ԍxComments of BellSouth Corp. at i. See also Comments of Bell Atlantic at 7 ("Winstar and Teligent are  {O-building nationwide broadband wireless systems that will reach the majority of business customers."). But see Comments of Ameritech, Appendix B (statements from a few business customers that they are not satisfied with their present broadband options). The Progress and Freedom Foundation states in more detail that:   Businesses have been using digital bandwidth much longer than residences. Electronic Data Interchange, a protocol for computertocomputer transaction of billing, purchasing, invoicing, and other business functions, predates the Internet. . . . Until the rise of the Internet, many businesses were served by expensive private or leased facilities, obtained from valueadded network (VAN) providers such as GE Information Services (GEIS) and IBM, as well as from local telephone companies, competitive access providers and longdistance carriers. . . . It is estimated that over 90 percent of Fortune 1000 companies  XK-have either established or plan to establish a corporate Intranet. . . . Leased T1 lines are increasingly used to access the Internet and public switched networks. According to analyst Dataquest, the number of installed T1 lines  X-will surge by about 23 percent per year during the next two years. n] {O -ԍxSee, e.g., Comments of the Progress & Freedom Foundation at 1720 passim (footnotes omitted; underlining in original).    The majority of commenting parties appear to agree that the deployment of broadband for large and mediumsized business customers as a group is reasonable and timely, and we agree. " P 0*%%ZZq" By that we do not mean that every business in America is receiving all the broadband it wants at prices it likes. Rather, we interpret "reasonable and timely" to mean that businesses, on the  X-whole, either have access to broadband or, according to the best evidence, will have it soon. i yOK-ԍxIn addition, many satellitebased and terrestrial wireless broadband systems plan to focus on business  {O-customers. See, e.g,, Comments of Teligent, Inc., passim, and infra note 92.  Accordingly, in this Report we focus on the consumer market.  X-x27.` ` The Consumer Market. In Section III below, we evaluate whether deployment of broadband to the consumer market is reasonable and timely by considering the state of investment in broadband facilities, the extent to which last mile facilities have actually been deployed, deployment to "all Americans," and the state of demand.  X -x28.` ` We define "the consumer market" as consisting of small business and residential customers, to whom we sometimes refer collectively as "the residential  X -consumer."~  "i yO-ԍx In theory, small business and residential consumers have been able to subscribe to the broadband services that mediumsized and large business subscribers have subscribed to for years. Those services, however, were neither designed for, marketed to, or taken by small business and residential customers in any significant numbers.~ Because there is little data in our record about small business customers, and because small business customers share significant characteristics with residential customers,  X -in this Report we will treat residential customers as a surrogate for small business customers.@Z i yOy-ԍx We are aware, however, that two terrestrial wireless carriers, Winstar and Teligent, are targeting their  {OA-broadband at small business customers. See Comments of Teligent, Inc., at 1, 4; Reply Comments of WinStar Communications, Inc., at 3 n.7.@  X-x29.` ` In addition, we believe it is useful to compare the initial deployment of broadband with the deployment of other technologically advanced services whose deployment occurred through profitdriven private enterprise in market conditions and ultimately reached  XK-all, or the vast majority of, Americans.K, i yO(-ԍxWe will not use a subjective measurement, such as the state of deployment that would occur in a  {O-hypothetical market. See, e.g., Comments of Ameritech at 8. Using objective data about comparable services that have actual histories reflects how long it takes in the real world to raise capital, lay lines or build radio towers or launch satellites, build marketing and sales and other operational staffs and skills, establish brand identity and a good reputation with millions of consumers, and stimulate demand.  X-30.` ` We note that section 706 concerns not only the deployment of advanced" 0*%%ZZq"  X-telecommunications capability, but also its availability.bi {Oy-ԍxSee section 706 (a, b), supra note 3.b The record before us focuses on deployment of advanced capability, such as investment and construction plans, and generally lacks information about availability, which we believe refers to a consumer's ability to purchase a capability that has been deployed.   X-31.` ` As comparable services, we have chosen the original telephone in the 1870s, overtheair blackandwhite television in the late 1940s, color television in the 1950s, and  X_-cellular service in the mid1980s.>_Zi yOj -ԍxThe dates stated in the text above are after the regulatory gestation preceding the actual commercial offering of overtheair television and cellular service. xWe are aware, of course, that none of the four services we have chosen is precisely the same as broadband. That is one reason we have chosen four of them. The similarities, however, are substantial. These four services and broadband share a majority, and in some cases all, of the following characteristics: they require the deployment of new, complex networks of facilities, they give consumers a capability they previously lacked, they entail interactivity, and they require each consumer to make an upfront payment and to make an additional recurring payment. In addition, all four services we have chosen are, in a sense, evolutionary. Just as broadband Internet access was preceded by narrowband (56 kbps) Internet access, cellular service was preceded by paging, with voice messages and visual displays of data in some offerings, and by citizen's band radios, which allowed people in cars to communicate over radio waves. The telephone was preceded by the telegraph, to which the telephone was originally considered an adjunct. PostWar blackandwhite television was preceded by radio broadcasting and movies, and by mechanical television in the late 1920s and early electronic television in the late 1930s. Color television was an enhancement of blackandwhite television. Even the radiobased technologies on our list required the deployment of new networks, and ones that involved more than the erection of radio transmitters. For example, although overtheair television broadcasting (both blackandwhite and  {O-color) and cellular service did not require new wire lines to be laid to every home or car, it was years before  {O-their radio lines and the rest of those technologies overcame the limiting factors of distance, hills and valleys, and buildings, and allowed highquality transmission and reception everywhere.> We recognize that no two products or services are the same or are deployed in exactly the same conditions. Thus, while we make certain comparisons here, we hope the parties in future proceedings of this type will assist us in refining the basis on which to make such comparisons and, more generally, in measuring objectively whether deployment is reasonable and timely. We especially welcome suggestions about how to measure the market demand for broadband by taking into account such actual indicia as prices, willingness to pay, specific desired services, and the other complexities of consumer markets.  X-32.` ` The first regular, sustained commercial offerings occurred for the telephone in  Xy-1876,x yi yO(#-ԍxAlan Stone, Wrong Number: The Breakup of AT&T at 30 (1989).x for postWorld War II overtheair blackandwhite television in 1946,!$yi {O-ԍxCompare Eric Barnouw, Tube of Plenty: The Evolution of American Television at 100 (1990),  {OZ-and William Boddy, Fifties Television: The Industry and Its Critics at 46 (1993), with Christopher H.  yO$-Sterling & John M. Kitross, Stay Tuned: A Concise History of American Broadcasting at 278 (1978). for color"y !0*%%ZZ-"  X-television in 1954,"i yOe-ԍxKenneth Bilby, The General: General Sarnoff & the Rise of the Communications Industry at 208 (1986). for cellular service in 1983,# i {O-ԍxImplementation of Section 6002(B) of the Omnibus Budget Reconciliation Act of 1993, First Report, 10 FCC Rcd 8844, 8848 (1995). and, for broadband for residential  X-customers, apparently in 1996.$$f i yO -ԍxReply Comments of TCI at 8; http://www.rr.com/rdrun/company/index.html ("In September 1996, the  {O -first commercial broadband online service was delivered to customers . . . . "), visited Nov. 16, 1998; Robert W.  {O -Crandall & Charles L. Jackson, Eliminating Barriers to DSL Service at 11 (July 1998), Ex Parte Presentation by United States Telephone Association, Aug. 12, 1998 (USTA Presentation). For broadband, therefore, we have just completed the second calendar year of commercial offering. In 1878, twentysix thousand telephones were being  X-rented, most of them for business customers;_%R i {O-ԍStone, supra note 32, at 30._ in 1948, overtheair blackandwhite television  X-had a residential penetration of .4%;V&i yO9-ԍJames L. Baughman, The Republic of Mass Culture: Journalism, Filmmaking, and  yO-Broadcasting in America Since 1941 at 41 (1992); William Boddy, Fifties Television: The Industry  {O-and Its Critics at 51 (1993). Compare Bureau of Census, U.S. Department of Commerce, Historical Statistics  {O-of the United States, Colonial Times to 1970, Vol. 1 at 42 (Series A 335349, Number of Households) with Id., Vol. 2 at 796 (Series R 93105, Households with Television Sets).V in 1956, there were approximately 160,000 color  X-televisions in use;Y'i yO-ԍFCC, 23rd Ann. Rep. at 114 (1957).Y in 1985, there were approximately 340,000 cellular customers,((i {Of-ԍImplementation of Section 6002(B) of the Omnibus Budget Reconciliation Act of 1993, First Report 10 FCC Rcd 8844, 8874 (1995). almost all  Xv-of them businessbased.)vi {O-ԍAs late as 1994, most cellular customers were business customers. Craig O. McCaw, Memorandum  {Os-Opinion & Order, 9 FCC Rcd. 5836, 5862 (1994). If the use of broadband by the consumer market, with adjustments  X_-to reflect the smaller population of this country in previous decades, equals or exceeds the deployment of these similar technologies at the same point after they were first offered to consumers on a regular, commercial basis, then there is a strong indication that the deployment of broadband to the consumer market is reasonable and timely.  X - 33.` ` The rates of residential 'penetration' of these services are shown below in" )0*%%ZZ@ "  X-Chart 1.*i yOy-ԍNote that most of the data in the preceding paragraph includes both business and residence users, and that Chart 1 shows estimates of residential penetration.  X-  X-:M1 CHART 1 l * RESIDENTIAL PENETRATION RATES OF  Xv-0NEW SERVICESk+v - yOG -ԍSource: Common Carrier Bureau, Industry Analysis Division.k l  XH-(M y!ps0*xddchart1bpyA: Telephone Service l l l l lU  Xy- : X+0*%%ZZ3@0#!s)DXԌyApp p 0*xddchart1b2hpy  X-Og B: Other ĐlU The data in paragraph 32 and Chart 1 lead us to two conclusions. First, among residential customers, all these services spread slowly in their initial years, at the beginning of the so X|-called "S Curve.",|i yO-ԍSharon M. Oster, Modern Competitive Analysis at 12526, 29395 (Oxford Univ. Press 1994). Typically, a successful product's "S Curve" reflects (a) very few sales during its "launch period," which may last for years, (b) a steep rise in sales during the product's "take off" period as "positive feedback" from consumers stimulates additional sales and additional sales lower costs and prices per unit, and then (c) sales levelling off as  yO-the market approaches saturation. Carl Shapiro & Hal R. Varian, Information Rules: A Strategic Guide to  yO-the Network Economy at 178 (Harvard Business School Press 1999). Broadband for residential customers is today in a comparably initial stage. Therefore, although today all Americans do not have access to broadband, that fact alone does not mean that deployment is not reasonable and timely. Second, all these technologies eventually and, in the case of overtheair blackandwhite television, very quickly achieved nationwide penetration.   X @,0*%%ZZ3@ Ap h)DXԌ X-ԙHx III. DEPLOYMENT OF ADVANCED TELECOMMUNICATIONS CAPABILITY ă  X- A.XIntroduction (#  X-!34.` ` Before broadband capability can be made available to customers, communications companies must modify existing facilities or construct new ones, both of which can require substantial investment. In assessing the growth in the supply of broadband capability (deployment to all Americans), we first consider trends in investment in Hbroadband facilities, including both backbone and "last mile" facilities. We then examine deployment of facilities that serve the "last mile" to the consumer market, because the connection to ordinary consumers has traditionally been the least competitive and bandwidthconstrained part of the  X -communications network. Third, to ensure that broadband capability is being deployed to all Americans, we examine whether investment is occurring in areas, and broadband is becoming available to groups, that have been thought unlikely to be served in a reasonable and timely way. Finally, we consider the demand for broadband capability to ensure that consumer demand is being met.  X-  Xb- B.Deployment of Broadband Capability  X4-1.` ` Investment in Broadband Facilities  X-"35.` ` Although precise dollar figures and construction plans for broadband are not  X-generally available,,-Zi {Oh-ԍCompanies generally do not segregate such expenses and plans in their records (e.g., broadband and narrowband, backbone and last mile). Also, many companies consider such data to be of competitive value and therefore do not publish them. , publicly available data show that many companies in virtually all segments of the communications industry have made tens of billions of dollars of investment  X-in broadband facilities.~.i {O\-ԍThis Report discusses companies in groups (cable television, satellite, public utilities, etc.) solely for convenience. We are aware that the different companies of the same type may employ different broadband technologies, and that companies of different types may use the same one. Indeed, one of the most attractive prospects that broadband creates is the blurring of previously distinct regulatory categories and the blending of  {O~-old monopolies and oligopolies into a competitive "broadband market."  See Comments of U S West Commun., Inc., at 3.~  These sums are large even by the standards of America's communications business. For example, Ameritech plans to spend $3 billion in 1999 in"f .0*%%ZZ"  X-capital for all its communications networks (wireline, wireless, and cable television).//\i {Oy-ԍAmeritech to Invest $3 billion in Capital Expenditures for Communications Networks During 1999, Jan.  {OC-13, 1999, available at http://www.ameritech.com/media/release/view/0,1495,2309/1_1,00.html?, viewed Jan. 14, 1999./ Investment on this scale indicates strongly that, at the level of technological development and  X-manufacturing, advanced telecommunications capability is available at reasonable cost.:0i {Oo-ԍKathleen M.H. Wallman, Higher Ground: Reconceptualizing the Debate Over Deploying Advanced  {O9-Telecommunications Capability Under Section 706 of the Telecommunications Act of 1996 at 2123 (Dec. 1998)  yO -(quoting 1995 legislative history, S. Rep. No. 23, 104th Cong., 2nd Sess. at 50, stating that the Commission's inquiry "shall include an assessment by the FCC of the availability, at reasonable cost, of equipment needed to deliver advanced broadband capability.").:  X-#36.` ` Deployment of broadband, both backbone and last mile, is occurring on a major scale, for both business and consumer markets. American business and the capital markets are obviously betting that broadband will be successful in the business and consumer markets and many companies are rushing to seize part of that success. We expect that this sizeable investment by numerous companies will translate in the near future into significant deployment of broadband capability. In the following paragraphs, we discuss the investments made by various segments of the communications industry.  X -       00  X -$37.` ` The National Cable Television Association states that the cable industry's spending on the deployment of twoway broadband via highspeed cable modems in 1997  X -alone totaled $6 billion.1 i {O-ԍComments of National Cable Television Ass'n at 2. Cable modems are described infra in note 116 and in Appendix A,  6. One estimate is that 63% of all cable systems will be broadband X -ready by 2001.2 i {OR-ԍComments of Bell Atlantic at 6 & n.3, citing Allied Business Intelligence Press Release, www.alliedworld.com at CATV98.pdf release. TCI has committed to spend $1.8 billion to upgrade its plant, in part to provide broadband services. TCI's upgrades are expected to be 60% completed by the end of  Xy-1999 and 90% completed by the end of 2000.z3yT i yO~-ԍComments of AT&T Corp. at 14; Reply Comments of TeleCommun., Inc., at 6.z Another major cable operator, Comcast, has spent over $1.2 billion over the past three years to upgrade its cable systems, largely to be  XK-able to offer broadband.V4Ki yO!-ԍReply Comments of Comcast Corp. at 8.V In addition, Microsoft's investment of $1 billion in Comcast, the  X4-investments of $210 million each by Microsoft and Compaq in Road Runner,I54ti {OY$-ԍSee infra  54.I and AT&T's"450*%%ZZH" purchase of TCI for $48 billion all appear to be motivated in part by a desire to enter  X-broadband via cable television systems.t6i {Ob-ԍComments of BellSouth Corp., Exhibit A (The Forrester Report, Broadband Hits Home at 5,  {O,-http://www.forrester.com/cgibin/cgi.pl, visited Sept. 14, 1998). For more information about cable television  {O-companies' broadband activities, see Annual Assessment of the Status of Competition in Markets for the  {O-Delivery of Video Programming, CS Docket No. 98102, Fifth Annual Report, FCC 98335 at  3741, 4857,  {O-released Dec. 23, 1998 (Fifth Cable Competition Report).t  X-%38.` ` Long distance companies have recently constructed and upgraded enormous  X-amounts of broadband backbone. AT&T already has built 40,000 route miles of fibero7i yO -ԍFiber facilities can carry communications at broadband speeds.o in this  X-country, and it continues to boost its capacity.Q8i yOP -ԍComments of AT&T Corp. at 1819.Q In 1997, AT&T spent $7 billion to build  Xv-SONET rings9"vi yO-ԍSONET, or Synchronous Optical Network, is a standard of fiberoptical transmission rates above 51.84 Mbps, created to provide the flexibility needed to transport many signals with different capacities, and to provide  {OY-a design standard for manufacturers. See Harry Newton, Newton's Telecom Dictionary at 663 (1998)  yO#-(Newton). ĵ and improve its network.[:v i {O-ԍSee Comments of AT&T Corp. at 1819.[ It is also testing a technology that may increase the transport capacity of its existing network by a factor of ten without requiring it to lay any  XH-additional fiberoptic cable.N;Hi yO-ԍComments of AT&T Corp. at 19.N MCI quadrupled the speed of its Internet backbone, to OC12  X1-(622 Mbps), in 1996<^1i {O-ԍOC, or Optical Carrier, refers to a SONET (see supra note 57) optical signal. Optical carrier level is  {OZ-the optical counterpart of the basic rate, 51.84 Mbps, on which SONET is based. All higher levels, e.g., OC12,  {O$-are direct multiples of OC1. Newton, supra note 57, at 508. ē and doubled that capacity in 1997.=Z1i {O-ԍComments of AT&T Corp. at 2021, citing http://www.mc.com/aboutyou/interests/technology/icn/network.shtml. MCI recently divested its Internet backbone to Cable & Wireless. Another long distance carrier, Qwest, has invested $2.5 billion in, and is currently constructing, a broadband Internet  X -Protocol>" i yO!-ԍInternet Protocol is part of a family of protocols describing software that tracks the Internet address of  {Or"-nodes, routes outgoing messages, and recognizes incoming messages.  See Newton, supra note 57, at 37778. It is a standard that describes how a packet of data is transported across the Internet and is recognized as an incoming message. network of nearly 20,000 miles. It will operate at OC48 (2.5 Gigabits per second or gbps) or faster, and is scheduled to be completed in the second quarter of 1999. When" >0*%%ZZ^ " completed, the network will reach 130 cities, which account for approximately 80% of all the  X-voice and data traffic in the United States.?\i {Ob-ԍQwest Expands Network Infrastructure; Deploys Three DMS 250 Switches From Nortel,  {O,-http://www.qwest.com/press/12998.html, visited Nov. 24, 1998.  See also Comments of Qwest Commun. Corp. at 12, 6. Level 3 plans to invest $3 billion in broadband  X-deployment, including construction of a 15,000 mile fiberoptic cable network.@i yOo-ԍComments of Level 3 Commun., Inc., at 7; Reply Comments of Comcast Corp. at 9. UUNet Technologies announced in October 1997 a $300 million investment in backbone network infrastructure that will be leased to Internet service providers, large corporations, and  X-organizations with large Web sites.A|i {O -ԍSee UUNET First to Offer HighCapacity OC3 Internet Access, http://www.us.uu.net/press/1997/  {O -oc3.shtml, visited Dec. 8, 1998. UUNet is now owned by MCI/WorldCom. In addition, one company, IXC, has built an OC48  Xv-switched network that is fifty times faster than the common speed on backbone today.Bvi {O-ԍComments of Commercial Internet Exchange Ass'n at 11, citing http://www.psi.net/news/pr/98/  yO-ixccomplete.html.ľ Sprint also claims that its use of fiber optic technologies in its backbone should, by 2000, enable one pair of Sprint fibers to handle seventeen times today's combined volumes of  X1-AT&T, MCI, and Sprint without having to construct any new fiber.CD12 i yO-ԍComments of Sprint Corp. at 6. Highcapacity fiber goes into almost every telephone central office in this country, and new Dense Wave Division Multiplexing technology will increase its capacity hugely. Otis Port,  {O-Through a Glass Quickly: Advances in Optical Fiber Are Revolutionizing Telecom, Business Week, Dec. 7,  {On-1998, available at 1998 WL 19885338 (Wave Division Multiplexing " jacked up the data rate of each laser to 10 gigabits (10 billion bits) per second, four times today's usual drumbeat. . . . That's more than enough to accommodate all of North America's telecom needs. . . . Hollywood could deliver movies to theaters in the blink of an eye. Product development could be greatly accelerated because engineers could instantly access huge three-dimensional models of components and manufacturing operations."). According to one industry participant, three years ago available bandwidth on the Internet's backbone doubled  X -every year, but today it doubles every four to six months.D >i yO-ԍStatement of Alan Taffel, UUNET Technologies, at Spring Internet World Conference, Los Angeles,  {O-March 19, 1998, cited in Comments of Commercial Internet Exchange Ass'n at 11 n.19.  X -&39.` ` Since 1993, over $20 billion has been invested in the space industry, of which  X -much has gone into the broadband satellite telecommunications sector.E i yO"-ԍX Space Publications & A.T. Kearney, State of the Space Industry, at 10 (1998). (#Ə Some estimates reveal that approximately $65 billion in financing will be required over the next five years to" (E0*%%ZZ"  X-fund the next generation of satellites, including broadband satellite systems.BFi {Oy-ԍXId.(#B Satellite  X-infrastructure revenues for the time period 19972001 are estimated at $277 billion.OGZi {O-ԍXId. at 8. (#O The Commission has granted fourteen Kaband licenses, including thirteen geostationary systems  X-and one nongeostationary system, Teledesic, which will deploy a low earth orbiting system.H i yOX-ԍThese geostationary Kaband licensees include systems owned by Comm Inc., EchoStar Satellite Corp., GE American, Hughes Space & Communications, KaStar Satellite Communications, Loral Aerospace Holdings, Inc., Lockheed Martin Corp., MorningStar Satellite Co., NetSat 28, Orion Atlantic, Orion Network Systems, PanAmSat Corp., and VisionStar, Inc.  Teledesic, for example, has committed to spend $9 billion building worldwide satellite  X-networks for broadband service.fIi {O-ԍComments of the Progress & Freedom Foundation at 21; Comments of Teledesic LLC passim. The construction of satellite projects has been robust, as seen by estimates that revenues of companies in the business of constructing satellite infrastructure will increase from $49 billion in 1997 to $63 billion in 2001  yOl-ԩ an overall growth rate of almost twentynine percent. Space Publications & A.T. Kearney, State of the  yO4-Space Industry, at 8 (1998). Not all of these projects will deliver broadband service. f  X_-'40.` ` As of 1997, utilities had installed 40,000 route miles of fiber optic cable  XH-representing over 750,000 fiber miles,JH i yO-ԍOne route mile of fiber, made up of many strands of fiber, can represent many fiber miles. and they intend to install another 36,000 route miles  X1-in the next few years.rK1i yO-ԍAmerican Public Power Ass'n Comments at 12; Comments of UTC at 5.r Actual and planned utilityaffiliated ventures in Boston, New York, Philadelphia, Washington, and San Francisco areas have a capital budget for 1998 and 1999  X -that is estimated at $850 million.gL i yOZ-ԍReply Comments of RCN Telecom Services, Inc., at i, 3.g  X -(41.` ` Competitive LECs have played a major role in the introduction of fiber rings  X -and new broadband technologies such as Asynchronous Transfer Mode,M 6i yO-ԍAsynchronous Transfer Mode or ATM is a very high speed, lowdelay, connectionoriented, packetlike  {Om -switching and multiplexing technique. Newton, supra note 57, at 6768. Asynchronous, in data communications, refers to a transmission method in which information is sent one discrete character at a time. Each letter, number or other character is delineated by start and stop indicators at the beginning and end of the  {O"-character. After a time interval, another character is sent." See Telecom Publishing Group, Telecom Lingo  {O#-Guide, http://www.telecommunications.com/lingo/a.htm, visited Jan. 25, 1999. frame relay, N$ i yO-ԍFrame relay is a wideband (64 kbps to over 1.5 Mbps) high-speed packet-based data switching interface standard that transmits bursts of data over wide area networks. Frame relay packets vary in length from 7 to  {O -1024 bytes. Because frame relay is data oriented, it is not usually used for voice or video.  See The  {O-Communications Library, http://www.wcom.com/tools-resources/communications_library, visited Dec. 8, 1998.  and" N0*%%ZZ "  X-DSL.POi yOe-ԍDSL, or digital subscriber line, is a generic name for a family of evolving digital services to be provided over local telephone facilities. Such services propose to give the subscriber up to 8 Mbps downstream  {O-to the customer and somewhat fewer bits per second upstream. Newton, supra note 57, at 220 (1998). For a  {O-description of how DSL technology operates, see Comments of Coalition of Utah Ind. Internet Service Providers at 1. DSL is also described in Appendix A,  45.P Competitive LECs, both wireline and radiobased, have raised between $15 and $20  X-billion to invest largely in broadband.{Ph i {O -ԍSee Comments of the Association for Local Telecommun. Services at 9.{ The Commission's most recent report on fiber deployment states that the amount of fiber owned by competitive LECs has been growing  X-rapidly.Q i yOf-ԍJ. Kraushaar, Fiber Deployment Update End of Year 1997 at 3839, released Sept. 8, 1998. For example, the members of DSL Access Telecommunications Alliance (DATA)R i yO-ԍThey include Rhythms NetConnections, Inc., FirstWorld Commun., Inc., and First Regional TeleCOM, LLC. have raised over $1 billion in private markets for DSL ventures. Another competitive LEC, Intermedia, has raised $2.5 billion in the last eighteen months with which to build broadband  Xv-facilities.]Svi yO -ԍComments of Intermedia Commun., Inc., at 11.]  XH-)42.` ` All this investment, especially that by cable television companies and competitive LECs, appears to have spurred incumbent LECs to construct competing  X -facilities.T0 X ri yO=-ԍIt is widely believed that incumbent LECs' recent moves to offer broadband to residential customers are  {O-primarily a reaction to other companies' entry into broadband. See Comments of AT&T Corp. at 10 ("ILECs plainly can and will deploy ADSL when a competitor emerges to challenge their bottleneck control over last mile facilities," then giving examples of SBC and U S West reacting to initial moves by competitive LECs and cable  {O_-television systems).  See also id. at 25, n.42 at 28, and Appendix B ("NonILEC Deployment of Broadband  {O)-Services and ILEC Responses"); Comments of Information Technology Ass'n of America at 7 & n.18, citing in  {O-part Merrill Lynch, Wireline Communications Equipment: Trends in xDSL Deployment at 2, 4 (June 22, 1998); Joint Comments of MCI Commun. Corp. & WorldCom, Inc., at 18 ("Only now, after some CLECs have begun to experience limited success in a few niche markets, and several cable operators have announced highspeed Internet access using cable modems, have the ILECs awakened to discover the promise of xDSL services.") (footnote omitted); Comments of Virtual Hipster at 2; Comments of Retail Internet Service Providers at 5; Comments of Telecommun. Resellers Ass'n at 9, 10, 15. U S West notes that when cable televisionbased broadband was available in three cities it served, it"$S0*%%$%" announced a competing service in 14 states and 43 cities. Reply Comments of U S West Communications, Inc., at 6 n.9. Accordingly, incumbent LECs' entry into broadband, though motivated by cable's entry, may go beyond it. That may, in turn, spur further expansion by cable and others. Incumbent LECs, mainly the Bell Operating Companies (BOCs) and GTE, are" T0*%%ZZB "  X-also investing billions of dollars in broadband technologies.cUi yO-ԍComments of National Cable Television Ass'n at 15.c BOCs and GTE, for example,  X-have announced plans to offer broadband to approximately twenty million homes this year.Vxi {O-ԍSee Comments of MediaOne Group, Inc., at 12 & Appendix A (detailing projections of the five BOCs and GTE). SBC has announced a "massive rollout" of ADSL, "targeting more than 500 central offices  X-and 9.5 million residential and business customers by year-end./W\i {O> -ԍTelephony, Commun. Daily, Jan. 13, 1998. See also Comments of SBC Commun. Inc., at 5; Bell  {O -Atlantic & SBC Push Merger Plans to Analysts, Commun. Daily, Nov. 17, 1998, available at 1998 WL 10697764./ In Bell Atlantic's service area, ADSL is available now to some customers in the Washington, D.C., area and in Pittsburgh, with plans to add Philadelphia and the Hudson waterfront of New Jersey next year. Bell Atlantic has formed a marketing alliance with America Online, Inc., in which Bell  X_-Atlantic hopes, by the end of 1999, to make ADSL available to seven million subscribers. X_ i {O-ԍTelephony, Commun. Daily, Jan. 13, 1998; Bill Alpert, Getting On the 'Net, and Fast: No More  {O-Traffic Jams, Barron's, Dec. 7, 1998, available at 1998 WL-BARRONS 21715357.   XH-Its goal is to offer ADSL to fourteen million customers by the end of 2000.^Y^HR i {OK-ԍBell Atlantic to Offer Special ADSL Service for AOL, Commun. Daily, Jan. 14, 1999; ZDNet, AOL,  {O-Bell Atlantic to Offer Speedy Access, available at  {O-http://www.zdnet.com/zdnn/stories/news/0,4586,2186782,00.html, visited Jan. 14, 1999.^ And BellSouth has announced plans to offer ADSL service available to 1.7 million customers in 30 markets  X -by the end of 1998, and in 23 additional markets in 1999.Z xi {OC-ԍBellSouth Rolls Out ADSL to ISP, CLEC, & IXC Business Sectors, RBOC Update, Oct. 1, 1998,  {O -available at 1998 WL 2078284.  X -*43.` ` In addition, the Commission has allocated and licensed high bandwidth radio spectrum that can readily be used to deliver broadband terrestrially. Providers using this spectrum are beginning to deliver a range of fixed services, including voice, data, and video,  X -using frequencies in the 24, 28/31, 38 and 39 GHz bands.[ i yO,"-ԍSome of these providers are carriers, mentioned in previous paragraphs, who are primarily wirebased. Although the marketing focus for most fixed wireless companies is currently on small and mediumsized businesses, some may"d[0*%%ZZ"  X-begin offering limited residential service on this spectrum within five years.$\i {Oy-ԍSee Reply Comments of WinStar Communications, Inc., at 3 n.7. See also Ray Tiernan, Look Ma, No  {OC-Wires, Dow Jones News Service, Dec. 23, 1998 ("Teligent . . . is looking to [provide] wireless phone service that will offer small businesses wireless Internet access at speeds as fast as a T1 or higher, . . . . Teligent's system uses a single base station to communicate with several subscriber antennas on the sides of homes and apartment buildings, . . . .").$  X-+44.` ` In sum, it appears that a substantial investment in broadband technologies is  X-taking place across virtually all segments of the communications industry.]|i yO -ԍCertain additional activity investment in broadband, which is directed primarily at future deployment of last miles, such as Third Generation CMRS, is discussed in the following section. As one  X-commenter states, "[a]ccess to capital is very plainly not an obstacle to the effective provision  X-of DSL services."^i {O-ԍComments of DSL Access Telecommun. Alliance at 7 (emphasis in original). Accord, Comments of NorthPoint Commun., Inc., at 1; Comments of Transwire Commun., Inc., at 11. MCI echoes this perception, saying "[i]f there have been any capacity constraints [in backbone], it is not for lack of investment. Instead, it has been because exponential growth in Internet usage has surpassed expectations, although, in the end, supply  XH-has generally kept pace with such demand."|_H. i {O'-ԍSee Joint Comments of MCI Commun. Corp. & WorldCom, Inc., at 20 n.31.| In light of these facts, we disagree with the claim that there is a significant, nationwide, and likely persistent shortage of Internet  X -backbone.`` i {O-ԍSee Comments of Bell Atlantic at 1618. ` As the text above makes clear, supply, especially of backbone, is increasing rapidly. We find that backbone facilities for broadband are being deployed in a reasonable and timely fashion. It appears to us that any shortages are relatively small in scope and duration and reflect not lack of capital, construction, or technologies, but the unforeseeable and enormous increases in demand for one of the most successful technologies in recent  X -history.a R i {O-ԍSee Comments of Data Access Telecommun. Alliance at 6 ("there are multiple backbone providers . . . all in rigorous competition with each other to provide the market with still more bandwidth capacity for the backbone. . . . [T]here are no signs of any impending collapse in spite of the ravenous consumer appetite for  yO-bandwidth."); Comments of e.spire Commun., Inc. at 46; Comments of the Information Technology Ass'n of America at 4 ("there is no shortage of Internet backbone facilities."); Comments of Intermedia Commun., Inc., at 67 ("ILEC claims of 'bandwidth famine' are seriously overstated even in rural areas of the nation."); Comments of PSINet Inc., at 59; Comments of Qwest Commun. Corp. at 22; Reply Comments of MCI WorldCom, Inc., at 8 ("Supply by the industry is generally keeping up with demand, even though demand is  {O"-growing at rates that are extraordinary and hard to predict."). Cf. Comments of Sprint Corp. at 6 (attributing congestion on the Internet to "the LEC network or . . . the ISPs' modem pools").   Ј We expect that the sizeable investment will alleviate any shortterm "shortages" in" a0*%%ZZ " broadband backbone.  X- _2.` ` The Last Mile to the Residential Consumer  X-,45.` ` The last mile to the residential consumer, historically served by telephone and cable television incumbents, has generally been the least competitive and most bandwidthconstrained part of the communications network. Compared to a long distance line, a facility serving the last mile is likely to be expensive on a per customer basis to deploy, to have linear rather than exponential growth in use, and _to require high maintenance per user. In addition, existing telephone and cable facilities were largely paid for in past decades, when construction costs were lower. They were also paid for by captive ratepayers, under regulatory protection from competition and/or inherent economic conditions that conferred a  X -de facto monopoly and ensured recovery of costs, however slowly. The incumbent LEC in each area is also financially strong and well staffed. These factors, among others, have combined to make entry against telephone and cable incumbents very difficult. This has denied residential consumers all the benefits of competition, which lowered prices, increased choices and usage, and sped up innovation in telephones, long distance, and mobile services over the past decades.  XM-   X6--46.` ` Broadband, however, opens the possibility of new facilities to serve the last mile to the home. Although telephone and cable incumbents already have facilities serving  X-the last mile, traditional telephone and cable plant are not ideally suited for broadband.bi {O-ԍSee Comments of Cincinnati Bell Tel. Co. at 9; Comments of Bell Atlantic at 12, citing Networks:  {OK-XDSL, ADSL: What to Expect, LAN Magazine (Sept. 1, 1997); Comments of BellSouth Corp. at 2 ("providing widescale broadband capability is a considerable feat, even for an ILEC. It requires developing technologies, retrofitting loops or laying new networks, investing in costly new equipment and training service personnel."), 1314. Ameritech, for example, estimates that xDSL will not work on 45% of its loops today, and  X-may never work on 20% of them.{c|i {O-ԍAmeritech Comments at 7 nn.910.  See also Comments of AT&T Corp. at 89 ("Most ILEC loops can be upgraded to support ADSL. . . . With [digital loop carrier] lines included, an estimated 6080% of RBOC access lines are ADSL qualified") (footnote omitted); Comments of Bell Atlantic at 12; Comments of SBC Commun. Inc. at 57. In the same vein, another commenter states that "with the appropriate regulatory incentives, Bell Atlantic's new xDSL service can reach up to 80 percent of telephone subscribers in the Bell Atlantic region." Comments of United Homeowners Ass'n at 12.{ Similarly, today's cable television plant, even after upgrading for twoway broadband operations, may not be capable of providing all users in a  X-neighborhood with very high speeds.d i {OS$-ԍComments of the Progress & Freedom Foundation at 89, 27. See also infra Appendix A at  6. Also, cable television systems are not now deployed" d0*%%ZZ" in many business districts. Indeed, it may be that no one current technology is capable of meeting all residential consumers' demands for broadband. These factors may be an impediment to all Americans receiving advanced services.  X-.47.` ` A pessimistic observer might predict that the limitations of some broadband technologies will lead to a patchwork of local broadband monopolies, with most new entrants remaining fringe players. In the consumer market, in this view, DSL will be the only successful technology in one neighborhood, cablebased broadband in the next neighborhood, and satellites in rural areas. In addition, certain commenters argue that if economies of scale and scope in broadband for the consumer market are significant, the present headstart of the cable companies will give them an insuperable first mover advantage and leave them with the kind of dominance they still enjoy in their core market for multichannel video program  X -distribution (MVPD).ue i yOe -ԍComments of Bell Atlantic at 6 & nn.56 (citing two independent estimates that eventually cable television companies will have an 80% market share); Comments of BellSouth Corp., Exhibit A (The Forrester  {O-Report, Broadband Hits Home at 2, http://www.forrester.com/cgibin/cgi.pl, visited Sept. 14, 1998); Fifth Cable  {O-Competition Report, supra note 54, at  126 ("Local markets for the delivery of video programming . . . continue to be highly concentrated and characterized by substantial barriers to entry . . .").u While this pessimistic view may include broadband reaching all Americans, it does not foresee competition for most residential consumers.  X -/48.` ` We believe it is premature to conclude that there will not be competition in the  X-consumer market for broadband. The preconditions for monopoly appear absent.f|i {O-ԍSee, e.g., Comments of BellSouth Corp. at 3; Reply Comments of Bell Atlantic at 910. Incumbent LECs do, however, have market power in the related market for narrowband residential telecommunications. Today, no competitor has a large embedded base of paying residential consumers. The record does  Xb-not indicate that the consumer market is inherently a natural monopoly.gbi yO-ԍIf it were, it is unlikely that there would be as much entry, investment, and construction in the last mile  {O-segment as there is. See infra  5460. Although the consumer market is in the early stages of development, we see the potential for this market to accommodate different technologies such as DSL, cable modems, utility fiber to the home, satellite and terrestrial radio. The facts that different companies are using different  X-technologies to bring broadband to residential consumersh0 i {O-ԍSee, e.g., Comments of GTE at i; Comments of National Tel. Coop. Ass'n at 3 & n.5.  See also Comments of Kielsling Consulting LLC at 2 ("Each technology is being embraced by different interests."). and that each existing broadband technology has advantages and disadvantages as a means of delivery to millions of" h0*%%ZZ"  X-customersuii {Oy-ԍComments of AT&T Corp. at 13 & n.18, citing IDC Flash, DSL Market Gains Direction at 5, Jan. 1998 ("cable modem operators need to install fiber in their access networks at a fixed cost that IDC estimates to be on the order of $100 billion to cover all of the cable systems in the U.S. . . . In contrast, DSL does not require massive investments to upgrade the [LEC] access network. In addition, most of the costs to deploy DSL are variable rather than fixed the service provider can deploy new equipment as new subscribers come on line."); Comments of Comcast at 11; Comments of DSL Access Telecommunications Alliance at 6; Comments of Mindspring Ent., Inc., at 24; Comments of Kielsling Consulting LLC at 6; Comments of Grant Nodine (Bell Atlantic now unable to offer ADSL service to customer with a Macintosh PC); Comments of the Progress & Freedom Foundation at 2329; ; Comments of SkyBridge at 89 (outlining advantages of SkyBridge's satellite  yO -system); Comments of United Homeowners Ass'n at 13 (describing limitations of xDSL). u opens the possibility of intermodal competition, like that between trucks, trains,  X-and planes in transportation.sjb i yO -ԍComments of the Progress & Freedom Foundation at 23, 710, 2339.s By the standards of traditional residential telecommunications, there are, or likely will soon be, a large number of actual participants and potential entrants in  X-this market. Anticompetitive coordination among competitors is difficult in such markets.kZ i {O^-ԍSee Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 238 (1993) ("Tacit coordination is facilitated by a stable market environment, fungible products, and a small number of variables  yO-upon which the firms seeking to coordinate their pricing may focus.").#Xj\  P6G; XP#у  X-049.` ` Moreover, it is very likely that the imperfections of existing broadband  Xv-technologies will lead to new technologies that will improve broadband.lvi {O;-ԍSee Comments of ALTS at 14 ("Anyone who has followed telecommunications and information technologies for any period will recognize that the technology that is touted this year may end up either preempted by an entirely new or different technology, [which was earlier] not of use or of interest to consumers, or too difficult or costly to implement.") (footnote omitted); Joint Comments of MCI Commun. Corp. and  {O]-WorldCom, Inc., at 11.  See also Comments of Moultrie Ind. Tel. Co. at 4 ("Moultrie views xDSL as an interim  {O'-and temporary technology, similar to 8Track audio cassette."). Cf. Comments of Bell Atlantic, Attachment A at 3 (quoting Salomon Smith Barney (First Call, Aug. 26, 1998) that "anywhere between 66%75% of business access lines in U.S. are in buildings where radio frequency will be the more economic alternative relative to  {O-either Bell copper loops, T1s or fiber."). For descriptions of developing technologies, see Comments of Media Fusion Corp., New World Paradigm, Ltd. & Khamsin Technologies, and Comments of Northern Telecom, Inc., at 12.  Improvements may be most notable in the use of wirelessbased broadband technologies to reach isolated  XH-rural homes and other highcost areas,mH|i yOu -ԍComments of PSINet Inc., at 2 ("PSINet is actively exploring satellite and wireless delivery mechanisms  yO=!-for broadband delivery in rural and other unserved areas"); Comments of the Organization for the Promotion and Advancement of Small Telecommun. Cos. (OPASTCO) at 78; Comments of PSINet Inc., at 8 ("PSINet is actively exploring satellite and wireless delivery mechanisms as a way for ISPs serving rural and other highcost areas to connect to PSINet's backbone at high speeds."); Comments of SkyBridge at 4 ("new satellite technologies such as SkyBridge can provide . . . the availability of broadband telecommunications to literally"]$l0*%%$" everyone"), 6; Comments of TDS Telecom. Corp. at 7 (expressing doubt that broadband will ever reach rural America through existing wireline technology).  to avoid the expense of laying wire for the last"H m0*%%ZZ"  X-mile,nz i {O-ԍSee Comments of Personal Commun. Ind. Ass'n at 4; Comments of the Rural Telecommun. Group at 12; Comments of Teligent, Inc., at 2. Sunk investment, in this case, is investment that cannot be reused for another customer. A wire laid to someone's home cannot be used to serve another person's home. This customerspecific "sunk" nature of the investment in such lines makes wouldbe providers reluctant to lay them unless the customer has made a longterm commitment. Radiobased last miles, however, can be reused to serve any customer within range of a radio tower or other central facility. A dish used at one home can be moved to another home and reused there. Central antennas can be refocused in another direction.  and to provide wireless "last hundred feet" that avoid extensive work inside apartment buildings and other multidwelling settings.  X-150.` ` The consumer market for broadband should be characterized by new products and services being offered and costs falling as a result of technological change. At the retail level, in addition, competition among providers of broadband service may occur on price (different prices and different rate structures (flatrate and usagesensitive)), quality of service  X_-(different volumes and speedsYoX_b i yOr-ԍSome forms of broadband, such as those based on geostationary satellites, can transmit large amounts of information, but only with a few seconds of delay. They might, therefore, be very suitable for transmitting documents, but not for interactive video games that require hairtrigger reactions.Y of transmission in one or both directions), warranties against outages, technical features (symmetrical and asymmetrical bandwidth, storage space), geography (one technology working best in one kind of topography), and userfriendliness (some customers wanting just easytouse email and fast web access and others wanting their  X -own personal web pages and major multimedia applications).np i {O6-ԍCf. Comments of Retail Internet Service Providers at 4.n  X -251.` ` Indeed, new broadband technologies might even be capable of creating competition for the telephone and cable incumbents in the core markets of narrowband telephone and MVPD that they dominate today. It may be that their rivalry in broadband will lead to each entering the other's core market. Or, perhaps these core narrowband markets  Xy-will become shrinking adjuncts to a larger, more rivalrous broadband market./qyi yO>-ԍJoseph A. Schumpeter, The Theory of Economic Development at 83 (Oxford Univ. Press 1963) ("The opening up of new markets . . . illustrates[s] the same process of industrial mutation if I may use that  {O -biological term that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.") (italics in original, footnote omitted)./   XK-352.` ` Thus, we do not foresee the consumer market for broadband becoming a"Kq0*%%ZZ+" sustained monopoly or duopoly. We will fight any attempt to make residential broadband such a market, because it would not perform well for consumers. Economic theory teaches that, in countries that are rich in resources and in which products can continually improve in  X-quality, consumers benefit from relatively fast innovation.ri {O4-ԍSee Gene M. Grossman & Elhanan Helpman, Quality Ladders in the Theory of Growth, Rev. Econ.  yO-Studies 43-61 (Jan. 1991). Innovations arrive sooner when  X-many, rather than few, firms enter.s^"i {Ow-ԍSee Tom Lee & Louis L. Wilde, Market Structure & Innovation: A Reformulation, Q.J. Econ. 429-436  {OA -(March 1980); Glenn C. Loury, Market Structure & Innovation, Q.J. Econ. 395-408 (Aug. 1979); James M.  {O -Zolnierek, Firm Level Behavior in Repeated R&D Races, Eastern Econ. J. 293-308 (Summer 1998).  Therefore, consumer welfare will be increased by more entry into the market for broadband facilities and services.  X_-453.` ` Our experience in communications markets teaches that entry by many competitors is the best paradigm by which to bring broadband to all Americans. Entry by many competitors is more likely to bring low prices, high quality, constant innovation and improved priceperformance ratios, a variety of different retail services, and as many ISPs and content providers as the market will support. In the following paragraphs, we outline the current deployment of improved and entirely new broadband facilities that serve the last mile to residential consumers. We begin with those that seem most advanced in deployment at this time.  X-554.` ` Cable television companies, as noted in paragraph 37 above, have begun upgrading their cable facilities to provide broadband capability. The most popular offering  Xb-of broadband to residential consumers is via "cable modems,"t bHi yO[-ԍA cable modem is a modem designed for use on a television coaxial cable circuit. Cable modems provide asymmetric bandwidth, with more capacity in the downstream direction (to the customer premises). There are several characteristics of cable modems which distinguish them from dialup modems and most other data devices used in public widearea networks: (1) they are capable of handling multimegabit speeds, (2) they require relatively little call setup (their socalled "always on" feature), and (3) the bandwidth to which they have access is shared by end users. This last characteristic means that cable modem systems are potentially susceptible to congestion occurring as many users attempt to share a common bandwidth. In contrast, in the  {O-DSL solutions that LECs are deploying, the last mile bandwidth to the user is dedicated. Newton, supra note  {O-57, at 11819. offered by cable television companies within their cable service territories. These include services such as @Home and Road Runner. @Home's base of homes with access to two-way upgraded plant increased  X-from 7.9 million on June 30, 1998, to 10 million on September 30, 1998.ui {O"-ԍSee @Home Network Reports Subscriber Base Grows to 210K Upgraded Homes Passed Increases[sic]  {O#-to 10M, http://www.home.net/corp/news/pr_981013_01.html, visited Nov. 16, 1998. As noted above,"xu0*%%ZZ"  X-"deployment" does not necessarily mean that service is available in a practical sense.Jvi {Oy-ԍSee supra note 100.J At this time, we lack information on how many homes passed are actually capable of obtaining the service. According to most estimates, cable television companies now have at least  X-350,000 residential customers for their broadband offerings,wZi {O-ԍSee Comments of AT&T Corp. at 1314, citing Cable Datacomm News, September 1998 (in mid1998 there were approximately 300,000 cable modem subscribers in North America, the vast majority of them  {OX-presumably in the United States); Chris O'Malley, No Waiting on the Web, Time Magazine at 76 (Nov. 16,  yO" -1998) (about 350,000, according to Jupiter Communications, a research firm); Comments of the Progress &  {O -Freedom Foundation at 33, quoting, Bowermaster, Cable Modems Outpace ADSL (450,000, compared to  {O -approximately 25,000 ADSL users ).  See also Comments of U S West Commun., Inc., at 6, citing Forrester  yO~ -Research, HighSpeed Internet Access to Reach 16 Million U.S. Households by 2002, http://www.forrester.  yOF -com/press/pressrel/98901.htm; Letter to the Editor, from Matt Wolfrom, Public Relations Director for @Home  yO -Network, Boardwatch Dec. 1988 at 14 (in unspecified geographic territory, "cable Internet services reach more than 300,000 subscribers"). although other estimates are as  X-high as between 425,000 and 700,000.5x i {OO-ԍComments of BellSouth at 3233 & Exhibit A at 5. See also Catherine Yang, Filling the Need for  {O-Speed, Business Week at 50, 51, Dec. 28, 1998 (less than 500,000); Telecommunications Industry Association,  {M-The Future of Broadband: A Case for FCC Action to Spur Deployment of Advanced Telecommunications  {O-Capability at 13, filed Dec. 23, 1998 (approximately 700,000 subscribers to cable modem service, citing Multimedia Telecommunications Association and The Yankee Group). For more about cable television  {O=-companies' broadband offerings, see Fifth Cable Competition Report, supra note 54, at  4857.#Xj\  P6G; XP#5  Xv- 655.` ` A growing number of public utilities are offering broadband within their utility service territories. They generally offer broadband capability in joint ventures with software  XH-and content providers.yHzi yOs-ԍSeveral such ventures involve RCN, which owns Erols and other Internet service providers. Comments of Bell Atlantic at 5. Utilitybased offerings have begun in major northeastern cities, San Francisco, and have begun or are under study in smaller cities such as Cedar Falls, Iowa (population 34,298), Glasgow, Kentucky (population 12,351), and Batavia, Illinois (population  X -17,016).z i {O-ԍSee Comments of American Public Power Ass'n, Appendix A passim. All local population figures in  yOP-this Report are taken from the 1990 Census, U.S. Bureau of the Census, Census of the Population: 1990. Generally, these ventures provide highspeed Internet access on their own fiber inside the utilities' existing conduits. According to one estimate, they have passed 122,000  X -homes with "advanced fiber,"d{ ,i yO"-ԍComments of Bell Atlantic at 7 & Attachment A at 3.d although no customer numbers are available.g| i yO-ԍSome utilities that wish to enter the broadband market are municipally owned. As we have said before, we encourage states to avoid enacting absolute prohibitions on municipal entry into telecommunications. "Municipal entry can bring significant benefits by making additional facilities available for the provision of  {O-competitive services." The Public Utility Comm'n of Texas, Memorandum Opinion & Order, 13 FCC Rcd 3460,  {O-3549 (1997), affirmed sub nom. City of Abilene v. FCC, D.C. Cir. 971633 (Jan. 5, 1999).g " ||0*%%ZZ "Ԍ X-ԙ 756.` ` A number of competitive LECs, such as Covad, Rhythms NetConnections, e.spire, and Network Plus are providing broadband to residential consumers, chiefly in the  X-"small office, home office" submarket.}|i {O-ԍSee Comments of BellSouth at 2324. See also Joint Comments of MCI Commun. Corp. & WorldCom, Inc., at 16 & n.22. Sprint plans in early 1999 to offer its Integrated On  X-Demand Network (ION) service, which uses DSL~i {OB -ԍComments of Sprint Corp. at 6; Telephony, Commun. Daily, Dec. 8, 1998, available at 1998 WL 10697914. and which it says will greatly increase  X-the speed and bandwidth of its own and other LECs' facilities.0 i yO-ԍComments of AT&T Corp. at 21; Comments of Sprint Corp. at 56 (ION makes possible "virtually unlimited bandwidth . . . at speeds up to 100 times faster than today's conventional modems."). In addition, at least one competitive LEC, MachOne, has announced that it intends to concentrate on mass market  Xv-residential customers.nv i yO-ԍEx Parte presentation by MachOne Commun., Inc., Nov. 4, 1998.n At this time, we lack information on the number of homes passed by competitive LEC capability as well as the number of homes to which such capability is available as a practical matter.     X - 857.` ` In a significant number of cities, socalled "wireless cable," MDS, or MMDS companies are using spectrum around 2 GHz to offer broadband services to residential  X -consumers.k i yO-ԍ"Wireless cable" is described in Appendix A,  8.k These cities include not only New York City and the San Francisco Bay area, but also such smaller cities as Jackson, Mississippi (population 196,637), and Sherman, Texas (population 31,601). One estimate is that several million residential consumers could now  X -obtain broadband from such companies.$ i yO-ԍComments of AT&T Corp. at 16; Comments of BellSouth Corp., Exhibit E at 2 (Cable Datacom News,  yO-Wireless Cable Modem Trials and Commercial launches in North America,  {O -http://CableDatacomNews.com/cmic12.htm, visited Aug. 26, 1998). For more about wireless cable companies'  {OZ!-broadband offerings, see Fifth Cable Competition Report, supra note 54, at  85. We lack information on the actual number of households subscribing to broadband service from MMDS providers.         Xb- 958.` ` Incumbent LECs have improved their narrowband lines and assert that they are planning to offer broadband on a large scale. Their plans for expansion in 1999 and beyond,"K0*%%ZZg"  X-some of which were described in paragraph 42 above, are ambitious.,d i {Oy-ԍSee Comments of BellSouth Corp. at 2, 14, 15; Comments of Comcast Corp. at 10; Comments of GTE at 10 n.23 ("GTE plans to deploy ADSL service in portions of 14 states"); Comments of Kielsling Consulting LLC at 78 (list of Bell offerings or plans taken from their web sites); Comments of MediaOne Group, Inc., Appendix A, stating that Ameritech now provides DSL service to portions of Chicago and Ann Arbor and will make ADSL available to 70 percent of all inregion homes by the year 2000; Bell Atlantic intends to deploy ADSL to 2 million households in Washington, D.C., Pittsburgh, Philadelphia, and the Hudson River Waterfront in New Jersey by the end of 1998, and expects to deploy ADSL to over 6 million households in 1999; BellSouth will make ADSL service available to 1.7 million customers in 30 markets by the end of 1998, and 23 additional markets in 1999; U S West estimates that it will offer ADSL services to approximately 5 million customers in 40 cities in 14 states this year; and GTE plans to equip approximately 6 million lines with ADSL in 300 central  {OK -offices in 16 states by the end of 1998.  See also Joint Comments of MCI Commun. Corp. and WorldCom, Inc., at 16 n.20; Comments of National Cable Television Ass'n at 1617., According to one estimate, incumbent LECs now provide broadband to approximately 25,000 residential  X-consumers.b i yOw-ԍComments of BellSouth at 3233 & Exhibit A at 35.b         X- :59.` ` All of these residenceoriented providers of broadband indicate that they intend  X-to expand their offerings quickly. i {O-ԍSee, e.g., Comments of Bell Atlantic, Attachment A (aggressive rollout of cable modems in 12 states in Bell Atlantic's region). The providers of Road Runner, for example, state that, by the year 2000, it will be available to all of the 27 million homes passed by Time Warner  X_-and MediaOne as well as those homes passed by other affiliated cable companies."_i {O-ԍSee Company Profile, http://www.rr.com/rdrun/company/index.html, visited Dec. 8, 1998.  X1- ;60.` ` In addition, new satellitebased providers Loral's CyberStar unit,1pi {OR-ԍChris O'Malley, No Waiting on the Web, Time Magazine at 76 (Nov. 16, 1998). Hughes'  X -Spaceway, Lockheed Martin's Astrolink, SkyBridge, and Teledesic,& i {O-ԍSee Comments of AT&T Corp. at 17; Comments of Bell Atlantic at 78; Comments of PanAmSat Corp.  {O-passim; Comments of SkyBridge L.L.C. at 7. Merrill Lynch estimates that the many U.S. households who do not receive a landbased broadband service will be a prime target for these and other Kaband satellite carriers.  {O)-Merrill Lynch, Global Satellite Marketplace '98 at 13234, April 22, 1998. See also Appendix A,  9. among others are planning to enter the residential broadband market in the next decade. A growing number of public utilities and wireless cable companies may also enter the residential broadband market. Still more entry for residential consumers is possible via "Third Generation" mobile wireless" 0*%%ZZ! "  X-broadband service by CMRS providers, AT&T's "Project Angel,"Yi {Oy-ԍSee, e.g., Comments of BellSouth Corp. at 29. See generally Comments of Cellular Telecommun.  {OC-Indus. Ass'n passim; Comments of Personal Commun. Indus. Ass'n at 2123; Comments of the Rural Telecommun. Group at 18; Comments of SBC Commun. Inc., at 13. AT&T's Project "Angel[] costs have plummeted to about $700 per household for two phone lines and highspeed Internet access" according to  {O-Peter Elstrom, AT&T's Wireless Path to Local Service, Business Week at 53, Dec. 28, 1998.Y overtheair broadcasters  X-using digital broadcast spectrum,\~i {O-ԍSee, e.g., Comments of BellSouth Corp. at 30.  See also Jube Shiver, Jr., The Cutting Edge: Net via TV Airwaves Is Not Clicking, Despite Big Backers, Computers: Price-Conscious Consumers Show Little Interest in  {O -WaveTop, a Video Datacasting System, Los Angeles Times, Sept. 7, 1998, available at 1998 WL 18871751. local multipoint distribution service at 28/31 GHz,i yO< -ԍComments of AT&T Corp. at 15; Comments of Bell Atlantic at 78; Comments of Bell South Corp. at 2829; Comments of Kielsling Consulting LLC at 8 ("LMDS may still be a year or more away from sizeable deployment"). Some rural companies may use LMDS. Comments of the Organization for the Promotion and Advancement of Small Telecommun. Cos. (OPASTCO) at 3; Comments of SBC Communications Inc., at 13. LMDS is described in Appendix A,  7.  X-providers of service at 24, 38, and 39 GHz,PR i {O-ԍSee, e.g., supra  43.P and other high bandwidth wireless  X-companies,_i yOP-ԍComments of the Rural Telecommun. Group at 13._ providers of wireless communications service,@ti {O-ԍId. at 2.@ satellite master antenna TV  X-companies,\i {O[-ԍSee generally Comments of Optel, Inc.\ and high-altitude, long-endurance platform (HALE) companies such as Sky  X-Station.V^i {O-ԍSee Airships to Offer Cheap Broadband Access, Exchange, June 6, 1997, available at 1997 WL  {O-8930053; FCC Grants Licenses for 73 New Kaband Satellites, Mobile Satellite News, May 15, 1997,  {Oj-available at 1997 WL 8299075.V  X_- <61.` ` The following Chart shows current basic capabilities, typical providers, and economics of some of these technologies (and, for comparison purposes, of current narrowband technologies). " !0*%%ZZ~ "Ԍ X-M1 CHART 2 l  X-  TECHNOLOGY DEPLOYMENT TO RESIDENTIAL CONSUMERS lU  ^ ddx !ddx"F*P ^  @  f   aE5#G\  P6G;YP#Technology (1)#X\  P6G;IP#Y  aE5#G\  P6G;YP#Service Providers (10)#X\  P6G;IP#Y  aE5#G\  P6G;YP#Typical Marketed Downstream Residential Speeds  aE'(11)#X\  P6G;IP#f  aE5#G\  P6G;YP#Current Availability  aE(12)#X\  P6G;IP#f  aE5#G\  P6G;YP#Cost to Provider (13)#X\  P6G;IP#@   f   aEU#G\  P6G;YP#Traditional Analog Phone Wire (2)  ILECs, IXCs, ISPs, CLECs  56 Kbps  Nationwide   aEUN/A#X\  P6G;IP# .  ,   aE) #G\  P6G;YP#ISDN (2)#G\  P6G;YP# , ILECs, Utilities , 128 Kbps , Most major cities , N/A. z   ,v  Satellite Current (3)  Satellite Operators (DirecPC)  400 Kbps I v Nationwide I v $400$500 (per subscriber) z    v  ADSL (4) w, ILECs, IXCs, CLECs, Utilities 1.5 Mbps Some major cities, suburbs and rural areas $600$800 (per subscriber) . I  ,  ADSLlite (5) K, ILECs, IXCsK, 1 MbpsK, In trialsK, $400$600 (per subscriber).   ,  Cable Modems (6) y, MSOs, CLECs, Utilities 3 Mbps Some major cities, suburbs and rural areas $800$1000 (per subscriber) z K v  Terrestrial Wireless LMDS 24/38 GHz (7)v LMDS Companies 24 GHz Providers 38 GHz Providersv 1.5 Mbpsv In over 30 major marketsv $5000$15000 (per building)z z  Terrestrial Wireless MMDS (8)m MMDS Companies m 1 Mbps m Some major cities and suburbs; also in 2way trials v $600 (per subscriber) z    v  Satellite Future (9) Satellite Operators (Geo and NonGeo) 1064 Mbps  Under development  aE#G\  P6G;YP#N/A#X\  P6G;IP#     X-#Xj\  P6G; XP#Sources for data in Chart 2 are in Appendix A.   X- 3.` ` Deployment to "All Americans"  Xl-=62.` ` Thus far, this Report has discussed the deployment of broadband in general terms. In section 706 (a) of the 1996 Act, however, Congress instructed us to "encourage the  X> -deployment on a reasonable and timely basis of [broadband] to all Americans (including, in  X)!-particular, elementary and secondary schools and classrooms) . . .")!i yO#-ԍPub.L. 104-104, Title VII,  706 (a), Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157 (emphasis added). At this early stage, we")!" 0*%%ZZ " cannot draw any definitive conclusions about whether, if present trends continue, broadband services will ultimately be deployed to "all Americans." In this section, we discuss deployment of broadband to particular classes of users that may be served least if deployment does not occur in a reasonable and timely manner.  Xv- ` ` a. Backbone to Rural Areas     XH->63.` ` Some BOCs allege that broadband backbone, whatever its availability in major  X1-metropolitan areas, will not extend into all rural areas under current conditions.1i yO -ԍComments of Bell Atlantic at 16; Comments of U S West Commun., Inc., at 1418. Thus, they argue, rural consumers will be unable to access broadband by a local call, even if they have a broadband facility serving the last mile.  The BOCs' solution to this perceived problem is to  X -allow them to provide broadband service across LATA boundaries.'X Xi yO-ԍLATAs, or Local Access and Transport Areas, are geographic areas across whose borders BOCs are generally prohibited from providing certain inregion telecommunications services until they receive authority pursuant to section 271 of the 1996 Act.'  X -?64.` ` At this time, we do not find that lack of backbone is a pervasive factor in rural areas. Cable television systems are widespread in rural America. According to one study, over ninety per cent of this country's population has access by a local phone call to several  Xy-Internet service providers.^yxi {O-ԍReply Comments of the Commercial Internet Exchange Ass'n at 23 & accompanying footnotes, citing  {Ol-Tom Downes & Shane Greenstein at 4, Universal Access and Local Commercial Internet Markets, at 21 (June 8,  {O6-1998), available at http://skew2.kellog.nwu.edu/~ngreenste/research.html. Another five percent have access by a local call to one.:yi {O-ԍId.: Only  Xb-five percent of Americans now lack access to any Internet service provider by a local call.Cb0 i {OC-ԍId.` ` C This proves that Internet backbone is accessible to ninetyfive percent of Americans as a technical matter. In addition, there should be alternatives to cable and wirelinebased broadband services for these five percent of Americans. Satellitebased multichannel video programming can reach all rural areas in the contiguous United States and is most popular  X-there.uZ i yOb"-ԍAnnual Assessment of the Status of Competition in Markets for the Delivery of Video Programming,  {O*#-Fourth Annual Report, 13 FCC Rcd 1034, 1041 (1998) (directtohome satellitebased multichannel video is most popular in Montana, where it accounts for 23.6% of all multichannel video subscribership). u This may foretell a similarly widespread acceptance of satellitebased broadband access from future satellitebased entrants into the consumer market. "#0*%%ZZ"Ԍ X-ԙ@65.` ` Although some rural areas may lack easy access to broadband backbone  X-facilities,i {Ob-ԍSee Comments of Kathryn Clodfelter, President of the Crawford County Community Network; Comments of Jim Warner. the comments in this proceeding show that, at present, there is no widespread shortage of broadband backbone in rural areas compared to other areas. The Rural Telecommunications Group, for example, specifically denies the existence of any such  X-shortage._"i yOw-ԍComments of the Rural Telecommun. Group at 11._ Further, if the tentative predictions we make elsewhere in this Report about the prospects for competition and significant demand in the consumer market for broadband are correct, we expect there to be sizeable investment in broadband backbone in rural areas.  X1- T` ` b. The Last Mile to Rural and LowIncome Consumers  X -A66.` ` Some commenters raise the possibility of slow deployment of facilities serving  X -the last mile to rural customers.oZ i {OO-ԍSee, e.g., Comments of the Campaign for Telecommun. Access at 9; Comments of the Rural Policy Research Inst. at 12; Comments of SBC Telecommun., Inc., at 7. According to these commenters, the low population density in rural areas may create a relatively unattractive cost/revenue ratio for broadband providers.o They contend that in some rural areas the prices that rural customers would be willing to pay might not induce any company to build broadband  X -facilities, especially to residential consumers outside of small towns." i yOC-ԍAccording to these commenters, the low population density in rural areas may create a relatively  {O -unattractive cost/revenue ratio for the provision of broadband services. See, e.g., Comments of the Campaign for Telecommun. Access at 9; Comments of the Rural Policy Research Inst. at 12; Comments of SBC Telecommun., Inc., at 7. Commenters also express concern for consumers who will not be able to afford broadband service in the home and for entire Tcommunities where, due to conditions of poverty, there may not be enough  Xy-demand to attract deployment.y i yO-ԍComments of the District of Columbia Public Service Comm'n at 45; Comments of Information Renaissance at 56; Comments of Phones for All, Inc.; Comments of SBC Commun. Inc., at 7. Other commenters focus on consumers who can benefit more than most from broadband and urge special measures to ensure that they can afford it. These consumers include persons with disabilities, schools and classrooms, libraries, rural  X4-health care providers. 4i yO!-ԍFor example, twoway video, invented for business conferences, can allow the people with hearing disabilities to use sign language or speech reading and thus carry on conversations with the advantage of facial expressions and other nuances. Textbased Internet, if converted into braille, can enable people with visual disabilities to read and research at their computers. Reply Comments of the Consumer Action Network at 2:"S$0*%%$" Reply Comments of the Council of Organizations Representatives on National Issues Concerning People Who Are Deaf or Hard of Hearing at 3. Commenters assert that broadband can greatly increase opportunities"4$ 0*%%ZZ*" for education, jobs, social and recreational life, and health care for these customers.  X-B67.` ` Some commenters urge relaxation of section 271's prohibition on the BOCs'  X-provision of certain inregion interLATA services.v i {O-ԍSee, e.g., Comments of Campaign for Telecommun. Access at 811.v Others propose Commissionmandated  X-schedules for the construction of broadband networks,i {O -ԍSee, e.g., Comments of New Networks Inst. at 1517 ("The Commission has the authority to simply issue an order directing the ILECs to make xDSLequipped loops available to end users" "and subject them to  {O -penalties if they fail to comply"); Reply Comments of Center for Media Education et al. at 5 (suggesting that the Commission list rural and poor urban communities and "develop incentives to encourage deployment to these areas"), Reply Comments of Qwest Commun. Corp. at 9 (advocating specific deployment schedules for incumbent LECs, especially RBOCs). expansion of the Commission's  X-present universal service programs,. i yOl-ԍComments of Information Renaissance at 17; Opening Comments of Universal Service Alliance at 1314; Reply Comments of the Education & Library Networks Coalition at 3 or more marketoriented solutions to the potential lack  Xv-of broadband facilities to particular classes of customers.Iv i {O-ԍSee infra  78.I  XH-C68.` ` Other commenters, while not denying the special circumstances and/or needs of these consumers, contend that the marketplace will meet the demand. Indeed, some commenters believe that the importance of communications to rural communities' health care, education, economic life, and recreation, as well as the local and civicminded ownership of  X -many rural carriers, will lead to more broadband in rural communities than elsewhere. i {O-ԍComments of Moultrie Ind. Tel. Co. at 6; Comments of the Rural Telecommun. Group at 28. The comments also state that some incumbent LECs, cable operators, and other carriers have begun providing broadband services to schools, libraries, and residential consumers in some  X -rural areas i {O-ԍSee Comments of OPASTCO at 3; Comments of the Rural Telecommun. Group at iii, 6. See also Reply Comments of TeleCommun., Inc., at 10. and that three quarters of the members of the National Telephone Cooperative  X-Association either have deployed xDSL technology to some extent or are planning to do so.bi yOE"-ԍComments of the National Tel. Coop. Ass'n at 23.b  Xb-D69.` ` At this stage in the deployment of advanced services to rural communities, our data is anecdotal and we can in no way conclude that all Americans have, or are about to"K%0*%%ZZ" have, access to these services. At the same time, however, it appears to us that companies are building or providing these services in many rural areas and that the rural character of these areas will not present an intractable barrier to deployment. For example, Valley Telephone Cooperative in south Texas, with a line density of less than one subscriber per square mile, as  X-well as other rural carriers, have deployed DSL or are testing it.Zi yO-ԍComments of Kiesling Consulting LLC at 6.Z Incumbent and competitive LECs and Internet service providers are testing ADSL in places such as Harrison, Arkansas (population 9,922), Sergeants Bluff, Iowa (population 2,772), Winthrop, Maine  X_-(population 5,968), and Kamas, Utah (population 1,061).k_Xi yOh -ԍComments of Transwire Commun., Inc., Exhibit B at 1, 56. k  X1-E70.` ` In addition, incumbent and competitive LECs are not the only possible providers of broadband in rural areas. The cable television operator MediaOne states that it is now offering broadband to "a diverse base of residential customers, including customers in . .  X -. rural areas," including twentyone small communities in New Hampshire.Z i yO-ԍComments of MediaOne Group, Inc. at 3, 8.Z We know of other deployments of broadband by cable television companies in parts of rural South Dakota  X -and Kansaso xi yO-ԍComments of National Cable Television Ass'n at 8 & Appendix 1.o and in such small towns as Connelsville, Pennsylvania (population 9,229), Bedford, Virginia (population 6,073), Michigan's sparsely populated Upper Peninsula,  X-Marshall, Minnesota (population 12,023), and Payette, Idaho (population 5,592),i yOI-ԍComments of AT&T Corp. at 11 & Exhibit B ("NonILEC Deployment of Broadband Services and ILEC Responses"); Comments of National Cable Television Ass'n, Appendix 1 at 2. and  Xy-Durant, Oklahoma (population 12,823).y` i {O-ԍComments of BellSouth Corp., Exhibit D (Cable Datacom News, Commercial Cable Modem Launches  {OT-in North America at 24, http://www.CableDatacomNews.com/cmic7.htm, visited Aug. 26, 1998).   XK-F71.` ` Rural electric companies and cooperatives, who are among the utilities we refer to in paragraphs 40 and 55 above, are other possible providers in rural areas. In addition, fixed wireless providers such as Winstar and Teligent are also possible providers of broadband  X-in rural areas, as are users of unlicensed spectrum. i {Os!-ԍSee, e.g., the web page of Adaptive Broadband,  {O="-http://www.adaptivebroadband.com/products/products.htm, visited Jan. 25, 1999.  X-G72.` ` We lack information on the deployment and availability of advanced telecommunications capability in disadvantaged urban neighborhoods. Therefore, we are"&0*%%ZZ" unable to determine whether broadband is being deployed to those areas in a reasonable and timely fashion. There are, however, a number of ways that broadband can be brought into disadvantaged urban communities. It may appear initially in convenience stores, cafes and other public accommodations (as did telephones and television), and schools and libraries. Schools, libraries, health care facilities, businesses, and academic and military concentrations  X-can serve as anchor customers,7Zi {O-ԍComments of the Rural Policy Research Inst. at 5. Cf. Reply Comments of the Education & Library Networks Coalition at 4 n.3 ("expanding infrastructure to meet the needs of rural health care providers may often benefit neighboring schools and libraries.").7 from which additional deployment can be made at relatively low cost. Local government authorities can encourage further deployment of highcapacity  X_-facilities by cable companies through the cable television franchising process.e_i {O -ԍSee Comments of Information Renaissance at 14.e Incumbent  XH-LECs are also committing to deploy broadband in areas of special need.H|i yOu-ԍComments of the District of Columbia Public Service Comm'n at 1011; Comments of State of New York Dep't of Public Service at 23; Opening Comments of Universal Service Alliance at 7. For example, SBC committed to deploy broadband services in more than 200 communities in California, including such traditionally underserved communities as East Palo Alto, South Central Los  X -Angeles, Watts, Hunters Point, Oakland, Compton, and San Francisco's Mission District.e i yO-ԍOpening Comments of Universal Service Alliance at 8.e A  X -similar program was adopted by Bell Atlantic for New York State.C d i {O-ԍId. at 10. C  X -H73.` ` At this time, we do not broaden our universal service programs. In our  X -Universal Service Order, we adopted the recommendation of the Joint Board to support Internet access via facilities with greater than voice grade quality only for schools, libraries,  X{-and rural health care providers.`\{ i {O"-ԍSee, e.g., FederalState Joint Board on Universal Service, Report & Order, 12 FCC Rcd 8776, 882223,  {O-900607 (1997), appeal pending sub nom. Texas Office of Public Util. Counsel v. FCC, 5th Cir. No. 97-60421 (and consolidated cases) (Universal Service Order).` Given the apparent potential deployment of broadband in rural and lowincome areas, we do not reexamine that decision here.  X6-I74.` ` Moreover, we need to be particularly careful about any action we take to promote broadband deployment, given the nascent nature of the residential market for broadband. At this time, the dimensions of broadband and the upper limits of marketbased"'0*%%ZZ "  X-supply and demand are unclear.;|i yOy-ԍComments of TDS Telecommun. Corp. at 2 (counseling against "regulating ahead of the market curve"  {OA-"before the marketplace defines itself and its limit"). See also Comments of the Technology Entrepreneurs  {O -Coalition at 3, quoting W.W. Barley III (Ed.), Collected Works of F.A. Hayek, F.A. Hayek, The Fatal  yO-Conceit: The Errors of Socialism at 85 (U. of Chicago Press 1988) (". . . what cannot be known, cannot be planned."); Reply Comments of National Rural Telecom, Ass'n at 8 ("it is too early for government intervention that secondguesses the marketplace before marketplace forces have developed sufficiently to evaluate where marketdriven deployment is likely to lag or languish.").; Moreover, some actions could contravene the intent of  X-section 706 that our broadband policy be technologyneutral i yO -ԍSection 706 (c) defines "advanced telecommunications capability," which we refer to as broadband, "without regard to any transmission media or technology." and could skew a potentially  X-competitive marketplace.~d i yO -ԍComments of Comcast Corp. at 1112 & n.16; Comments of Sprint Corp. at 1011.~ Nevertheless, we will continue to closely monitor the rollout of advanced services in rural and lowincome areas, including in subsequent reports. We are committed to ensuring the reasonable and timely deployment of advanced telecommunications capability to all Americans, including those in rural and lowincome areas. In addition, we  Xv-may examine calls for expansion of our present programs in future proceedings. =Zv i yO-ԍFor example, on or before January 1, 2001, the Commission will convene a FederalState Joint Board to  {O-review the current definition of universal service.  Universal Service Order, supra note 177, 12 FCC Rcd at 8790, 8807, 883435.=  XH-J75.` ` We also recognize the enormous potential of broadband services to enhance educational and employment opportunities for people with disabilities. Advanced telecommunications capability can dramatically increase communications access and quality of life for this population. People with disabilities are included within section 706's mandate that broadband be deployed to "all Americans." In addition to increasing telecommuting opportunities, and therefore employment opportunities, advanced video and data technologies can allow people with disabilities to obtain information in accessible formats and communicate with others through telecommunications networks in accessible mediums. In essence, advanced telecommunications capabilities can, in some instances, allow people with disabilities to transcend physical barriers posed by traditional telecommunications services. ` `   XK-K76.` ` We caution, however, that the promise of advanced telecommunications capability for people with disabilities will not be realized unless inherent barriers in telecommunications products and services are removed, and accessible equipment and services are widely available through mainstream markets. There exists a genuine danger that people with disabilities will be left out of the telecommunications revolution if telecommunications equipment and services are not designed to be accessible to the broadest possible range of"(0*%%ZZ"  X-users. Congress recognized this principle through its enactment of section 255 of the Act.Qi {Oy-ԍ47 U.S.C.  255 et seq.Q Section 255 specifically provides, among other things, that manufacturers of telecommunications equipment and customer premises equipment, and providers of telecommunications services shall ensure that their equipment and services are accessible to  X-and usable by individuals with disabilities, if readily achievable.MZi yO-ԍ47 U.S.C.  255 (b), (c).M  Xv-L77.` ` The Commission has not completed its final rules for section 255 at this time. We remind telecommunications service providers and equipment manufacturers, however, that  XH-the provisions of section 255 are currently enforceable.&Hi {O -ԍSee generally Implementation of Section 255 of the Telecommunications Act of 1996, Access to Telecommunications Services, Telecommunications Equipment, and Customer Premises  {Ou-Equipment by Persons with Disabilities, Notice of Proposed Rulemaking, WT Docket No. 96-198, FCC 9855,  {O?-released April 20, 1998, available at 1998 WL 185139. Finally, while we do not propose to change any of our present programs in this proceeding, we are committed to taking advantage of any opportunities to encourage the deployment of advanced telecommunications service to people with disabilities. Plans for the deployment of advanced services should also address the needs of persons with disabilities. We encourage the disability community to continue to provide information to the Commission on any barriers to advanced telecommunications capability that may arise as such advanced services are deployed.  X-M78.` ` Finally, we find merit in the "demand pull" concept, which holds that consultations between actual and potential suppliers of broadband and community leaders in traditionally underserved areas can lead suppliers to more rapid deployment of broadband  XK-capability.Ki {O-ԍComments of the Alliance for Public Technology at 68.  See also Comments of Information  {O-Renaissance at 15. Ľ For example, the Center for Media Education asserts that the cable television operators were initially reluctant to wire low income areas for video service. They preferred to wire affluent areas, which they thought would be more profitable. Once they did wire low  X-income areas, however, they discovered that such areas were among their most profitable.v4 i {O-ԍReply Comments of Center for Media Education et al. at 4 & n.7.v The Alliance for Public Technology suggests that community leaders that know the needs of their communities in such areas may be able to coalesce enough demand to pull in profit") 0*%%ZZ"ԫ X-oriented suppliers.$i {Oy-ԍAPT's idea is supported by several others.  See Comments of GTE at 12 n.33; Comments of Information Renaissance at 1315; Comments of Alpha Telecommun. & Technologies; letter from the Summit  {O -Health Institute for Research and Education, Inc. (undated). Cf. Reply Comments of the American Public Power Ass'n at 1920. We believe that private efforts to stimulate demand pull may speed the deployment of broadband in traditionally underserved areas.  X-N79.` ` We emphasize that these suppliers are not only the incumbent LECs and cable television companies. They also include new and potential providers of broadband. The latter companies, because they lack a mature business, an existing customer base, and sunk investment in narrowband technologies, may find serving small groups of customers, or  X_-customers with unique needs, relatively attractive.TZ_i yO -ԍFor an example of a traditionally underserved area that, by going to a new entrant, received far more  {O -(for less money) than an established carrier would give it, see Doug Fine, Eskimos Warm to Digital Age, Wash.  yOV-Post at C1 (Aug. 9, 1998).T  X1-O80.` ` We repeat that we are finding only that the record evidence is insufficient for us to conclude that broadband is not being deployed to "all Americans" in a reasonable and timely fashion by private activities and our current programs. If, however, in the future, we find that broadband is not being deployed in a reasonable and timely fashion in specific areas or to particular groups of customers, we will not hesitate to act.  X-` ` c. Elementary and Secondary Schools and Classrooms  Xb-P81.` ` Section 706(b) of the 1996 Act specifically directs the Commission to assess the availability of advanced telecommunications to elementary and secondary schools and  X4-classrooms.N4i {O-ԍSee supra note 3.N In addition to recognizing the importance of providing schools with access to advanced services in section 706, Congress recognized the need for such access in section 254 of the Act, which for the first time provides universal service support for advanced services to  X-schools and classrooms.Dh i yO -ԍ47 U.S.C.  254.D We note that section 254 of the Act expressly provides for universal service support for advanced services to schools, libraries, and rural health care  X-providers.M i yOj#-ԍ47 U.S.C.  254(h)(2)(A).M Although section 706 concerns the availability to advanced telecommunications capability to all Americans, including all of the entities listed in section 254, we limit our"* 0*%%ZZp" discussion in this section to elementary and secondary schools and classrooms, because section 706 expressly mentions these institutions.  X-Q82.` ` In the Act, Congress directed the Commission and states to take the steps necessary to establish support mechanisms to ensure the delivery of affordable  X-telecommunications service to all Americans, including schools and classrooms.Oi yO-ԍ47 U.S.C.  254 (h)(1)(2).O Congress further directed the Commission to define additional services for support for eligible schools and classrooms and directed the Commission to "establish competitively neutral rules . . . to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for all public and non-profit elementary and  X -secondary school classrooms . . . ."N Xi yO# -ԍ47 U.S.C.  254 (h)(2)(A).N On May 8, 1997, the Commission released the  X -Universal Service Order, implementing section 254 of the Act, and establishing a universal  X -service support system that became effective on January 1, 1998.m i {O-ԍUniversal Service Order, 12 FCC Rcd at 900292. m  X -R83.` ` In the Universal Service Order, the Commission, among other things,  X -established the federal universal service support mechanism for schools and classrooms.@ zi {O-ԍId.@ Consistent with the recommendations of the FederalState Joint Board on Universal Service, the Commission concluded that all telecommunications services, Internet access, and internal connections would be provided at discounts ranging from 20 percent to 90 percent to eligible  XO-schools and classrooms.CO i {O -ԍId. at 9002.C The schools and classrooms support mechanism grants schools and classrooms maximum flexibility to purchase the package of services they believe will most effectively meet their communications needs, subject to the requirement that competitive bids  X -are sought for all services eligible for discounts under section 254.} i {OY-ԍUniversal Service Order, 12 FCC Rcd at 9007; 47 C.F.R.  54.504(a).} The discount rate provided to a particular school or classroom varies based on the percentage of students eligible for participation in the national school lunch program and the classification of the  X-school or classroom as rural or urban.h0 i {O"-ԍUniversal Service Order, 12 FCC Rcd at 90359050.h When demand exceeds available funding and a filing window is in effect, funding priority is first given to requests for telecommunications services and Internet access that are received within an established filing window, and then to requests"+ 0*%%ZZ" received within a filing window for internal connections beginning at the 90% discount  X-level.v^i {Ob-ԍFederalState Joint Board on Universal Service, Fifth Order on Reconsideration & Fourth Report &  {O,-Order, 13 FCC Rcd 14915, 1493638 (1998). Funding for internal connections below the 90% discount level is  {O-provided based on funding availability. Id. at 14938. v  X-S84.` ` The Commission is confident that, consistent with the goals set forth in section 706 of the Act, the support mechanisms for schools and classrooms will help provide support for the deployment of advanced services to schools and classrooms. Applications were received for support from the support mechanism for schools and classrooms during the filing  X_-window for the 19981999 funding year_i {O -ԍ The first filing window opened on January 30, 1998 and closed on April 15, 1998. Fifth Order on  {O -Reconsideration, 13 FCC Rcd at 14920. In the Fifth Order on Reconsideration, the Commission changed the funding year for the universal service support mechanism for schools and classrooms from a calendar year cycle  {OZ-(January 1 December 31) to a fiscal year cycle (July 1 June 30). Id. at para. 8. Because the Commission implemented the funding year change immediately, the applications submitted during the first filing window are  {O-being funded through June 30, 1999, within the applicable funding limitations. Id. The window for filing applications for 19992000 opened on December 1, 1998 and will close on March 11, 1999. The Commission received approximately 30,000 applications for support, although these applications included requests from both schools and libraries. and on November 21, 1998, the Administrator  XH-began notifying schools and classrooms of the results of their requests for discounts.FH i yO-ԍThe Administrator has been notifying applicants in waves and will continue to do so until all applicants have been notified. We note that, in an Order released on November 20, 1998, the Commission directed the Schools and Libraries Corporation and the Rural Health Care Corporation to merge into the Universal Service Administrative Company as the single entity responsible for administering all four universal service support mechanisms. Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Federal {O-State Joint Board on Universal Service, Third Report & Order in CC Docket No. 9721, Fourth Order on  {Oq-Reconsideration in CC Docket No. 9721 & Eighth Order on Reconsideration in CC Docket No. 9645, FCC 98 {O;-306, released Nov. 20, 1998, available at 1998 WL 804687.  Although the Education and Library Networks Coalition argues that the universal service  X -support mechanisms are not sufficient to implement section 706,q i yO-ԍ Reply Comments of Education & Library Networks Coalition at 3.q we believe that it would be premature at this time to adopt additional measures for deploying advanced services to schools  X -and classrooms. di yO!-ԍNo commenter furnished objective data about how many schools and classrooms do, and do not, have access to advanced capabilities. We expect that, as implementation of the universal service support mechanisms continues, deployment of advanced telecommunications capabilities to schools  X -and classrooms will become widespread. Finally, we note that in the Universal Service  X -Order, as recommended by the Joint Board, the Commission committed to reviewing the" ,0*%%ZZ "  X-definition of universal service on or before January 1, 2001.yi {Oy-ԍUniversal Service Order, supra note 177, 12 FCC Rcd at 8790.y We believe it would be appropriate at that time to assess whether the implementation of the universal service support mechanisms has resulted in the deployment of advanced services to schools and classrooms.  X- _C.The Demand for Broadband Capability  X_-T85.` ` We next examine the demand for broadband capability. In order to determine whether broadband capability is being deployed in a reasonable and timely fashion, we must consider whether the consumers' demand for broadband is being met. The speed of future investment and the success of that investment will depend, in part, on consumer demand for _highspeed services.  X -U86.` ` At present, the demand for highspeed Internet access is the primary driver of consumers' desire for broadband. One statistical trend that indicates the vast potential of the Internetviasatellite market comes from Frost & Sullivan. It estimates the market for Internet-specific satellite earth stations will increase from approximately $101 million in 1998  Xy-to $1.78 billion by year-end 2002.yZi {O-ԍXClayton Kunz, Broadband Satellite Systems: The Rubber Hits the Road, Feb. 1998,(# http://www.frost.com/verity/newsletter/telecom/98-02/art05.htm We expect that the demand for this application of broadband will continue to grow rapidly in future years. In 1998, there were personal  XK-computers (PCs) in almost half of American households\Ki {O-ԍRobert Lemos, ZDNet, PCs in Half of U.S. Homes -- Almost,  {Oz-http://www.zdnet.com/zdnn/stories/news/0,4586,2169244,00.html, visited Dec. 30, 1998. See also Comments of United Homeowners Ass'n at 14. and there were approximately 30  X4-million home subscribers to narrowband Internet services.*4i {O-ԍChris O'Malley, No Waiting on the Web, Time Magazine at 76 (Nov. 16, 1998) (27 million); Reply Comments of Comcast Corp. at 21 (35 million). Even if these figures are not precisely comparable because of homes and individuals with several different Internet accounts, they still show a large potential residential market for broadband. That there are approximately 30 million home Internet subscribers is a superlative record for a service that consumers had barely heard of five years ago. * Experts project continued growth in the home PC and Internet markets, elements of which are variously described as  X-"increasing," "rapid[]," "staggering," and "exploding."h i yOA"-ԍComments of the Progress & Freedom Foundation at 1116.h Prices of homeoriented PCs are  X-below $1,000 and highspeed cable modem prices are below $350.Si yO$-ԍComments of BellSouth Corp. at 19.S Many predict that these"-0*%%ZZ" prices will continue to fall significantly, with one commenter predicting that broadband cable  X-modem prices will be below $150 by the end of 1999.i {Ob-ԍComments of BellSouth Corp., Exhibit A, citing The Forrester Report, Broadband Hits Home at 2,  {O,-http://www.forrester.com/cgibin/cgi.pl, visited Sept. 14, 1998. These conditions indicate that there is a large pool of potential residential consumers of broadband and that the pool is likely to  X-grow in coming years.$i yO-ԍIndeed, if WebTV is capable of supporting broadband speeds, then the 98% of American homes that have television sets need not purchase a PC to receive broadband.  X-V87.` ` As for the retail price of broadband, some offerings are already priced below $50 a month. The following Chart shows the present speeds and prices of several broadband (and, for comparison, current narrowband) technologies. It assumes that the customer already has purchased a PC."H.|0*%%ZZD"Ԍ X-M1bř CHART 3 l  X-  TECHNOLOGY COSTS TO RESIDENTIAL CONSUMERS #X\  P6G;IP# lU  yO-  r !ddx"F*P AddxK/<Fb r "   @ " &u&   aEX` hp x (#%'0*,.8135@8:@CCGHJLNPQSVXXZD75.0     &&  Terrestrial Wireless LMDS 24/38 GHz (7) $200 $1000 $50 $0 (included in access fee) $1700 30.0  z  &v&  Terrestrial Wireless MMDS (8)wv $100wv $400wv $50$70wv $0 (included in access fee)wv $1220wv 16.7z G   &v:&  &"'x)+(.1205i898<>@CCGHJLNPQSVXXZ:B z T2\d!#&l(+Z+t/1$4|68,;=?4BDSatellite Future (9){ N/A{ $500$1000{ N/A{ N/A{ N/A{  aE#G\  P6G;YP##G\  P6G;YP#N/A#Xj\  P6G; XP# G   w: X-:B z T2\d!#&l(+Z+t/1$4|68,;=?4BX` "%h'),p.0 3x57(:<>0ACE8HJL@OQD #Xj\  P6G; XP#  X- Sources for data in Chart 3 are in Appendix A. X` "%h'),p.0 3x57(:<>0ACE8HJL@OQKS  [ ck!s#%#({*,+/13368:;=?  Xy-bW88.` ` There appears to be a significant initial demand for broadband in the consumer  Xb-market at least 375,000 paying customers.b0 {O-ԍSee infra  54, 58. There is disagreement about the priceelasticity of demand, which is the measurement of consumer responsiveness to price changes, such as the extent to which a higher price will result  {Om!-in fewer sales. Compare Comments of the Progress & Freedom Foundation at 1617 (demand is priceelastic)  {O7"-with Dan Allen, Sr., & Earl Craighill, Demand for High Bandwidth Access at A32 (Feb. 1998) (demand may be  {O#-priceinelastic), Appendix A to USTA Presentation, supra note 36. In addition, the first survey of which we are aware shows that customers are highly satisfied with the most popular form of residential"K/0*%%ZZK"  X-broadband service on offer today, cable modem broadband service.N^0 {Oy-ԍ Anne M. Hoag, Ph.D., Cable Modem Market Study: Adoption Patterns & Impact on Internet Usage:  {OC-Summary of Findings at B34 (Feb. 1998) (demand may be priceinelastic), Appendix A to USTA Presentation,  {O -supra note 36.N  X-X89.` ` Concerning specific services and applications, we expect consumers to demand more than highspeed Internet access. This may include highspeed, highquality access to  X-video conferencing, 0 yOC -ԍComments of the Progress & Freedom Foundation at 19 (among business customers, video conferencing is growing 100% per year). electronic commerce,^F0 {O -ԍSee United States Government Electronic Commerce Policy, available at http://www.ecommerce.gov/,  {Oe -visited Dec. 29, 1998; Remarks by the President and the Vice President at Electronic Commerce Event, Nov. 30,  {O/ -1998, available at http://www.whitehouse.gov/WH/New/html/19981130-19675.html, visited Dec. 2, 1998. which boomed unexpectedly over the recent  X-holidays,^l 0 {O-ԍLeslie Walker, Online Shoppers Triple Holiday Spending, Washington Post, Jan. 4, 1999 at A4; Bob  {Ot-Tedeschi, Reports Indicate Online Holiday Sales Exceeded Expectations, CyberTimes,  {O>-www.nytimes.com/library/tech/99/01/cyber/articles/05aol.html, visited Jan. 6, 1999. local area networks,h 0 yO-ԍComments of Retail Internet Service Providers at 7 n.8.h hundreds of radio and television channels and individually  Xv-requested books, movies, and musical recordings.v"0 {OI-ԍReply Comments of Broadcast.com at 2. See also Fifth Cable Competition Report, supra note 54, at  10205. Consumers may also demand broadband  X_-not only for more and faster forms of today's products (e.g., movies), but also for new products that are especially tailored to the Internet and/or broadband. These products may include "magazines" that are individually customized to fit the consumer's preferences, and  X -interactive single or multiplayer games including those on popular television shows. |0 {OI-ԍKaren Kaplan, The Cutting Edge YearEnd Technology Special: Buzzword for the New Year Is  {O-Bandwidth, L.A. Times at C1, Dec. 28, 1998, available at 1998 WL 18907754.  X -Y90.` ` We therefore expect that the demand for residential broadband is going to grow  X -in coming years, in all likelihood making it a mass consumer product eventually.p 0 {O` -ԍSee, e.g., Comments of Cincinnati Bell Tel. Co. at 1112.p It is not clear, however, how quickly residential broadband will reach the point in the "S Curve" when supply and demand rise sharply that is, when it begins moving from being a niche product" 0j0*%%ZZ "  X-to being a mass market one.I0 {Oy-ԍSee supra note 44.I Some of the products for which S Curves have been observed developed in largely unregulated markets, which may have speeded their deployment.  X- D.Conclusion  Xv-Z91.` ` In this section, we apply the measurements discussed in paragraphs 2025 and 3132 above, to the actual deployment of broadband to residential customers to date. At such an early stage of deployment to residential customers, it is difficult to reach any firm judgment. Nevertheless, based on the objective comparison we spelled out in paragraphs 3132 above, which compares the penetration of other nascent consumer products, the deployment of advanced telecommunications capability to all Americans appears, at present,  X -to be proceeding on a reasonable and timely schedule.} Z0 {O-ԍMany parties concur with this conclusion, though by different analytical paths.  See Comments of Comcast Corp. at 12; Comments of Kielsling Consulting LLC at 2; Comments of MediaOne Group, Inc., at 12.  {O-Cf. Comments of the Commercial Internet Exchange Ass'n at 9. Cf. Comments of State of New York Department of Public Service at 2 ("Recent reviews . . . reveal no discernible evidence of significant unmet demand for advanced telecommunications capability."); Comments of Telecommun. Resellers Ass'n at iii; Reply Comments of Comcast Corp. at 6.} Based on the record submitted in this proceeding, it appears that the following numbers of residential customers, at a minimum, are now subscribing to broadband: 350,000 from cable television companies and 25,000 from  X -ADSL. This amounts to 375,000 customers,$ 0 {O.-ԍSee also Kathleen M.H. Wallman, Higher Ground: Reconceptualizing the Debate Over Deploying  {O-Advanced Telecommunications Capability Under Section 706 of the Telecommunications Act of 1996 at 5 (Dec. 1998) (implying that there are fewer than 500,000 residential subscribers to ADSL and cablebased broadband service). or a residential penetration of approximately  X-.4%. 0 yO-ԍIndustry Analysis Division, Common Carrier Bureau, Trends in Telephone Service, Table 16.1 at 85 (July 1998). The 375,000 figure is understated because it attributes no customers to utility, wireless cable, and competitive LEC offerings and because it is several months old in a  Xb-business that is gaining new subscribers rapidly.b0 {O- -ԍSee Catherine Yang, Filling the Need for Speed, Business Week at 50, 51, Dec. 28, 1998 (@Home is growing 4050% per quarter and RoadRunner adds 4,000 subscribers a week). Two estimates made at the end of  {O!-1998 are that there were 500,00 residential subscribers to some form of "highspeed" Internet service. See  {O"-Spencer E. Ante, A Broad Band of Unrealistic Expectations,  {OS#-http://fnews.yahoo.com/street/99/01/21/valley_990121.html, visited Jan. 25, 1999; Stephen Buel, Bandwidth:  {O$-Spread of High-Speed Access Expected To Transform Internet Usage, San Jose Mercury News, Jan. 20, 1999,  {O$-available at 1999 WL 8293884 and http://www.mercurycenter.com/business/center1/hispeed012099.htm."b1f0*%%ZZJ"Ԍ X-ԙ[92.` ` 375,000 residential customers, or .4% residential penetration, at the end of the second calendar year of deployment is far more than the number of customers for the telephone, color television, and cellular service at the same stage in their deployment, and approximately the same penetration percentage as that of blackandwhite television. Even if the customer numbers stated in paragraph 32 above were adjusted upwards to account for the smaller population of the United States in past decades, there would still be fewer than 375,000 residential customers for the similar technologies, except for blackandwhite television. We are further encouraged by the fact that companies in virtually all segments of the communications industry are making sizeable investments in broadband technologies. We expect that these investments will lead to more competition in, and greater deployment of, broadband generally, and in particular, to classes of users, including people in rural areas, lowincome people, schools, and classrooms.  X -\93.` ` The above, however, is a static snapshot taken at the present moment. Ensuring that deployment is reasonable and timely as the market develops continues to be one of our top priorities. We will, for example, examine barriers to entry to determine whether such barriers inhibit firms' ability to meet customer demand. Where immediate action is warranted, we are taking steps, which we discuss in the next Sections, to ensure that the deployment of broadband is reasonable and timely. We will also continue to monitor closely  XK-the deployment of broadband to all Americans, most specifically in future reports of this type.  X-]94.` ` Under most scenarios, competition among several facilitiesbased providers of residential broadband will occur. We therefore expect facilitiesbased competition in much of the United States, even in the short term. We also emphasize the importance of resale, major entry into broadband by companies that do not currently offer communications services, such  X-as utilities, and new technologies such as next generation Kaband satellite systems.l0 {O:-ԍSee supra  39 & infra Appendix A at  9.l  X-^95.` ` We think of broadband facilities as an input product, like microprocessors or memory in the computer world. For such products, a so called "virtuous cycle" can develop. Successive generations of input products provide more performance for the same amount of money. The greater performance enables current applications to perform better and fuels more demand for them, and demand for new applications that were not feasible before. We have seen such a virtuous cycle in bandwidth in the SONET market for optical networking, in the local area network market for desktop data communications, and in the modem market for consumers. Although we conclude that the current deployment of broadband appears reasonable and timely, we anticipate seeing such a virtuous cycle for consumer market bandwidth, especially in facilities serving the last mile. As a result, we expect consumer demand to increase substantially in coming years."!2Z0*%%ZZ "Ԍ X-ԙ_96.` ` The demand pull concept adds consumers as a stimulus to the virtuous cycle. As the cycle gains momentum and cost decreases and performance increases, we expect that companies will provide new applications and services for broadband consumers. As a result, more consumers will demand broadband, and the virtuous cycle will accelerate. In this way, we will reach our ultimate goal that all Americans have meaningful access to advanced telecommunications capability and the benefits of the Information Age.  X_-`97.` ` We expect consumers to demand, and the market to deliver, much more in coming years. We envision successive generations of bandwidth technologies for the last  X1-mile, each a leap forward in speed from the current generation.r10 {O -ԍSee generally Kathleen M.H. Wallman, supra note 223. r  X -a98.` ` Although we conclude that deployment of broadband appears reasonable and timely today, we will continue to monitor deployment of such capability, including through annual reports. We note that the pace of broadband deployment may need to accelerate in  X -coming years to remain reasonable and timely.\ Z0 yO-ԍIf the market for broadband grows as the market for overtheair television did, deployment will need to accelerate very sharply in the next two years. In 1948, the year corresponding to 1998 for broadband, there were only 172,000 television sets. In 1949, however, there were 940,000; and in 1950, there were 3.875 million.  yO!-Bureau of Census, U.S. Department of Commerce, Historical Statistics of the United States, Colonial  yO-Times to 1970, Vol. 2 at 796 (Series R 93105, Households with Television Sets).\ We expect to see deployment of broadband capability continue and accelerate in the near future. Moreover we will not hesitate to promote competition and reduce barriers to infrastructure investment so that all companies have market-based incentives to invest, innovate, and meet the needs of all consumers.  X4-" 1IV. ADDITIONAL ISSUES ĐlU  X-b99.` ` We note that many issues and proposals for action that we raised in the Notice and that parties raised in their filings herein are being addressed in other proceedings, and we urge the parties to participate in those proceedings. Below, we address three issues on which we believe a discussion of our general thinking would be particularly useful: (1) access to broadband systems; (2) access to multiple dwelling units; and (3) Internet peering arrangements. 1 "e3 0*%%ZZ"Ԍ X- A.Access to Broadband Systems  X-  X-c100.` ` In the Notice, we asked generally about the kinds of regulatory structures that would best foster the deployment of broadband and that would best fit the consumer  X-broadband market.e0 {O-ԍNotice, supra note 11, 13 FCC Rcd at 1530811.e Few comments addressed these general questions, but many addressed one specific regulatory issue, whether Internet service providers should be given rights of access to broadband systems operated by cable television companies. Many commenters took  X_-strong positions favoringH_Z0 {Oj -ԍSee Comments of America Online, Inc., at 911; Comments of GTE at 17 n.44; Comments of Virtual Hipster at 3; Comments of the Rural Policy Research Inst. at 4; Reply Comments of America Online, Inc.,  {O -passim; Reply Comments of Broadcast.com at 4; Reply Comments of Center for Media Education et al. at 9; Reply Comments of the Internet Service Providers' Consortium at 5; Reply Comments of Mindspring  {O -Enterprises, Inc., at 1423. The Rural Policy Research Institute advocates unbundling for "all competitors . . .  {OX-where necessary." [Italics in original.] Two parties call for ISPs to have the same rights vis a vis incumbent LECs as competitive LECs. Comments of Verio Inc., at 34; Reply Comments of the Coalition of Utah Ind. Internet Service Providers at 67.  or opposingq_j 0 {Oz-ԍSee Comments of AT&T Corp. at 3842, citing B. Esbin, Internet Over Cable: Defining the Future in  {OD-Terms of the Past, Commission Office of Plans & Policy Working Paper #30 (Aug. 1998); Comments of Comcast Corp. at 2, 8, 1617 & nn.2829; Comments of National Cable Television Ass'n at ii; Comments of the Progress & Freedom Foundation at 89, 27; Reply Comments of AT&T Corp. at 1316; Reply Comments of At Home Corp. at 1415; Reply Comments of Comcast Corp. at 1724 & n.35 at 18; Reply Comments of Cox Commun., Inc., at 57.q the placing of such an obligation on cable television operators.  X -d101.` ` We note, as a preliminary matter, that our duty to encourage broadband  X -deployment of advanced services requires us to look broadly at all methods of providing additional bandwidth to customers, not just those methods provided by cable companies or other particular types of service providers. We observe further that the record, while sparse, suggests that multiple methods of increasing bandwidth are or soon will be made available to a broad range of customers. On this basis, we see no reason to take action on this issue at this time. We will, however, continue to monitor broadband deployment closely to see whether there are developments that could affect our goal of encouraging deployment of broadband capabilities pursuant to the requirements of section 706. "640*%%ZZ"Ԍ X- B.Access to Multiple Dwelling Units  X-e102.` ` Several commenters allege that they have encountered problems in providing broadband to tenants in many apartment and condominium buildings and other multiple dwelling units (collectively, MDUs) because they cannot obtain access on reasonable terms to  X-the "last hundred feet" of facilities to the tenant's unit.c0 yO-ԍThe same considerations apply to office buildings.c In order to provide service to tenants, communications carriers need access to wire within the MDU to carry signals to the  X_-individual premises of each tenant that seeks their service._X0 {Oh -ԍSee Comments of Allegiance Telecom, Inc., at 8; Comments of the Wireless Commun. Ass'n Int'l, Inc.,  {O2 -at 2630; Reply Comments of KMC Telecom, Inc., passim; Reply Comments of RCN Telecom, Inc., at 1421. In addition, wireless carriers, in particular, state that they need access to rooftops for placement of their transmission and reception facilities and to riser conduit for transmission of signals between their rooftop  X -facilities and the building's central service node._ 0 yO-ԍReply Comments of WinStar Commun., Inc., at 4._ Commenters allege that their access to these important service facilities has been unreasonably obstructed both by incumbent  X -providers and by building owners. D0 {O-ԍSee, e.g., Comments of Allegiance Telecom, Inc., at 8; Comments of Optel, Inc., at 46; Reply Comments of KMC Telecom, Inc., at 45.  X -f103.` ` Commenters suggest a variety of Commission actions that could promote the availability of broadband to MDUs. For example, among other things, commenters have suggested that the Commission forbid exclusive access agreements between building owners  Xy-and providers.y0 {O-ԍSee Comments of Allegiance Telecom, Inc., at 89; Comments of Sprint Corp. at 9; Reply Comments of KMC Telecom, Inc., at 10; Reply Comments of WinStar Commun., Inc., at 56. Real estate interests, such as The Building Owners and Managers Association, however, counter that a dynamic market for access to buildings is evolving and  XK-that building owners have good reason to afford their tenants the services they want.K 0 yO-ԍBuilding Owners & Managers Association, Wired for Profit: The Property Management  yO-Professional's Guide to Capturing Opportunities in the Telecommunications Market at 2 (1998) ("Property management professionals must be prepared for access demand to grow as telecommunications choice grows. . . . Either way, those providing choice will need access to your tenants, and your tenants will demand access to them".).  X-g104.` ` As of 1990, MDUs comprised approximately 28% of all housing units"50*%%ZZ)"  X-nationwide, and that percentage is likely growing. 0 {Oy-ԍTelecommunications Services Inside Wiring, Report & Order & Second Further Notice of Proposed  {OC-Rulemaking, 13 FCC Rcd 3659, 3679 (1997) (Inside Wiring Report & Order & Second Further NPRM).  If a significant portion of these units is not accessible to competitive providers of broadband, that fact could seriously detract from local competition in general and the achievement of broadband availability to "all Americans" in particular. We are considering the issue of access to MDUs in several proceedings. For example, WinStar has requested that we apply section 224 of the Communications Act, governing regulation of pole attachments, to require public utilities to make rooftop facilities and related riser conduit owned or controlled by the utility available to competing providers  X_-of communications services.\_$0 yO4 -ԍImplementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC  {O -Docket No. 9698, WinStar Communications, Inc., Petition for Clarification or Reconsideration (filed Sept. 30,  {O -1996). See also Inside Wiring Report & Order & Second Further NPRM, 13 FCC Rcd at 377882. In these proceedings, we can address more fully any questions regarding our statutory or constitutional authority to take any particular action and the need for action. If the answers to such questions show that Commission action is permissible and desirable, we will then consider what actions will ensure that the deployment of broadband to all Americans is reasonable and timely.  X - C.Internet Peering  X-h105.` ` In the Notice, we asked whether the Commission should monitor or exercise authority over peering an arrangement in which two Internet backbone providers exchange traffic that originates from an end user connected to one of the providers and terminates with  XK-an end user connected to the other provider.&KH0 {OD-ԍNotice, 13 FCC Rcd at 15309. In general, peering is settlements-free, i.e., the providers do not charge each other for terminating traffic. Also, one peer will not allow traffic from another peer to transit its network  {O-to a third provider. See WorldCom, Inc. & MCI Communications Corp., CC Docket No. 97-211, Memorandum  {O-Opinion & Order FCC 98225 at  14346, released Sept. 14, 1998, available at 1998 WL 611053. Commenters almost unanimously oppose  X4-Commission involvement at this time in peering and similar relations among Internet firms.X46 0 yO-ԍComments of America Online, Inc., at 1315; Comments of Internet Service Providers' Consortium at 1517; Comments of Northern Telecom, Inc., at 3; Comments of PSINet Inc., at 7; Comments of SBC Commun. Inc., at 12. Only one commenter, Bell Atlantic, suggests possible action, and that is only that we "lower  X-barriers for new entrants, in particular currently precluded entrants."WV 0 yO #-ԍReply Comments of Bell Atlantic at 10.W We agree with SBC that premature regulation "might impose structural impediments to the natural evolution and"60*%%ZZ"  X-growth process which has made the Internet so successful."U0 yOy-ԍComments of SBC Commun. Inc., at 12.U Accordingly, we will continue to refrain from action involving peering. We bear in mind that "[t]he Internet and other interactive computer services have flourished, to the benefit of all Americans, with a minimum of government regulation" and that it is the policy of the United States "to preserve the vibrant and competitive free market that presently exists for the Internet and other  X-interactive computer services, unfettered by Federal or State regulation; . . . ."pX0 yO-ԍ47 U.S.C.  230 (b)(2). See also 47 U.S.C.  230 (a)(4).p  X_-  XH-xHV. FURTHER ACTIONS ĐlU  X -i106.` ` We will act whenever necessary to ensure that deployment of broadband to all Americans proceeds at a reasonable and timely pace. We will also continue to inquire annually into the deployment of broadband. We will issue another report next year and will, if we find that deployment is not reasonable and timely, immediately take the actions required by section 706 remove barriers to infrastructure investment and promote competition in telecommunications markets. HAs we showed when we created our Bandwidth Task Force, we give the promotion of broadband the highest priority and we are coordinating all our broadbandrelated efforts to insure the greatest efficiency and effect. We will complete proceedings that promote the deployment of broadband capability, including proceedings  XK-concerning deployment of wireline broadband services,P^K0 {O-ԍSee Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket  {O-No. 98-147, Memorandum Opinion & Order & Notice of Proposed Rulemaking FCC 98-188, released Aug. 7,  {Ox-1998, available at 1998 WL 458500.P commercial availability of  X4-navigation devices40 {O-ԍSee, e.g., Implementation of Section 304 of the Telecommunications Act of 1996, Commercial  {O-Availability of Navigation Devices, Report & Order, 13 FCC Rcd 14775 (1998). and access to facilities serving the last hundred feet.  X-j107.` ` In addition, we will pursue wireless initiatives to ensure that wireless services, both fixed and mobile, are true competitors in the consumer market for broadband. We will continue to allocate, auction, and license more spectrum for uses that include broadband,  X-especially facilities that serve the last mile and last hundred feet.$j 0 yO!-ԍComments of Northern Telecom, Inc., at i, 1; Comments of the Wireless Information Networks Forum  {O"-at 89.  See, e.g., Amendment of the Commission's Rules with Regard to the 36503700 MHz Government  {On#-Transfer Band, ET Docket No. 98237, Notice of Proposed Rulemaking & Order FCC 98337 at  1, 6, released Dec. 18, 1998. We will also move"7V 0*%%ZZq" forward to implement the next generation of mobile services and the reexamination of our 45  X-MHz CMRS spectrum cap.0 {Ob-ԍSee 1998 Biennial Regulatory Review Spectrum Aggregation Limits for Wireless Telecommunications  {O,-Carriers, WT Docket 98205, Notice of Proposed Rulemaking FCC 98308, released Dec. 10, 1998. We will also work for efficient international harmonization of  X-spectrum allocations, product certifications, and technical standards for interfaces.Z$0 yO-ԍComments of Northern Telecom, Inc., at 9.Z  X-k108.` ` Moreover, we will promptly grant licenses so that broadband facilities can be  X-built promptly.&Z0 {O -ԍSee Comments of Williams Commun., Inc., at 16. For example, the Commission is now in the second licensing round for Kaband satellites and will rule on 18 requests for licenses and modifications or amendments to existing Kaband licenses.& We will continue authorizing broadband capacity for traditional geostationary C and KuBand frequencies, such as those used by DirecPC. We also expect  X_-to license new, innovative systems in the Ka and millimeter wave Bands.j\_0 {O-ԍThese bands are at 18 and 28 GHz and 3651 GHz, respectively. See, e.g., Allocation & Designation of Spectrum for Fixed-Satellite Services in the 37.5-38.5 GHz, 40.5-41.5 GHz, & 48.2-50.2 GHz Frequency Bands,  {Ox-IB Docket No. 9795, Report & Order FCC 98336, released Dec. 23, 1998.j Finally, we will use the tools at our disposal to promote competition and remove barriers to infrastructure investment. Through these efforts, we seek to promote the reasonable and timely deployment of broadband so that all Americans will have meaningful access to advanced telecommunications capability.  X - VI. ORDERING CLAUSES ă  X-l109.` ` Accordingly, IT IS ORDERED that, pursuant to section 706 of the Telecommunications Act of 1996, this Report IS ADOPTED.  XK-m110.` ` IT IS FURTHER ORDERED that the Motions to Accept LateFiled Comments or Reply Comments filed by APT, AT&T, Cablevision Systems, and U S West"48 0*%%ZZ " Communications are GRANTED.1 ` `  hh,Federal Communications Commission ` `  hh,Magalie Roman Salas ` ` hh,SecretaryKS  [ ck!s#%#({*,+/13368:;=?4 <DL!T$&)\+- 0d241"H90*%%ZZ"  X- :   APPENDIX A: SOURCES FOR CHARTS 2 AND 3 ĐlU 1) Technology categorization simply refers to the means by which broadband services are deployed (or expected to be deployed) to the consumer market. We have not included other  X-technologies such as T1, frame relay, etc., which are primarily offered to business customers. 2) Traditional analog phone wire and ISDN (Integrated Services Digital Network) both represent "narrowband" deployments to the home. They are included for comparison purposes. Regarding the installation cost per customer, the assumption here for traditional analog phone wires is that Internet service is provided over the primary line, which explains why the installation cost associated with an additional line is not incurred. Sources: Kenneth  X -Terrell, Breaking the Speed Limit, U.S. News & World Rerport, Aug. 10, 1998, at 60;  X -Matt Richtel, StartUps' Hopes are Riding on an Internet Route Through the Sky, N.Y.  X -Times, Nov. 30, 1998, at C1. 4 <DL!T$&)\+- 0d24` z hp x (#%'0*,.8135@8:, visited Dec. 15, 1998. As a sidenote, another provider, Loral's CyberStar, L.P., launched geostationary broadband services in October 1998,  XX-but these services currently are offered to business customers only.  See Beam This Up,  XC-Tele.com, Dec. 1, 1998, available at  X.-, visited Dec. 15, 1998. 4) ADSL stands for asymmetric digital subscriber line data service, which rides on traditional analog copper pairs of phone wire into the customer's premises. ADSL and ADSLlite are just two of the many varieties of DSL technologies, which differ by speed and the method in which they are deployed. To date, ADSL has been the most popular and certainly the most widely deployed in the consumer market. Maximum downstream speeds for ADSL reach up  Xx$-to 9 to 10 Mbps, while upstream speeds range up to 640 Kbps to 768 Kbps. See, e.g., AT&T"x$:0*%%ZZ(#"  X-Nov. 18, 1998, Ex Parte at 2, and DSL Summary Table, available at  X-, visited Dec. 13, 1998. Provider cost numbers include the cost of equipment on both ends of the line, ranging up to $800 per link.  X-See ADC Telecommunications, Inc., Jan. 11, 1999, Ex Parte at 7, 22; David Self & Jim  X-Szeliga, Running the DSL Numbers, at 6, available at  X-, visited Sept. 17, 1998. An important caveat to note when evaluating ADSL deployment is the constraint that homes served generally must be within 18,000 feet of a telephone company's central office to qualify for the service. Cost figures related to installation, basic service and Internet  X;-service are taken from multiple sources, including: Copper Mountain Dec. 15, 1998, Ex  X& -Parte, Attachment titled "DSL Overview for FCC," at 8; and Kenneth Terrell, Breaking the  X -Speed Limit, U.S. News & World Report, Aug. 10, 1998 and various websites of the Bell Operating Companies. 5) Also known as G.lite or "splitterless" ADSL, ADSLlite differs from ADSL primarily in the customer modem, which is selfinstallable and does not require a separate voicedata splitter at every user site. ADSL, by contrast, requires a "truck roll" by a service technician to the customer's premises to install the modem and voicedata splitter, and to test the inside wiring. The elimination of the truck roll reduces the provider's deployment costs  X[-significantly, by $200 or more, according to Carol Wilson, Is 'Lite' ADSL The Real Thing?,  XF-Inter@active Week, Nov. 2, 1998, available at  X1-; Aware DSL  X-Lite Presentation at 5, available at ), and is viewed in the industry as the most likely variant of xDSL technologies to succeed in the consumer market. The typical residential downstream speed of 1 Mbps is based on a product recently introduced by Nortel. Maximum downstream and upstream speeds are estimated at 1.5 Mbps and 512 Kbps, respectively, which demonstrates that while G.lite may be easier to  X-deploy than ADSL, its data speeds are not as fast. (See Copper Mountain Dec. 15, 1998, Ex  X-Parte, Attachment titled "DSL Overview for FCC" at 5; AT&T Nov. 18, 1998, Ex Parte at  X-2; and Telecommunications Technology DSL Summary Table, available at  Xj-, visited Dec. 13, 1998). Finally, since ADSLlite is still in trials at this time, no customers' price points have yet been established. 6) Cable modems require upgraded hybrid fiber coaxial (HFC) cable, capable of twoway digital transmissions. Typical residential downstream speeds of 1.5 3 Mbps (on up to 10  X -Mbps) are currently being advertised by cable providers. See AT&T Comments, Exhibit E, "Comparison of Prices In Areas Where Services Compete: Cable v. ILEC Broadband Access Services." Assuming a full 6 MHz channel is allotted, maximum downstream speeds can range up to 27 Mbps, while maximum upstream data rates can reach up to 2 Mbps, assuming  X$-that several 1.6 MHz channels are allotted. See, e.g., AT&T Nov. 18, 1998, Ex Parte at 2;"$;0*%%ZZ(#" AT&T Comments at 1112. An important distinction between cable modems and ADSL is that the HFC architecture is a shared medium, meaning that cable modem subscribers all compete for bandwidth to the Internet, although ADSL subscribers enjoy a dedicated connection. Cable companies are working to mitigate any traffic interruptions using several techniques, such as splitting nodes into subnodes, which effectively reduces the number of subscribers sharing the cable bandwidth. 7) Local Multipoint Distribution Service (LMDS) operates in the 28/31 GHz band, representing 1.3 GHz of spectrum. Currently, residential oneway broadband services are  X1-being offered at downstream speeds of approximately 500 Kbps. Upstream service is by  X -standard telephone copper wire. See BellSouth Comments, Exhibit E. Additionally, companies with licenses in the 24 and 38 GHz bands are offering twoway broadband services, but primarily to small and mediumsized businesses, as well as to some large  X -business customers.  See, e.g., Winstar Comments and Teligent Comments. Regardless of the spectrum band, pointtopoint solutions can achieve typical speeds up to 1.5 Mbps both  X -downstream and upstream, and can reach maximum speeds of 155 Mbps in both directions.   X-See ADC Telecommunications, Inc., Jan. 11, 1999, Ex Parte at 23. New pointtomultipoint systems, which reduce the time and cost of deployment, may reach data rates of 20 Mbps  Xh-downstream and 3 Mbps upstream.  See ADC Telecommunications, Inc. Jan. 11, 1999, Ex  XS-Parte at 23; Bernard Herscovich, Broadband Wireless Access From Vision to Reality, X X>-Change, at 3, available at . With regards to consumer costs for installation, customer premises equipment (CPE) and monthly service,  X-sources are: BellSouth Comments, Exhibit E; The Strategis Group, LMDS Marketplace:1997  X-Report at 23132. 8) Multichannel Multipoint Distribution Service (MMDS) represents wireless spectrum blocks in the 2.1 to 2.7 GHz band. Typical residential downstream speeds vary greatly. Current  X-offerings range from 256 Kbps (BellSouth Comments, Exhibit E at 1,  see Wireless One  X-information) to 1 Mbps and higher (American Telecasting Inc. Nov. 9, 1998, Ex Parte at 11). Typical upstream speeds are lower, in the 256 Kbps range (American Telecasting Inc. Nov.  Xb-9, 1998, Ex Parte at 11). Maximum speeds are considerably greater, comparable to HFC  XM-cable modem rates of up to 27 Mbps downstream and up to 2 Mbps upstream. See AT&T's  X8-Nov. 18, 1998, Ex Parte at 2. It should be noted that the MMDS spectrum, until recently, supported oneway transmission only (requiring a telephone return path for data services). With the Commission's recent ruling in favor of Multipoint Distribution Service (MDS) and Instructional Television Fixed Service (ITFS) licensees being able to offer two-way digital services, MMDS providers may now offer 2way highspeed data services. With regards to costs to consumers, retail prices vary from $49.95 up to $69.95 per subscriber per month for  X"-unlimited Internet access. See AT&T Comments at 16; Wireless Cable Modem Trials and  X#-Commercial Launches in North America, available at  X$- visited on Dec. 14, 1998."$<0*%%ZZ(#"Ԍ9) Future broadband offerings via satellites will be deployed over geostationary systems (at an altitude of approximately 35,800 kilometers) and nongeostationary systems (at altitudes typically below 2,000 kilometers for lowearth orbit satellites and approximately 10,000 kilometers for mediumearth orbit satellites). Currently, there are no providers offering such services, though there are several who are constructing systems and who plan to start offering 2way broadband satellite services early in the new millennium. Because of their 2way capability, these services will not need a standard telephone copper wire return path as DirecPC does today. Typical downstream residential speeds will range anywhere from 500 Kbps to 20 Mbps and, in some instances, possibly as high as 64 Mbps. Maximum speeds are being estimated at up to 155 Mbps. Upstream speeds will generally not exceed approximately  X -2 Mbps.  See John Montgomery, The Orbiting Internet: Fiber in the Sky, BYTE MAGAZINE,  X -Nov. 1997, at 10, available at ,  X -visited Dec.15, 1998; Alcatel USA Inc. Nov. 18, 1998, Ex Parte, Attachment titled  X -"Broadband Wireless Access" at 36; and AT&T Nov. 18, 1998, Ex Parte at 2. Cost information for these future deployments generally is not publicly available at this time. 10) Service providers include incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs), interexchange carriers (IXCs), internet service providers (ISPs), utility companies, multiple systems operators (MSOs), fixed wireless companies (holding LMDS and MMDS licenses), and satellite providers of broadband services via geostationary satellites (GEOs), via middleearth orbit satellites (MEOs) and via lowearth orbit satellites (LEOs). 11) Typical downstream residential speeds refers to the rate at which data is usually transmitted from the service provider down to the residential customer. Although many of the technology platforms mentioned above can support faster rates, most residential users either will not be offered these faster services (due to locational and technical limitations) or will not be able to afford such services if they are being offered. Higher speed services tend to attract primarily business customers. 12) Availability of broadband services is as of December 1998 to residential users. Availability of such services is expected to expand over time. 13) Cost to provider refers to those incremental infrastructure costs associated with the provision of broadband services, such as highspeed Internet access, to subscribers. Typically, these "costs per subscriber" will include equipment costs for both the transmission and reception of data streams to and from subscribers. The transmission equipment costs in particular require penetration assumptions in order to amortize those specific costs across actual or expected numbers of subscribers. Reception costs refer to the CPE costs incurred by the provider and then either leased or sold to the subscriber. "Costs per sub" excludes all recurring costs such as the cost of transporting the data streams and the cost to maintain the"p$=0*%%ZZ(#" system, and onetime costs such as customer acquisition costs and costs related to initial system infrastructure deployment (putting satellites in the sky, upgrading cable fiber to 750  X-MHz, etc.). We would expect onetime costs to decline as providers gain market share and realize certain economies of scale and scope. 14) Installation costs to customers refer to the onetime charge levied for a technician to visit the customer premises to install the relevant customer premise equipment and test/manipulate the inside wiring. Over time, these charges are expected to decrease, if not end altogether (depending on the technology platform), as new technologies and business partnerships with computer makers eliminate portions of this onetime cost. As complexity of services appears to limit sales, companies are beginning to focus on making simpler, easiertouse and install products which are more attractive to end users. 15) CPE costs to customers refers to the relevant equipment that a customer must buy or lease to subscribe to advanced services. Such equipment could include modems and splitters,  X -satellite dishes, settop boxes, fixed wireless antennas, etc. These costs, too, are expected to decline as standards are adopted and vendors manufacture subsequent generations of equipment. Retail markets for this equipment, particularly cable modems, are also expected to develop. 16) Monthly basic service costs to customers refers to the monthly fee a customer must pay the service provider for the basic "pipe" into the home for a copper phone line, a cable wire,  X -an antenna, etc. These costs will decrease over time if competition between different technology platforms takes hold in markets around the country. For example, we are already seeing DSL services priced to be directly competitive with cable modems, and also some  X-pricing plans which vary based on usage and bandwidth (e.g., more expensive for faster  X-speeds). It should be noted that the monthly basic service costs included here do not reflect  X-bundled pricing discounts, etc. 17) Monthly Internet service costs to customers refers to the monthly fee a customer must pay to gain access to the Internet. This cost may be separate from, or may be included in, the monthly basic service fee. Typically, service providers give customers a choice of buying a bundled basic service/Internet access option from them or of buying just the basic service. In the latter case, the customer would be responsible for signing up with a separate Internet Service Provider in addition to signing up with the primary basic service provider. Monthly fees for internet access typically average $19.95. 18) Total firstyear costs to consumers includes both onetime and recurring monthly costs to the enduser. Where ranges of enduser costs are concerned, an average of the range was taken to determine total costs. "t$>0*%%ZZ(#"Ԍ19) The "bits per buck" ratio is a short-handed way to illustrate today's performance/price trade-off that a typical end-user would face. Specifically, "bits per buck" here refers to the kilobits per second of data a user would receive for each dollar spent, based on recurring  X-monthly costs (not including one time costs for, e.g., CPE purchases and for installation). The higher the kilobits per second for each dollar spent, the better the value for the end-user. Clearly, broadband deployments in the lead today (based on subscriber numbers), such as cable modems, benefit from having lower price points and higher data speeds. However, as mentioned above, cable modem service is a shared medium and is susceptible to traffic loads. As traffic mounts, data speeds may fall to the level of ADSL or lower. ADSL and ADSL-lite, while offering lower data speeds, likely will see price declines over the next 12-18 months to levels more in line with cable modem pricing, thus improving their respective "bits per buck" ratios. " ?0*%%ZZ "  X-  5SEPARATE STATEMENT OF CHAIRMAN WILLIAM E. KENNARD l  In the Matter of Inquiry Concerning the Deployment of  X-K Advanced Telecommunications Capability, CC Docket No. 98146lU Promoting the deployment of advanced telecommunications capabilities to all Americans is at the top of my agenda. As today's Report concludes, we see billions of dollars being invested in broadband and an extraordinary level of infrastructure deployment. Advanced telecommunications capabilities are being rolled out in this country at a rate that outpaces the rollout of previous breakthrough products and services in the communications field. So by this objective measure at least, we are ahead of the curve. But it is very early in the game. Therefore I want to make it very clear that this issue remains at the top of my agenda. Regardless of the objective measures we use to measure deployment, on a subjective level I am impatient. I want the Internet to go faster and farther, for all Americans the young and the old, those in our inner cities and in our rural hamlets, those with every advantage and those with special needs. Those cut off from these highspeed networks today will find themselves cut off from the economic opportunities of tomorrow. And more importantly, they will be cut off from the most important network that there is the network of our national community.  X-In Section 706, Congress said that if we find that deployment is not reasonable and  X-timely, we must take immediate action to remove barriers to investment and to promote competition. Don't think for a minute that our Report today lets us off the hook. We must always be looking for ways to remove barriers to investment and to promote competition. I am particularly concerned about deployment in rural areas and in inner cities. Given the early stage of deployment of advanced telecommunications generally, it may seem difficult to discern the extent of the disparity between rural and urban areas. But today's Report suggests that in the very short term, demand for high bandwidth will really start to take off. My concern in that a geometric increase in demand may be mirrored by a geometric increase in the urbanrural disparity. Our challenge is to ensure that deployment is as ubiquitous as possible, in rural areas as well as urban areas. The Common Carrier Bureau already issues regular reports on fiber deployment, and I am directing them to redouble their efforts when it comes to scrutinizing the needs of rural America and whether those needs are being met. "j$@0*%%ZZ(#"ԌLater today Commissioner Tristani and I will be leaving for New Mexico to hold hearings on the need to increase the reach of modern telecommunications among Native Americans. And when I meet with the membership of the National Telephone Cooperative Association in a couple weeks, I look forward to learning more from them about how the FCC can help in the deployment of advanced telecommunications in rural America. It may well be that the answer, particularly in rural markets, lies in wireless and satellite technologies. It is therefore imperative that we continue to maximize the amount of spectrum available for broadband uses. In short, we must use all the tools we have to  X1-accelerate deployment of advanced telecommunications throughout America.xx- We had intended to take actions in that regard today, in one of the rulemaking items that we had to retool a bit in the wake of the Supreme Court decision. In that item we would have considered ways to give both incumbents and new entrants incentives to deploy DSL technology quickly. Staff is moving promptly to get that item back before the commissioners for a vote. That item will be a continuation of a number of recent initiatives by which we have been bringing more bandwidth to the home. We recently authorized twoway MDS service that is permitting licensees in that wireless service to upgrade their offerings. We also provided for the relocation and expansion of spectrum in the 24 Ghz band. Already we are seeing wireless operators moving to take advantage of that increase in spectrum availability for the provision of broadband. We also need to consider our universal service proceedings. Among other things, we need to make sure that wireless operators have the same ability as their wireline competitors to obtain certification to receive universal service support.  As I said before I am impatient. Because every day counts. For incumbents and new competitors, for investors, and, most importantly, for the American consumer. Finally, we must continue to monitor the extent to which broadband pipes are used to expand, not restrict, consumer choice. The Internet has grown enormously in recent years, in large part due to the openness of the networks that make up the Internet and the interconnection of all of them. Many consumers are used to being able to dialup access to the Internet provider of their choice. As new providers emerge, we must evaluate whether openness and connectivity are the best means to achieve our goal, and that of Congress, to increase the useful deployment of broadband. So while I am pleased to adopt this Report and its findings, our work is far from over."h$A0*%%ZZ(#"  \-  &X #L@ PI37(F6P##(s\  P6G;)0P#Separate Statement eof  \-&Commissioner Susan Ness#)X|L@ PI37|XP# l l  V-lU #XxHP|XP##Xj\  P6G; XP#Re:^Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion Pursuant to Section 706 of the Telecommunications Act of 1996, CC Docket No. 98146(#  Xd-#x"J+NXJ##+Xj\  P6G; XP#In Section 706 of the Telecommunications Act, Congress directed us to report periodically on the progress of broadband deployment to all Americans. Although the future is nearly impossible to predict, I am optimistic about the level of investment in infrastructure and the early signs of competition across technologies and among service providers. Business customers, for example, already have access to a plethora of broadband services. As the use of the Internet expands both at work and at home, consumer appetite for bandwidth will continue to grow. While I support the report and its findings, I write separately to elaborate on four points: First, because consumer demand for bandwidth is increasing, how we define "advanced" technologies will evolve over time. Already consumers are becoming increasingly sophisticated as are the applications they use. More and more of these applications are interactive and make creative use of color, graphics, and streaming video all of which require fast bitstreams. The gestation period for upgrading infrastructure to support new services, however, is not instantaneous. Thus, infrastructure providers must remain ahead of the curve, so that by the time consumers demand advanced services, those services have been deployed and are available. For example, from the planning stages to a satellite launch can take five years or longer. The cost of high speeds, new features and capacity, however, ultimately is borne by consumers. There is a tradeoff between abundant twoway broadband capability and the cost involved to deploy such capability to all Americans. The marketplace is sensitive to these issues. It does not make sense for government to mandate excessive capacity well beyond consumer needs. Second, we must ensure that advanced services reach "all Americans." Broadband must be available not only in our great cities, but across rural America. Different broadband access technologies work better in different locations and circumstances. Terrestrial wireless and satellite technologies, for example, are particularly wellsuited to reach hardtoserve areas. Thus, we have focused on allocating spectrum for wireless local loops. In addition, several broadband satellite systems are under development which, if deployed, could provide ubiquitous broadband capability in the fivetoten year timeframe. "$B0*%%ZZ#"ԌvThird, section 706 also specifically directs the Commission to assess the availability of advanced telecommunications capability to elementary and secondary schools and classrooms. We do not want to fall behind our global competitors which are expending significant resources to equip their students to compete in the global marketplace. Our current universal service programs should help to facilitate deployment of advanced services to schools and classrooms, although the demand for funds to date has outstripped supply.v Finally, as our report makes clear, in no respect are we are contemplating regulation of the Internet. In fact, the Internet is a medium of communication that has grown enormously in recent years with minimal government regulation. Two characteristics of the Internet that have contributed to its growth are its connectivity and openness. By connectivity, I mean the ability of backbone, last mile service, and content providers to become part of, or have access to, the Internet. By openness, I refer to the open, nonproprietary, technical standards by which the Internet operates. These principles are worth preserving. I am optimistic that, as multiple paths to the home and to businesses emerge, the competitive marketplace will safeguard consumers' interests in access, choice, and interoperability. Because we are still in the early stages of deployment, we should keep a watchful eye but practice regulatory restraint and give the broadband marketplace a chance to work. One thing is clear: over the next few years, the broadband marketplace will be very dynamic. For now, the tools appear to be in place for deployment of advanced telecommunications capability to all Americans in a reasonable and timely fashion. We will continue to monitor deployment to ensure that no barriers to competition or infrastructure investment arise. "C0*%%ZZ7"  X-   SEPARATE STATEMENT OF  COMMISSIONER HAROLD FURCHTGOTT-ROTH lU  X- Re:^ In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to  Xv-Section 706 of the Telecommunications Act of 1996 (CC Docket No. 98146). (# I support today's report that tentatively concludes that advanced services are being deployed in a reasonable and timely manner. While I recognize that not all Americans currently have access to such services, the actual deployment of this emerging market is growing dramatically. Moreover, I am encouraged by the substantial investments in broadband technology that numerous companies are making. This is one example of the success of the Telecommunications Act of 1996. The 1996 Act, and its technology neutral approach, anticipated that consumers would be able to receive such advanced services from a wide range of competitors including incumbents and new entrants. Indeed many of the companies offering such services to consumers were created by the 1996 Act's emphasis on local competition. This report is concrete evidence that the 1996 Act is working. "bD0*%%ZZ"     SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELLlU  X-Re:In the Matter of Inquiry Concerning the Deployment of Advanced xx- X(#(# X-Telecommunications Capability to All Americans in a Reasonable and Timely (#(#Fashion (CC Docket No. 98146). In this statement, I write separately to explain the bases upon which I support this Report. The deployment of advanced services, particularly broadband services, will radically transform American life, our society and our economy. The greatest danger for regulators, however, is our inability to keep pace with the speed of developments and innovations that the new networks will unleash. We must recognize that these new  X -technologies, combined with the procompetitive provisions of the 1996 Act,{ U yON-ԍ Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996).{ are shattering the traditional telecommunications paradigm. As aspects of this Report suggest, competition and the free market, as opposed to burdensome regulation, will ultimately prove to be the best means for achieving the widespread deployment that Congress envisioned. Section 706 of the Act commands that the Commission "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all  X4-Americans."4XU yO=-ԍPub. L. 104104, Title VII,  706(a), Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157. It is beyond doubt that such capability is not currently available to even a majority of Americans. Indeed, the market for broadband services is still in its infancy, notwithstanding evidence that its future growth will be strong. Thus, what we do today should assuredly not be interpreted as some finding that the lofty goal of Section 706 has been forever met and that our work is done. The remaining, I believe separate, question is whether deployment of advanced services, which is now underway, is proceeding in a reasonable and timely way toward this lofty goal. Based on what we know at this early stage, I think it is, and thus I am pleased to support this Report. Although I fully recognize that all Americans do not yet have access to advanced services, I agree with the Report's assessment that advanced services are being deployed in a "reasonable and timely" manner. Reasonable and timely achievement of the goal of deployment to "all Americans" must contemplate that such widespread deployment will take some time. But there is not yet a solid consensus as to all aspects of what constitutes reasonable and timely deployment. I believe this Report takes important steps toward developing such a consensus. In order to further that process in future proceedings, I offer"E0*%%ZZ" some principles here that should guide our efforts to assess and encourage advanced services deployment. In sum, I believe these efforts must take into consideration such factors as the tools that Section 706 prescribes for encouraging deployment of advanced services, consumer demand and willingness to pay, economic cost, and technological limitations. I begin to touch briefly on some of these factors in this statement. I also support the Report for what it does not do. In particular, I applaud the Report for declining, as a general matter, to propose solutions in search of problems. The Report correctly notes it is likely that multiple methods of broadband access to customers will develop over the next few years. To support this statement, the Report points to the massive levels of capital investment by the industry that in turn will cause extensive broadband deployment to all areas of America. The current market participants have a vested interest in providing advanced services as rapidly as possible to all Americans who are willing to pay the economic cost of these services. Regulators must resist the temptation to play parent to these infant services and prospective customers, dictating what products and services consumers will see, regardless of what they value and are willing to pay. Rather, regulators must strive to ensure the freedom of both consumers and suppliers to determine the economically optimal set of services, prices and availability in the open market. Notwithstanding the positive aspects of this Report, my participation in its development persuades me that the Commission should keep several critical considerations in mind as it undertakes future proceedings of this type: First, I believe that our assessment of what constitutes "reasonable and timely" deployment and that any actions resulting from that assessment should take into consideration the specific methods that Congress has prescribed for encouraging more rapid deployment. Through Section 706, Congress has evidenced its intent that the Commission refrain from enacting restrictive regulation in encouraging deployment. Congress has prescribed methods by which the market itself can facilitate growth. Congress commands that the Commission, in the event of unsatisfactory deployment of advanced services, "shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and  X7-by promoting competition in the telecommunications market."7U yO-ԍPub. L. 104104, Title VII,  706(b), Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157. Notably, Congress has not, under Section 706, created a program to mandate and fund deployment, but has instead instructed the Commission to let the influx of market participants and investment capital accelerate deployment and thus benefit all consumers. Thus, Congress mandates that we encourage deployment by removing barriers to investment and through other deregulatory marketbased methods. We should, therefore, refrain from enacting cumbersome standards and from requiring "rollout" deadlines that may cause hesitation from the capital markets,"!F 0*%%ZZ " thereby delaying, rather than accelerating achievement of the goals of Section 706. Second, and relatedly, I believe we should acknowledge that competition and innovation are the results of selfinterested market participants struggling to present the marketplace with newer and more useful products at competitive prices. We must keep in mind that regulators do not drive competition, market participants do. Our policies must reflect this understanding if we are to achieve our ultimate goal of making advanced services available to all Americans according to the methods Congress has presented. Third, we should be mindful of the important distinctions between the advanced services provisions of Section 706 and Section 254. While there does appear to be a connection between the universal service provisions of Section 254 and Section 706's concerns about the availability of advanced services to school children, there are distinct differences between the provisions' methods for achieving their respective objectives. The placement of advanced services provisions in Section 254(b) appears to contemplate the use of discounts or subsidies to support services that the Joint Board and the Commission decide should be supported (presumably in an explicit and competitively neutral fashion). Section 706, on the other hand, instructs the Commission to encourage reasonable and timely deployment to all Americans "by utilizing . . . price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating  X4-methods that remove barriers to infrastructure investment."4U yO-ԍPub. L. 104104, Title VII,  706(a), Feb. 8, 1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157. Again, in my view, the tools suggested for encouraging advanced services deployment under Section 706 appear to be fundamentally more marketbased and deregulatory in nature than those suggested under Section 254. Fourth, we should strive to develop a more realistic and, as such, complex understanding of how we should measure the pace of advanced services deployment. Such measurement must, in my view, be sensitive to factors such as consumer demand, willingness to pay, and economic cost. It must decidedly not degenerate into some arbitrary, subjective or political measure, based on what "goodies" we wish to give to consumers, however welldeserved or wellintentioned. The Report's analysis demonstrates that no two services can be deployed in precisely the same manner, and as such, any comparisons must be flexibly drawn. As the 1996 Act ushers in new levels of competition for all telecommunications market participants, we must take care to recognize that past experiences with a noncompetitive market will have limited usefulness. I appeal rigorously to commenters in future proceedings of this type to help us develop a richer understanding of how we should measure advanced services deployment consistent with the procompetitive, deregulatory framework Congress has erected."!G 0*%%ZZ "ԌFinally, as I said in my statement on the Notice initiating this proceeding, I believe we should be aware that requiring certain firms to provide access to their facilities or services to other firms or even to end users may have some unfavorable consequences. In particular, I think we should search for alternative solutions to encourage innovation and competition in the provision of "last mile" transmission to homes and businesses. While mandating access can bring about shortterm improvements in retail competition, it also may undermine incentives for developing new methods to circumvent the influence of incumbents over distribution. In conclusion, I would like to emphasize my appreciation of the commendable effort put forth by the Bureau, as well as that of my colleagues, on this critical and demanding issue. Additionally, I look forward to working with everyone at the Commission, in the States and in Congress to help make our effort to encourage the deployment of advanced communications a success." H0*%%ZZm "  X-   SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI l  V-In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications  V-wWCapability to All Americans in a Reasonable and Timely Fashion, Etc., CC Docket 98146 lU Section 706 of the Telecommunications Act of 1996 vests tremendous responsibility in the Commission. Beginning with today's Report, we must regularly assess whether advanced telecommunications capability is being made available to "all Americans on a reasonable and timely basis." If we find at any time that it is not, we must "take immediate action to accelerate deployment of such capability." In order to fulfill our obligation under Section 706, we need a full and accurate picture of the state of deployment of advanced telecommunications services. We need to know what advanced services are being offered and specifically where they are being deployed. As the Report acknowledges, for the most part we simply do not have that  X-information. Instead, the Report largely relies on other types of evidence e.g., analogies, anecdotes and evidence of investment in order to conclude that deployment of advanced services appears reasonable and timely. While I appreciate the effort in the Report to compensate for the lack of direct evidence in the record, I write separately to underscore my belief that the lack of such evidence makes drawing any conclusions about the state of deployment a tentative and inexact undertaking. I am especially concerned about the lack of hard evidence when it comes to our obligation to determine that advanced telecommunications services are being deployed, and are available, to "all Americans." Being from a rural state, I know the importance and the challenges of ensuring that all areas of our country have access to the kind of services covered by Section 706. Congress determined and I believe that it chose its words carefully that  X~-all Americans should have access to the advanced telecommunications services that will permit them to compete in today's information economy. I make these comments not to denigrate today's Report in any way. But I hope that we can build on this experience and improve our data and analysis for next year's Report. To the extent the record compiled in this proceeding is inadequate, I hope that we can ask more pointed questions in the next Notice of Inquiry and, where necessary, be proactive in gathering information ourselves. Congress directed us to report on the state of deployment of advanced services, not on the state of the comments submitted by outside parties.