CITI Notebook
U.S. broadband isn’t lagging the way it’s portrayed to be, said Eli Noam, CITI dir., because the next generations of “superbroadband” and “ultrabroadband” should put the country among the top nations for connectivity and performance. Even the figures often cited about our current “poor” showing in broadband are generally unreliable, Noam said: FCC statistics are very different from year to year; 6 separate “reputable” reports on broadband penetration in Spain have 6 widely divergent results; and the World Economic Forum Networked Readiness Index even has the U.S. as the top country. “If you torture the data enough, it will confess to anything,” he added. Also, he said, the 2.5 GHz spectrum band is more competitive and responsive and easier to integrate vertically than the 1.5 GHz band used in many countries currently outranking the U.S. in broadband penetration. Noam said this alone could significantly lessen the gap between the U.S. and so-called broadband leaders.
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Deregulation and consolidation have really helped telecom enterprise-side margins, said Merrill Lynch Global Coordinator-Telecom Services Glen Campbell. The “tighter, more rational market” is moving not only telecom but its cable rivals toward better margins -- and higher market value -- even if revenue doesn’t climb they way investors may want to see, he said. He said the U.S. market is “maturing” but it’s no Western Europe: Broadband penetration is still growing 10% or more a year and will do so for the foreseeable future.
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The pressing question in telecom competition is whether there is access competition, said Robert Pepper, senior managing dir.-global advanced network policy, Cisco. There’s clearly competition at the backbone and core levels of U.S. networks, he said, so the focus for regulation should be on asking the access question; so far, he said, the answer is yes. Pepper said he’s “excited” at the prospect of even more access-level competition coming from fixed wireless technology providers in the coming years. He added that the net neutrality debate “isn’t about net neutrality,” but some people’s view of the govt.’s role in business deals. That’s because while much network management technology can actually be used to create very competitive access environments, he said, over-regulation can completely stifle it.
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“Content is not necessarily king, especially in a democracy,” said Philippe Camus, Lagardere USA chmn., warning the CITI audience that technology is much less of a wild card if implemented properly. Because the content side of communications can be so full of “red herrings,” and recently content providers are competing against their own customers in the form of YouTube.com, telecom companies need to differentiate on the means of delivery rather than relying on popular entertainment content.