“Naked DSL” - Moving Towards a Digitized Society

“Naked DSL” - Moving Towards a Digitized Society

Broadband Internet (also referred to as �high speed� Internet) is very expensive in the U.S. and it shows. The U.S. does not even rank in the top ten, when it comes to broadband penetration rates of the world�s top economies (�broadband penetration rate� is fancy jargon for examining the influence of broadband via number subscribers) . But it is not the technology that is lacking, it is complex regulatory policies that are putting the U.S. farther and farther behind in creating a true digitized society.

Price is the number one reason why broadband has not reached a much larger number of U.S. households. Consumers do not want to pay $40+ per month for high speed access. The result is less demand for these services and that means less revenue for the broadband providers. Less revenue means that broadband providers do not have as large of an incentive to further invest in their network infrastructure, as well as R&D to rollout and improve these technologies. Then couple that with government regulated competition, which essentially forces those like Verizon, Qwest, and other Baby Bells to open up their local lines for competition and it is no wonder that these providers are dragging their feet.

But there is much more than meets the eye.

Prices are high because there is not much competition in the broadband market (which is why the government has stepped in time and time again). Today, there are only two real broadband alternatives - DSL (which stands for Digital Subscriber Line � essentially, high speed Internet over your phone line) and cable (high speed Internet over your, well, cables). Often, only one of these two options is available. In many areas, especially rural communities neither are.

Therefore, these providers can essentially do whatever they want, including charging ridiculously high monthly rates or requiring that their services are bundled (for example, DSL users would be required to have a phone line or cable users required to have a premium cable package).
Enter �naked� DSL.

�Naked� DSL refers to the offering of DSL without requiring consumers to have a local phone line from that same provider. And it looks as if the FCC will soon address this issue. More than several states have specifically legislated that providers offer consumers DSL the �naked� way. Essentially, state public utility commissions want to provide more options and foster more competition, which will in the end benefit consumers of their state.

From the looks of things, it seems the FCC�s current thought process is to �claim sole jurisdiction over DSL� and suspend the states� rulings, which means competition will remain stagnant and keep prices high.

While circuits and lines may cross state boundaries, the state legislated �naked� DSL makes more sense. The federal government should not have the authority to regulate how DSL is rolled out across the nation (or rather how it is not being rolled out). Suspending moves like this one will not help competition and in the end will keep prices high, ensuring the U.S. remains in the back of the pack in broadband penetration rates when compared to its counterparts.