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Does redefining universal service help bridge the digital divide?

When there was a monopoly phone service prior to the 1984 divestiture, the prime directive in providing telecom was to "give exclusivity in the territory and we will provide universal service to everyone".

In exchange for getting exclusivity to a geographic subscriber base, the traditional phone companies ensured that everyone got service to their house or business at a fair price. There was one price across the board. That worked very well and the network infrastructure in the United States was second to none worldwide.

Were some subscribers subsidized in order to get a universal price? Definitely.

If you were across the street from a central office or seven miles away, you paid the same price for a POTS (plain old telephone service) line. While you could get various calling packages and other custom calling features, basic voice service was at a very standard price across the board. Prior to the divestiture, long-distance subsidized local service.

Since the divestiture, prices for technology have spiraled downward from thousands of dollars to pennies or to something totally superior in various areas of technology. If you were in this industry in the early 1980s, you were looking at online applications that were just beginning to appear. Only major companies could afford anything sophisticated (like major call centers or online applications).
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To give a very common example in 1981, a high-speed modem cost about $7,000 in a major network topology. That high-speed modem could run at a blazing 9,600 bps. That's right: 9,600 bps on an analog line. Most networks were running analog at 2,400 bps or 4,800 bps with a very limited and expensive 56 Kbps digital capability that was available in about 25 major metropolitan areas. That was the extent of the digital market.

Several years later in 1985, I remember having arguments with Illinois Bell engineers about running a "high-speed modem" at 19.2 Kbps on a client's dial-up line.

They said the line wouldn't be able to support that type of speed and the tariff stated that dial-up lines were only guaranteed to support up to 4,800 bps (or 4.8 Kbps). The error detection and correction capabilities of that new modem could actually support that speed on an analog dial-up line. A huge myth was broken. Better technology made it possible to go faster on dial-up lines.

It really reflected what Harold S. Geneen, the former CEO of ITT (International Telephone & Telegraph), once stated: "Words are words, explanations are explanations and promises are promises, but only performance is reality."

As we have come from 1984 to the present, many technological breakthroughs have occurred, business dynamics have changed and many major events have happened. Here are just a few major technology highlights:
  1. We have gone from employing analog to digital technology in central offices and the basic fabric of the public network infrastructure.
  2. We have perfected the use in fiber-optics and have deployed it in both short and long-distance network infrastructure.
  3. We have adopted PCs as common, ubiquitous work tools.
  4. We have perfected and deployed VSAT technology (small satellite dishes).
  5. We have perfected and have deployed various wireless technologies.
  6. We commercialized the Internet.
  7. We came up with employing new network technologies such as ISDN, DSL and IP that have provided new capabilities to both residential and commercial customers as well as internal operations and phone company maintenance procedures.
From an industry perspective, we have seen the original major break up or "divestiture" of the Bell system to a partial "revestiture" of the Bell system where a majority of its parts have been merged back together.

Other major business and regulatory events occurred including the Hinsdale central office fire; the ubiquitous acceptance of cell phones; the MCI/WorldCom bankruptcy disaster; the consolidation of the cable TV industry; the Telecom Act of 1996; the emergence of new major players like AOL, Cisco and Google; the crash of the Nasdaq and the dot-com bubble; and other significance impacts such as Sept. 11, 2001 on the market as a whole.

What is Universal Service?

With all that has happened, what is universal service today? What should it contain? While voice service is already a given, what about data services? Should everyone get 1.5 Mbps? What about 10 Mbps? No, let's make it true broadband using my definition: 1 Gbps.

There are some people out there still arguing about megabit capabilities. Get a clue. We are at a gigabit level at the transport level and at terabytes at the storage level. In the near future, we will be looking at terabit speeds and commonly transferring terabytes of information.

What about video services? Should that be included as well? Should universal service include video? What about the basic cable package? What about HBO? Better make sure the History Channel and ESPN are included.

Universal Service and the Digital Divide

There are some initiatives in Illinois like the Statewide Community Forum on Digital Literacy & Digital Government. Are they addressing all this? I'm not too sure. To me, universal service has gone from a one-dimensional definition (voice) to a three-dimensional definition (voice, data and video). Should assistance programs such as Lifeline and LinkUp provide funding for data and video services as they do for voice services?

In all the heated and emotional debates I hear from all sides of the network infrastructure argument, I do not hear any type of agreed-upon standard to which everyone has committed. Hopefully some of the politicians and their advisors are reading this because many bills and legislation that are being kicked around are laughable. What are the tradeoffs for universal service?

Maybe it's because they don't understand this very complex issue as much as they think they do. To paraphrase Geneen: rhetoric is easy; reengineering reality is not.

So What's the Definition?

If the definition of universal service is to be used at all, it must first be an agreed-upon national standard and it must cover all three areas. It can't be different for Illinois and Wisconsin as compared to California and New York. Still, that's where we seem to be headed.

In the 20-plus years of divestiture, one of the greatest mistakes was letting regional Bell operating companies (RBOCs) set different equipment directions that later had to be reengineered to be more compatible. Having one standard is critical for rapid deployment of new network services as well as maintaining what is out there.

In the mid-1980s, ISDN was touted as becoming a ubiquitous network service by the 1990s. That never happened. It never even came close as many implementation issues had to be melded together across multi-vendor platforms.

Ubiquitous service is something that has been eroded by several different factors: the RBOCs creating regional rather than national strategic directions, new emerging technologies, multi-vendor integration issues and the marketplace accepting different directions.

After thinking about it, it becomes apparent that there should be a national standard. You can't have someone in New York stating that their basic service is running at 1.5 Mbps while someone else is promoting 6 Mbps and saying it is their basic starting service.

As I have editorialized on earlier, California has an initiative of "One Gigabit or Bust" by 2010. I personally believe that is a good objective to set as a national goal. Broadband is not 1.5 Mbps. That is the old T-1 standard speed that has been around for more than 40 years. The problem is you have some people getting giddy over the fact that they just installed a "high-speed line" into their house and they have 1.5 Mbps running to their PC.

Let's either concentrate on the definition of universal service or abandon it as a concept. It should have a framework like this:


Before any laws are decided upon, a clear and precise definition that is accepted by everyone around the table should be adopted.

Carlinism: Just as one course in first aid doesn't make you a brain surgeon, one course in technology doesn't make you a technologist.

James Carlini is an adjunct professor at Northwestern University. He is also president of Carlini & Associates. Carlini can be reached at james.carlini@sbcglobal.net or 773-370-1888. Copyright 2006 Jim Carlini.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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