Wednesday, November 07, 2012

Increasing Velocity of the All-IP Network Transition

Free State Foundation scholars have repeatedly emphasized the essential role of investment in transitioning to next-generation broadband networks. That ongoing transition will require strong investments by competing service providers, across a variety of platforms, both up and down the value-chain of the broadband services marketplace.
The transition to next-generation broadband networks just got a shot in the arm. AT&T announced its Velocity IP (VIP) investment plan. Under the plan, AT&T indicates it will "invest $14 billion over the next three years to significantly expand and enhance its wireless and wireline IP broadband networks."
This undertaking includes a robust expansion of next-generation wireless services:
AT&T plans to expand its 4G LTE network to cover 300 million people in the United States by year-end 2014, up from its current plans to deploy 4G LTE to about 250 million people by year-end 2013. In AT&T's 22-state wireline service area, the company expects its 4G LTE network will cover 99 percent of all customer locations.
A heavy investment-backed expansion of its wireline IP services is also slated. "AT&T plans to expand and enhance its wireline IP network to 57 million customer locations (consumer and small business) or 75 percent of all customer locations in its wireline service area by year-end 2015." This includes expansion of its U-verse video service by more than one-third, to pass some 33 million customer locations. Also, "AT&T plans to proactively expand its fiber network to reach an additional one million business customer locations."
AT&T's VIP investment plan promises a greater abundance of innovative services for wireless and wireline platforms, including consumers of video services and enterprise broadband customers. Job creation is another benefit flowing from this kind of investment.
Hopefully, AT&T's investment in all-IP networks will be an indicator of growing investment in the marketplace, with competing providers increasing their investment in next-generation broadband service offerings.
The broadband networks of the future depend on investment in the present. Such investment depends on pro-investment public policies. That means relying on the forces of free market competition while keeping regulation to a minimum, offering competing providers regulatory certainty that encourages them make pro-investment decisions.