Selected Summary of Information Superhighways: The Economics of Advanced Public Communication Networks

Ultimately, the U.S. will have a universal broadband network (UBN). Egan addresses transitional problems in his recent book, Infonnation Superhighways. First, we need to know the extent to which consumers would value a UBN network. Who should bear the risks associated with massive infrastructure investments? Next, there are questions about whether demand-pull technological progress will be rapid enough to establish and maintain a UBN network. Technology-push progress is also expected to reduce costs in the long run and to improve quality of service. Egan reminds us that some stakeholders will gain and some will lose during the 1990's. The regulatory policies adopted in the coming years will influence the pace and pattern of investment in advanced public communication networks in the U.S. Egan argues that it is important that policy discourage fragmentation within the network. *The author wishes to thank Sanford Berg and Dennis Weisman for comments on an initial draft. Support was provided by the Public Utility Research Center. The views expressed here do not necessarily reflect those of sponsoring organizations. Published in Telecommunications Policy, November 1993. -1Change is the fundamental feature of the telecommunication industry, so analysts can only take snapshots at a point in time, and can predict only the broad outlines of future developments. However, it does seem clear that the next stage will involve the development of universal broadband network (UBN). In order to reach that stage, we must first consider steps needed to get there. Bruce L. Egan described such transitional considerations in his book, Information Superhighways: The Economics of Advanced Public Communication Networks. The following summarizes selected portions of the book. First, we survey the major technological components of this future UBN system. We then explain key features of likely cost structures and describe demand-pull considerations. A breakdown of major supplier-stakeholder groups and their roles in this transition period follows. The final two segments highlight possible setbacks and emerging alliances as well as alternative scenarios arising from additional developments. Implications for future public policy initiatives also are discussed. TELECOMMUNICATIONS TECHNOLOGY Egan suggests that future communication networks will have three major components: fiber optics, microwave radio technology, and satellite technology. The three technologies have advantages and disadvantages.