*Pages 1--16 from Slide 1* Characteristics of the U. S. Broadband Market Donald Abelson Chief, International Bureau Federal Communications Commission 1 Federal Communications Commission 2 Internet Growth— US Households Online 0 50 100 150 200 250 1996 1997 1998 1999 2000 2001 2002 2003 2004* 2005* 2006* 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Online Population (Number) Online Population (Percent) Percent of Population Millions of Users Source: The Digital Economy Fact Book, Fifth Edition 2003 2 Federal Communications Commission 3 High Speed Line Growth 1999- 2004 Source: FCC’s High Speed Services for Internet Access Report, 6/ 04 High Speed Lines (millions) Cable, 1. 4 Cable, 18. 6 ADSL, 0. 4 ADSL, 11. 4 Other Wireline, 0. 6 Other Wireline, 1. 4 Fiber, 0. 3 Fiber, 0. 6 Satellite/ Fixed Wi r e l e ss, 0. 4 Satellite/ Fixed Wi r e l e ss, 0. 1 0.0 3.0 6.0 9.0 12.0 15.0 18.0 21.0 24.0 27.0 30.0 33.0 1999 2004 3 Federal Communications Commission 5 Historical Residential Broadband Market Share 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q2 03 DSL Cable 5 Federal Communications Commission 6 Cable Modem Growth in the U. S. 1.41 3.58 7.1 11.37 16.45 18.6 0 3 6 9 12 15 18 1999 2000 2001 2002 2003 Jun- 04 Millions of Con nection s Source: FCC’s High Speed Services for Internet Access Report, 12/ 04 6 Federal Communications Commission 7 DSL Price Drop Source: USA Today, Nov. 14, 2003, p. C1; Wall Street Journal, Nov. 28, 2003 0 10 20 30 40 50 60 Feb. 02 Feb. 04 Verizon SBC Doll ars $49.95 $49.95 $34.95 $26.95 7 Federal Communications Commission 8 States with FTTH Deployment Source: Telephony 8 Federal Communications Commission 9 FTTH Homes Passed 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2001 2002 2003 2004 Source: Atlantic Engineering Group; Ex Parte Presentation, Received September 28, 2004, WC 01- 338 9 Federal Communications Commission 11 Wireless Broadband Access Task Force “To ensure that our nation’s regulatory policies concerning wireless broadband do not impede innovation or delay service availability across America, the FCC should be vigilant and proactive in identifying and understanding emerging technologies and in ensuring that existing regulatory policies do not get in the way of these advances. Innovative technologies call for innovative regulatory policies. And the American public benefits most when regulatory policies enable consumers and businesses to fully tap the benefits of emerging wireless technologies.” 11 Federal Communications Commission 13 Wi- Fi Hotspots by Location (Worldwide 2001- 2004) Source: Gartner Dataquest, June 2003 -20,000 40,000 60,000 80,000 100,000 120,000 2001 2002 2003E 2004E Other Community Hotspots Stations and Ports Enterprise Guesting Areas Retail Outlets Hotels Airports 13 Federal Communications Commission 14 Wireless Innovations 0 1 2 3 4 5 6 7 8 9 10 R e v e n u e E s t i m a t e s (in billions) $3.3 Billion $6.4 Billion $0 $5.4 Billion 2003 2007 2003 2007 Wi- Fi WiMax Source: BusinessWeek, April 26, 2004 14 Federal Communications Commission 16 Largest Broadband Markets in the World 37 19 12 7 6 0 5 10 15 20 25 30 35 40 U. S. Japan Korea Germany Canada Source: OECD, December 2004 (Millions of broadband subscribers) 16