The broadband ecosystem includes the broadband networks, broadband-compatible devices, content and applications. Networks, devices and applications drive each other in a virtuous cycle. If networks are fast, reliable and widely available, companies produce more powerful, more capable devices to connect to those networks. These devices, in turn, encourage innovators and entrepreneurs to develop exciting applications and content. These new applications draw interest among end-users, bring new users online and increase use among those who already subscribe to broadband services. This growth in the broadband ecosystem reinforces the cycle, encouraging service providers to boost the speed, functionality and reach of their networks.
Broadband networks can take multiple forms: wired or wireless, fixed or mobile, terrestrial or satellite. Different types of networks have different capabilities, benefits and costs. The value of being connected to the network increases as more people and businesses choose to adopt broadband and use applications and devices that the network supports. Several factors contribute to their decisions. These include whether they can afford a connection, whether they are comfortable with digital technology and whether they believe broadband is useful.
Applications run on devices that attach to the network and allow users to communicate: computers, smartphones, set-top boxes, e-book readers, sensors, private branch exchanges (PBX), local area network routers, modems and an ever-growing list of other devices. New devices mean new opportunities for applications and content.
Applications and content
The broadband ecosystem includes applications and content: e-mail, search, news, maps, sales and marketing applications used by businesses, user-generated content and hundreds of thousands of more specialized uses. Ultimately, the value of broadband is realized when it delivers useful applications and content to end-users.
Government policies and actions can foster innovation and investment across the ecosystem in four key areas:
- Enacting policies to foster competition. Competition is a major driver of innovation and investment, and the Federal Communications Commission (FCC) and other agencies have many tools to influence competition in different areas of the broadband ecosystem. These tools are best applied on a fact-driven, case-by-case basis. Therefore, continuous collection and analysis of detailed data on competitive behavior must be the linchpin of effective competition policy.
- Freeing up more spectrum. The federal government controls and influences the availability and cost of spectrum. Spectrum plays an important role in the economics of broadband networks. By ensuring spectrum is allocated and managed as efficiently as possible, the government can help reduce the costs borne by firms deploying network infrastructure, thus encouraging both competitive entry and increased investment by incumbent firms.
- Lowering infrastructure costs. Government also controls and influences the availability and cost of other resources, such as pole attachments and rights-of-way. As with spectrum, ensuring these assets are allocated and managed as efficiently as possible can reduce the costs borne by firms and foster competition and investment.
- Investing directly through research and development. Government should invest directly in areas where the return on investment to society as a whole is greater than the return for individual firms. Research and development (R&D) is one of these areas, as the effects of R&D often extend beyond those anticipated by its funders in unanticipated ways.
- David B. Audretsch & Maryann Feldman, "R&D Spillovers and the Geography of Innovation and Production," 86 American Econ. Rev. 630, 630 (1996).