Power Line Communications Association Power Line Communications Association 3rd Annual Conference & 3rd Annual Conference &
Strategic Business BriefingStrategic Business Briefing
Keynote Speaker Session:
Michael D. GallagherActing Assistant Secretary for Communications and Information
U.S. Department of CommerceNational Telecommunications and Information Administration
www.ntia.doc.gov
Washington, DCDecember 11, 2003
Economic IndicatorsEconomic Indicators
Thanks to the President’s policies, America is once again growing robustly:
“Real” personal consumption expenditures rose 6.4 percent in the third quarter this year compared to a 3.8 percent growth rate in 2Q 2003.
“Real” GDP grew at an 8.2 percent annual rate during the third quarter.
The manufacturing sector enjoyed a 9.0 percent increase in productivity in the 3Q.
This year, the S&P 500 is up over 20 percent. The Nasdaq Composite is ahead 42 percent. The President will not be satisfied until every American who
wants a job has a job.
Administration Commitment to Administration Commitment to Technology DevelopmentTechnology Development
"The role of government is not to create wealth; the role of our government is to create an environment in which the entrepreneur can flourish, in which minds can expand, in which technologies can reach new frontiers."
-- President George W. Bush, Technology Agenda, November, 2002.
Growth of Telecommunications Growth of Telecommunications (Selected Markets)(Selected Markets)
Annual Revenues in $ Millions by SectorAnnual Percentage Growth
of Revenues by Sector
Source: Telecommunications Industry Association
0
50000
100000
150000
200000
250000
2000 2001 2002
$ M
illion
s
High-Speed Internet
Wireless Services
Spending on Services in Support of Voice & Data Comm. Equip.
0
50
100
150
200
250
2000 2001 2002
Perc
ent
High-Speed Internet
Wireless Services
Spending on Services in Support of Voice & Data Comm. Equip.
Broadband Household AccessBroadband Household Access
12.313.7
15.4
17.2
19.120.7
22.7
0
5
10
15
20
25
Q1-2002 Q2-2002 Q3-2002 Q4-2002 Q1-2003 Q2-2003 Q3-2003
Household
s (
mill
ions)
Source: Leichtman Research Group as reported in USAToday on11/14//2003.
Broadband Market ShareBroadband Market Share(Residential Users)(Residential Users)
Cable Modem
59%
DSL34%
Wireless3%
Other4%
Source: Pew Internet & American Life Project (August, 2003)
Broadband Competition Heats UpBroadband Competition Heats UpAnd Prices Come DownAnd Prices Come Down
May 2003: Verizon boosts broadband speed to 1.5 mbps and lowers its price to $29.95 per month as part of a package.
“We expect . . . to win new business among customers using competing technologies and to open a new
market among the millions of consumers who have yet to
purchase broadband services."
December 2003: SBC markets its SBC YAHOO! DSL service through 2000 retail outlets for $26.95 per month as part of a package.
“The [SBC] companies are innovators in expanding the reach of DSL . . . through an aggressive expansion
plan.”
Voice Over Internet Protocol (VOIP)Voice Over Internet Protocol (VOIP) VOIP is like gravity – it is an irresistible force
• 10% of international minutes were IP in 2002; projected to be more than 50% by 2007 (Probe Research 2002)
• About 1 billion business phone lines worldwide were IP by the 2Q 2003, or about 12% of the total; numbers are projected to be approx. 1.8 bill. (17%) by year end 2003. (Wall St. J., Oct. 9, 2003)
VOIP Could Increase Competition in Equipment and Services• Business spending on IP phone equipment worldwide more than doubled
between 2002 and 2003 to approx. $1 bill. (nearly 20% of all business phone equipment purchases). (Id.)
Need sound regulatory approach to VOIP – should not be a “grey market” service
Functions of The Functions of The National Telecommunications and National Telecommunications and Information Administration (NTIA)Information Administration (NTIA)
President’s Principal Adviser on Telecommunications and Information Policies/Agency of Commerce Department
Authorizes Spectrum Use by Federal Agencies
Operates Telecommunications Research Laboratory
Participates with State Dep’t and FCC in International Telecommunications Activities
Administers Telecommunications Grant Programs
Spectrum PolicySpectrum Policy
Spectrum Policy: The who, what, where, when, and why of access
Great potential for government action towards a positive effecton economic and national security
NTIA and FCC share joint jurisdiction over spectrum• NTIA authorizes use by Federal Government Agencies• FCC authorizes all other spectrum use, by license or by license exempt
operation• NTIA and FCC work together to determine national and international
allocations
Administration Successes Administration Successes in Opening Spectrum in Opening Spectrum
to New Usesto New Uses
Third Generation (3G) Service
Ultrawideband
5 GHz Spectrum
70/80/90 GHz
NTIA & the BPL ChallengeNTIA & the BPL Challenge
BPL could be a source of innovation and competition in the broadband marketplace.
The central technical issue from NTIA’s viewpoint is the risk that BPL systems might interfere with federal government radio communications or other private users that are important from a national perspective:
• FCC Part 15 rules establish a means to accommodate unlicensed devices in balance with the risk of harmful interference to authorized radio services.
• The Part 15 rules require operators to eliminate harmful interference.
• Therefore, BPL operators have an incentive to design and operate their systems to avoid such interference.
NTIA ConcernsNTIA Concerns
Range of interest for BPL is 1700 kHz to 80 MHz frequency range.
At these frequencies, signals bounce off the ionosphere and can travel great distances, thus increasing the potential for interference.
There are over 80,000 assignments for Federal Government operations in this range.
National emergency response, law enforcement, search and rescue, and aeronautical and maritime operations are supported, among others.
At some frequencies, certain operations, e.g., distress and safety, require and are entitled to special protection.
In principle, efficient interference mitigation procedures can enable higher risk tolerance.
NTIA StudiesNTIA Studies NTIA is studying interference risks and potential means
for making risks more tolerable:
• Risk is controlled by Part 15 “field strength” limits and compliance measurement procedures.
• Risk tolerance is established by the technical and operational nature of the radio communications operations.
• Objective is to accommodate BPL with acceptable risk.
Over 10 million BPL signal samples have been measured to define the signals radiated by BPL systems.
Numerous variants of BPL deployments have been modeled to further characterize potential BPL emissions.
NTIA Studies NTIA Studies (con’t)(con’t) NTIA’s Phase 1 report will address potential local interference
involving overhead power lines:
• Will recommend radiated emission limits, compliance measurement procedures, and other authorization conditions.
• Anticipate completion and filing with FCC filing this Winter.
Phase 2 will further address these and other BPL aspects and should be completed in mid-2004:
• Potential long-distance interference from large scale, mature deployments of BPL systems;
• Underground and indoor wiring.
ConclusionConclusion
The American economy is growing. Broadband is an important and growing part of the
economy. The Administration has developed successful policies to
advance broadband, including successful radio spectrum policies.
BPL could be a source of innovation and competition. The Administration is addressing the balance between
accommodation of BPL and protection of vital federal and private services.