U.S. cities make 'intelligent' list in 2008, but national policy still 'pathetic'

HONOLULU – The Pacific Telecommunications Council (PTC) this week hosted the unveiling of Intelligent Community Forum's annual finalist list, which this time included several cities from the United States, which had been absent from the two previous lists. However, the conference chair said that national telecom policy is "pathetic" and warned that the United States is slipping behind other countries in broadband use, even as Internet video takes off.

The PTC, based here in Hawaii, opened its 30th anniversary conference this week with the largest attendance in five years, and a 20% increase from last year, as thousands of ICT professionals converged in the biggest East-West conference in the industry.

Organizers cited revitalized industry economics, global technological innovation, and currency strength relative to the U.S. dollar among the factors for the rebounding Pacific hemisphere telecom sector.

Conference Chair and PTC Vice President Ken Zita’s annual issues and trends presentation spotlighted video on the Internet as already having a huge impact. In 2006, U.S. Internet users watched 86 billion video streams, averaging 67 per user a month at 8 minutes each. Within five years, Yankee Group estimates the total will grow to 221 billion video streams annually; YouTube and news clickthroughs are popular with all demographics, not just the young - 69 percent of video users are over 35 years old.

The Internet video boom comes even before widespread IPTV deployment, which is still relatively modest at a million viewers each in China and the U.S. Compared to cable and satellite, IPTV is still costly to deploy, yet growth should average up to 700 percent in the next three years.

Zita said mobile video will grow as fast as networks can absorb bandwidth demands, pushed by the iPhone effect along with other smartphones, and will drive innovation in converged services.

Yet, he noted, “service convergence and technology continue to race ahead of government regulation.” 

Better policy needed

He commented that current “U.S. policy is pathetic.” Korea and especially Japan, which is pursuing a goal of completely overhauling by 2011 the regulatory structure for technology policy that has stood for 60 years, will erode U.S. broadband leadership.

Throughout the conference, there was continuous reinforcement of the need for a more coherent U.S. broadband policy. Although President Bush in 2004 called for affordable broadband with national access by 2007, the U.S. continues to drop in OECD rankings, now 15th in per capita penetration. Many commentators noted the widespread criticism of the FCC’s definition of broadband speed as 200 Kbps in one direction, and comparisons with Japan, which provides higher speeds at lower prices. This was seen as critical in a period of higher video use of the Internet in particular.

Zita’s trends forecast this year focused on five areas:

• End of the “economics of bandwidth.” New service revenues are decreasingly associated with specific infrastructure, and increasingly, with connectivity. Incumbent carriers and providers are bypassed.
• Open access. Telcos worldwide, led by BT, are acknowledging the need to open their networks – to accelerate innovation, and respond to threat of the Web.
• Opportunities for independent vendors. Taking Web 2.0 to a new level, vendors are selling digital media services directly to consumers.
• Advertising and context more important than ever. Leveraging intelligence of the network (especially location). On-demand, not utility services, are becoming more significant. “Do all roads lead to Google?” Zita asked.
• Complexity for all organizations. Technology can be integrated, but the real problem is getting organizations to evolve. Cultural barriers and operational legacy: procedures, mindset, silos are the complexity issues now. Service-oriented architecture is critical, Zita declared.