Report: Super broadband initiative would cost trillions

The national broadband policy advocated by the trade group TechNet would cost as much as $1 trillion in optical network buildouts in the first five years to bring the goal to reality, according to a report released today by TeleChoice.

TechNet is proposing that the federal government commit to a plan that would bring 100 Mb/s capacity to 100 million homes by 2010. That might be easier said than done, said TeleChoice CEO Danny Briere, citing the strain that such an initiative would have on today’s optical fiber backbone.

“What happens to the backbone when you have a 50-times, or 100-times increase in demand, which is what would occur if the TechNet proposal becomes reality?” he said. “The carriers aren’t going to be able to increase their pricing by 50 times or 100 times to compensate. So how is that level of service going to profitable?”

One solution would be to shift a certain percentage of the traffic that would flow over a super broadband infrastructure to off-peak hours, according to the TeleChoice report. A moderate shift would result in “a relatively high likelihood” that any investment made by long haul or metro carriers in such an infrastructure would be repaid.

Briere said data carriers could offer incentives to customers to shift their activity to off-peak times much as voice carriers provided nighttime discounts to reduce peak demand. Such a maneuver would reduce capital expenditures spending by long-haul and metro carriers by about $250 billion over a five-year period, according to the TeleChoice report.

--Glenn Bischoff, senior news writer