TechNet board member calls for federal bonds to spur broadband investment

ATLANTA—

Though a supporter of the National Broadband Strategy Act scheduled for introduction this week by Sen. Joseph Lieberman, D-Conn., ANDA Networks President and CEO Charles Kenmore disagrees with one aspect.

Specifically, the bill component that would make federal funds available for the research and development of broadband technologies capable of providing 10 to 100 Mb/s transport speeds available to most Americans.

Kenmore, who also is a member of the TechNet board of directors, said the industry doesn’t need federal grants. “We don’t want to put more stress on the federal budget,” Kenmore said in an interview this morning at Supercomm 2002.

TechNet, the consortium of equipment vendors, earlier this year called for the Bush administration to set a national policy goal of 100 Mb/s transport to 100 million homes nationwide by 2010. Such an initiative, according to Kenmore, would cost about $300 billion to execute. Other estimates have been as high as $1 trillion.

To help pay for it all, Kenmore would like to see the government bring back 30-year long-term notes, similar to home mortgages backed by Fannie Mae or Freddie Mac, and make them available for the next decade. He said doing so would create a “steady flow” of liquidity that would spur investment.

“Carriers won’t build out unless they have long-term access to low-interest capital,” Kenmore said.

He added that this level of government backing would pale in comparison with the home mortgage industry, which sold $1.3 trillion in mortgages in 2002. Kenmore said the government should be looking at broadband in the same way it looked at other essential industries in past centuries.

“This should be the first major capital infrastructure program for the 21st century, much like the railroads in the time of Lincoln, and the interstate highway and telephone industries in the 20th century,” Kenmore said. “Broadband access is essential to get economic growth back to a 3% rate.”

In other news, ANDA introduced today at Supercomm an optical concentration device (OCD) that lowers capital expenditure costs for carriers by concentrating thinly loaded DSLAM facilities. Currently, according to Kenmore, these DSLAMs communicate to ATM switches via multiple T-1s. The OCD enables aggregation of remote DSLAMs on DS-3 and OC-3 pipes, which allows carriers to save on interLATA IOF charges and ATM switch costs. The typical ATM switch costs about $250,000, said Kenmore, compared with the $50,000 to $75,000 cost of an OCD.

ANDA also introduced a loop unbundling system that provides services similar to those provided by DACS, but at lower cost and in a smaller configuration, eliminating the need for deploying large DACS. The product will be targeted to incumbent carriers looking for cost effective ways of providing competitive carriers with access to the local loop. The system provides cross-connect capability for up to 96 T-1 interfaces for about $30 per port, compared to $90 per port for large DACs, according to ANDA.