Networking technology adoption : system dynamics modeling of fiber-to-the-home

Abstract

A system dynamics model is developed and run to study the adoption of fiber-to-the-home as a residential broadband technology. Communities that currently do not have broadband in the United States are modeled. This case is of particular interest to U.S. policymakers, but also relevant to other regions concerned with economic development in rural areas. The model is used to explore the effects of government policy on fiber-to-the-home deployment and on the telecommunications supply chain. The research finds that government policy relating to broadband deployment has been based on a weak understanding of the dynamics involved, resulting in trial and error policy making that has unintended consequences. The thesis shows that the current monitoring of broadband deployment by the Federal Communications Commission is inadequate to contribute to the formation of reasoned policy decisions. The model is used to explore the consequences that different regulatory scenarios have on fiber-to-the-home deployment. Among the policy choices considered are: resale of fiber-to-the-home lines to competitive providers; low cost government loans for commercial deployments; rapid deployment to all communities currently without service; and a ban on municipal deployments. The current Rural Utilities Service loan program is also included in the model and its effects are analyzed. The model is used to examine the consequences for the optoelectronics industry of different deployment scenarios. It shows that the interests of consumers, regulators, and even service providers are in conflict with the interests of the optoelectronics industry which provides a critical component necessary for the service.

(cont.) Strategies to help mitigate that conflict and to promote the health of the components industry are explored. Deployment of fiber-to-the-home is costly, and cost recovery is difficult for both incumbent and competitive service providers, especially in rural and suburban regions that do not currently have service. The interests of policy makers, service providers, and component suppliers need to be aligned to implement effective policy that encourages the deployment of broadband to unserved regions. The Federal Communications Commission needs to rearchitect its monitoring of service providers and their activities to better understand the status of deployment and how its policies can help or hinder.