Capital flows to where it can find the highest returns and in the broadband world, that area is internet protocol networks. As Rick Boucher, honorary chairman of the Internet Innovation Alliance shared in a recent op-ed in The Hill:
“The dramatic shift toward broadband-based networks forecasts nothing less than the end of the aging telephone network first used in the era of Alexander Graham Bell. By the end of this decade, through a carefully planned process, all consumers will have transitioned to modern high-speed broadband networks.
Most consumers — essentially anyone who has a cellphone or who gets telephone service from a cable provider — have already made this switch without government action. Drawn in significant part by 4G wireless technology offering speeds comparable to the fastest wired broadband, consumers are fleeing the old network in droves. Today, less than one-third of the country uses it at all, and only 5 percent use it exclusively. It’s rapidly wearing out. Manufacturers don’t make new equipment for it, and the costs of maintaining it are skyrocketing. It’s a network with limited service functionality. As the transition to date underscores, consumers realize how broadband-based networks offer them far more. Driven by new technological opportunities, that’s the marketplace at work.”
Consumers here in the United States are ahead of the Federal Communications Commission when it comes to the realities of the broadband and information markets. Consumers want data and content delivered quickly. They are used to the simultaneous flow of text, voice, and data over their smartphones and tablets and are not about to go back to costlier old legacy alternatives that provide way less capacity needed to provide the benefits of convergence.
Remember the days of clicking back and forth on the telephone between two people in the same conversation? Do you prefer that type of communication of yesteryear or do you like the capacity broadband enables for Google hangouts or talking to multiple people on Skype?
One example of capital seeking opportunity for high return I found way south of here in Jamaica. Maybe it’s my homesickness combined with Atlanta’s recent two-inches of snow blizzard that guided me to this Capital Networks article. The takeaway here though is that Jamaica’s information, communications, and technology infrastructure is an increasingly important asset and by description it is increasingly digital. The strategic partnership between Capital Networks, a content provider, and broadband provider Flow Jamaica resulted in innovative services for the country’s tourist industry, and all on digital networks.
Here at home, Verizon provides an example of how broadband networks, particularly wireless networks, are being leveraged to attract financing from the capital markets. In a recently issued prospectus for securities being issued to finance its buyout of Vodafone’s share of Verizon Wireless, Verizon wrote the following:
“Our strategy is to build upon the foundation and strength of our network assets as the platforms for future growth and innovation. We have a unique asset portfolio to drive continued growth and value over our networks and create an integrated experience for our customers. We are extremely well-positioned in the center of the trends that are driving growth in our industry – mobility, broadband, video, cloud services and security. Our portfolio of assets will enable us to better leverage our capabilities across the entire business.
In wireless, we completed our 4G LTE coverage build and continue to invest in our network to take advantage of the significant opportunities enabled by this technology, as we innovate around our customer solutions. We have further strengthened our portfolio of enterprise strategic services with the development of a new cloud services product suite, the launch of a mobile healthcare platform, and several targeted acquisitions which will enhance our capabilities in mobile video delivery.
We are confident in our ability to take advantage of the growth opportunities in our key strategic markets. We will continue to invest in our networks as the platforms for future growth and innovation.”
Investment is flowing to high-speed networks. If the FCC is concerned about continued innovation in the broadband markets and wants to help facilitate flows of capital to broadband providers, a thoughtfully planned by expedited IP transition trial is imperative.