Today, much of this is changing. Now the deepening of capacity is the focus. Differentiation rather than uniformity is often the strategy. This changes the nature of provision. Whereas only a few years ago, the expectation was that increased capacity would be offered by the same system, simply with bigger pipes, the emerging system is much more complex.

The first factor of change has been the liberalization of telecommunications services and the emergence of competition. This created numerous parallel conduits of bandwidth. This, in turn, accelerated the resale of capacity, and therefore led to the beginnings of capacity markets. The second factor is change in traffic patterns due to Internet usage. Telecom networks have moved beyond 2-way communications to support more sophisticated "push" distribution models, and demands for transmission vary greatly across users. The third factor is the trend towards packet networks. In a packet switched network, information can travel over multiple pathways to its destination. Instead of reserving identifiable capacity, users now contribute their transmission needs into the "cloud" of the network of networks. This resembles the pattern for electric grids -- continuous connectivity, pooled provision, and unidentifiable origin of who produced of the units actually consumed.

As production and consumption of bandwidth become more decentralized, fragmented, and unpredictable, a new market system for capacity will thus emerge. Just as modern financial institutions aggregate capital and provide for the creation and expansion of business, so will bandwidth markets evolve to provide the bandwidth required to meet the growing needs of international information industries. Market institutions will be created to establish prices and assure fulfillment between conduit providers, third-party brokers, and end users. In that market, carriers will offer capacity, as will some users. Buyers will be endusers and intermediaries such as other carriers and systems integrators. This transition to a capacity market will therefore be the next step in competition.

Today, competition in telecommunications is in the process of being achieved at the local narrowband level. The questions of interconnection, unbundling, and interoperability are being resolved, but it is not too early to look forward to the next stage. Clearly what is not emerging is a set of parallel independent delivery systems, like airlines. Instead, capacity is becoming a commodity, and many rival suppliers are each others major customers, using and rebundling each others' capacity where needed. In that environment, do rules of competition which have been conceived for a narrowband world still fit? A related question is how such markets can function in the international environment, and how they will affect the different national regulatory systems?

9:00am - 9:15am
Introduction
Keisuke Nagasaki, President & CEO, NTT America
Prof. Eli Noam, Director, CITI

9:15am - 10:45am
Panel I: Bandwidth: The New Wealth of Nations
Definition, quantifications, trends, and projections.
What is the global market for bandwidth?
How should average bandwidth be measured?
Capacity? Use? Financial value?
From Tele-density to Tele-capital

Moderator: David Lytel, President, NYSERNET

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