After several years of competitive jostling over high-speed Internet subscribers, the race for last-mile communications links to consumers and small businesses is again heating up - and taking on new dimensions. While today broadband is mainly a means for delivering Internet access, in the coming years broadband will become the backbone for delivering interactive audio and video entertainment programming, as well as voice telecommunications. The ultimate prize in this competition is the monthly subscriber fee for these basic services - and the opportunity to capitalize on any advanced services that will emerge in the future. But the ultimate winner is by no means obvious. Cable television operators, local telephone companies, and possibly a new generation of service providers using wireless technologies are all likely candidates to capitalize on broadband's potential.

Collectively, triple-play markets are immense. Fixed-line telecommunications is a $200 billion market, and video services exceed $50 billion in sales annually. Internet access is roughly $20 billion and growing. The race is on to obtain a greater share of these markets and, at the moment, cable appears to have a head start. Many cable operators are already offering the "triple play" of services - television, telephone, and Internet access - all in one bundle over a common infrastructure. Cable operators also have been more successful than their telephone-based digital subscriber line (DSL) competitors in gaining customers of their broadband Internet services. As of late 2003, cable operators had 15 million high-speed Internet subscribers, according to the National Cable & Telecommunications Association (NCTA), versus the 8.24 million U.S. DSL subscribers reported by the industry group DSL Forum.

In cooperation with direct broadcast satellite (DBS) operators, local telephone companies can currently offer consumers a triple-play marketing bundle, but they are not using a common infrastructure to deliver services. To remedy this disadvantage, carriers are examining the viability of extending the reach of fiber within their networks. In fact, three of the largest local carriers announced the creation of common standards for an optical fiber platform for consumer broadband services. In May 2003, BellSouth, SBC, and Verizon announced that they had agreed on technical standards for equipment.

But how much bandwidth do consumers really need, and how does each broadband technology satisfy these needs? Growing thirst for bandwidth and expanding technical requirements to simultaneously deliver multichannel television, Internet, and voice traffic demand a wide broadband "pipe" and may sometime soon overwhelm existing cable and DSL platforms. Fiber is able to deliver significant bandwidth, but it may prove too expensive to deploy in most regions. Next-generation fixed and mobile wireless technologies may have infrastructure cost advantages but face a daunting challenge in convincing network operators and consumers to switch to these relatively unproven technologies. This report examines the technical capabilities, infrastructure costs, and tradeoffs of the leading candidates in tomorrow's broadband marketplace.