arrier compensation could be moved in the direction of bill-and-keep as VoIP develops, and then all regulation of voice services could be eliminated. The Future: Broadband, Content, and Vertical Integration The telecommunications sector is clearly undergoing a major transforma- tion from narrowband voice/data service to broadband service. As the price of all voice services falls dramatically to marginal cost, they become a low- cost complement to much more complex services delivered over higher- speed networks. Eventually, all information will be transformed into pack- ets for delivery over packet-switched networks. The architecture of these networks is still evolving as cable television and telephone companies adjust to the new market realities and as wireless options such as WiFi pro- liferate. These new broadband networks require large capital expenditures on fiber optics, new switching architectures, and more complex equipment on the customer's premises. Companies can no longer expect the invest- ment environment to be regulated as it was in the twentieth century, how- ever. New players will certainly emerge with new technologies, but without A Look Back and a Look Forward an assured regulated rate of return. The risk of investing in network assets will rise substantially. If the new broadband platforms are to be built and extended to a large fraction of the population, the platform owners must be persuaded that there is sufficient demand for the services they offer. This, in turn, requires that new applications ("content") be developed to drive this demand. As discussed in chapter 8, innovations in other new technologies with these "network effects" in the twentieth century were generally accompanied by vertical integration between the owners of content (or the upstream input) and the owners of the distribution system. 19 In most of these cases, the de- velopers of the new technologies were innovative entrepreneurs, such as the automobile industry's Henry Ford or cable television's John Malone. Economists no