More Evidence That A Lack Of Competition Is Slowing Broadband In The US

August 17, 2009

Hats off to the Obama Administration for recognizing the nation’s expanding broadband gap puts the country at a competitive disadvantage.

Obama has set aside billions to improve broadband and rules to govern the spending are set to be unveiled shortly. While the rules were initially conceived to shore up broadband in rural areas, they also may address the speed gap that has developed compared with other developed countries, such as Japan, Korea, the Netherlands and France.

That would be good news.

I don’t need to tell many of you that the United States slipped to 19th place in 2008 in terms of the speeds consumers get from their commercial providers. It was 13th in 2007. The average download speed in the U.S. is 9.6 mbps, or a tenth of what is offered in Japan.

Think of the applications you might be able to use if your broadband ran 10 times faster.

Almost a half of US consumers express interest in a cellular modem if the price is right

Almost a half of US consumers express interest in a cellular modem if the price is right

I came across another example Monday of how a lack of competition in the communications markets is hurting broadband consumers. A survey by ABI Research found that 47 percent of U.S. consumers have at least some interest in a cellular modem for their laptops.

Today, cellular modem service from a carrier such as Verizon comes with a $50 to $60 a month charge. The survey found that mass consumption would probably begin if the service cost about half the price.

“Respondents who don’t currently own cellular modems but are interested in them…place a significantly lower value – somewhere between less than $10 and $30/month – on that service,” according to an ABI Research report.

In the U.S., entrepreneurs usually line up to address business propositions when the target audiences reaches into the millions. And they work hard to lower prices when necessary. So where are they now?

The answer is on the sidelines with access to the national networks closed off. Is it time again for the country to rethink its network access policies?

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Posted by Mark Boslet

Right Wing Defenders Of US Broadband Policy Out To Lunch

July 21, 2009

I’m continually bewildered by conservatives who defend U.S. broadband policy with a laissez-faire,  hands-off-the-market, ignore-the-facts claim it is working.

Conservative laissez-faire approach ignores the facts

Conservative laissez-faire approach ignores the facts

Imagine what online services might already be available in the states (including educational ones) if our broadband connections were three to four times faster than they are today.

But if we listen to the likes of the Progress and Freedom Foundation, we may never get there in the next decade or more.

In lengthy comments filed Tuesday with the Federal Communications Commission, W. Kenneth Ferree, president of the foundation, typifies the argument. He claims U.S. broadband markets are adequately competitive and generally successful at encouraging deployment. What is he smoking?

Of course he offers no statistics to back up his claim.

And he ignores perhaps the best source of data available worldwide on broadband deployment. Here is what the Organisation for Economic Co-Operation and Development said in May:

*The U.S. in 2008 slipped to 19th place in terms of the speeds commercial providers offer users. It was 13th in 2007;
*The average download speed in the U.S. is 9.6 Mbps, or a tenth of what is offered in Japan. Other countries ahead of the U.S.: France, Finland, Netherlands and Korea.

Many of the countries providing faster connections benefited from government intervention in their markets.

With this sort of data, how can we even listen to these guys at the Progress & Freedom Foundation? They simply ignore the realities.

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Posted by Mark Boslet

Troubling Stats From Telecom With Wireless And Broadband Under Pressure

June 15, 2009

Two key growth engines of the telecommunications industry are showing signs of strain due to the great recession of 2008-09.

Wireless growth declined worldwide in the first quarter

Wireless growth declined worldwide in the first quarter

Broadband subscriptions, which up to the first quarter had continued to accelerate, were flat during the first three months of the year. What’s more, China accounted for 30 percent of the additions, suggesting the rest of the world is suffering.

On top of that, wireless subscribers to mobile services declined worldwide in the first quarter. There were 153 million new customers, 10 million fewer than the fourth quarter.

Both wireless and broadband had been bright spots in a dim economy. Now, while both grew, it is clear pressures are mounting.

It also is clear that if not for China and India, the situation would be much worse. Together China and India accounted for nearly half of the wireless subscriber growth.

In contrast, expansion in Europe slowed to a crawl and in some countries subscriptions declined.

On the broadband side, the United States was the only country other than Cbina to add more than a million subscribers in the quarter.

The world’s top 10 telecoms reported revenue of $59 billion during the period. This was down 5 percent a year earlier.

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Posted by Mark Boslet

Cisco Sees Brave New World, But Consumers May Not Be Ready

June 10, 2009

Cisco Systems is good at writing self-serving press releases.

But many of them are interesting in their own right. Wednesday’s is no exception.

The networker claims that in the next five years Internet traffic will increase by a factor of five. In other words, by 2013, net will carry an astonishing 56 exabytes of data a month, or the equivalent of 9 billion bytes of data for each of the 6 billion people on the planet today.

(An exabyte is a 1 with 18 zeros behind it.)

This is mind numbing. But the Cisco release wades even deeper into the digital morass. During the same period, mobile broadband traffic will double annually, or grow 66 times in total.

Cisco sees video becoming 90 percent of consumer Internet traffic in five years.

Cisco sees video becoming 90 percent of consumer Internet traffic in five years.

Fueling this growth of both mobile and Internet traffic is video. The release claims that 90 percent of consumer traffic by 2013 will be TV signals, video on demand, Internet video and peer-to-peer sharing.

Of course all this would be good news for Cisco, which supplies the routers and switches that carry Internet traffic.

But it implies dramatic changes in consumer behavior to go hand in hand with a substantive build out of the broadband network. This makes me skeptical. Will we really be such ardent subscribers to video in five years, and will our measly 3 Mbps home connections expand enough to support it?

I’m emotionally ready for this brave new world. I don’t think our service providers are.

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Posted by Mark Boslet

US Loses More Ground In Global Broadband Race

May 29, 2009

The United States is the world’s largest broadband market.

But the country lost considerable ground last year in the average broadband speeds its residents receive.

And the despite its affluence, the U.S. remains far from the top of the list of developed countries in the number of broadband subscribers per 100 inhabitants. With 26.7 broadband users per 100 residents, the U.S. is 15th and trails many Western European nations along with Korea and Canada. Denmark leads the world with 37.2 subscribers per 100 people.

The survey is interesting fodder for the debate that has sprung up over President Obama’s planned broadband spending initiative. With some of the leading nations having received government support, the analysis from the European based Organisation for Economic Co-Operation and Development points to their advantage.

The U.S. remains the world’s largest broadband market with 80 million subscribers, or 30 percent of those in the developed countries the OECD surveys.

But in 2007, it was 13th in the world in terms of the speeds its commercial providers offer users. Last year it slipped to 19th.

The average download speed available in the U.S. is 9.6 Mbps, or almost a tenth of what is offered in Japan, where the average speed is 92.8 Mbps. Korea, which like Japan uses a lot of optical fiber, provides an average speed of 80.8 Mbps, and countries such as France (51 Mbps), Finland (19.2 Mbps) and Netherlands (18.1 Mbps) also best the states.

The U.S. didn’t lose ground last year in broadband per capita. But that points to an interesting observation that should influence government policy makers as they allocate money to extend broadband into rural areas.

Perhaps some of the money should be used lifts speeds in communities that already have broadband since that is where the nation continues to lose ground.

The US is 19th in the world in average broadband speeds, according to th OECD

The US is 19th in the world in average broadband speeds, according to the OECD

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Posted by Mark Boslet

Broadband Showdown Coming To DC: Entrepreneurs Coudl Target Excess TV Spectrum For Broadband

April 9, 2009

The government’s broadband stimulus money is creating a showdown of sorts in Washington, D.C.

The Federal Communications Commission will channel about $7.2 billion by February 2010 to companies interested in bringing broadband connections to under-served and not-yet-served rural areas of the country.

White space spectrum being shown here between TV channels

White space spectrum being shown here between TV channels

Of course numerous companies are interested: many established firms from the cable, telco and consumer electronics industries.

Perhaps the most contentious part of the plan has to do with the wireless spectrum to be made available by the switch to digital from analog television broadcasting. The release of the new spectrum could bring entrepreneurs into the picture – and more competition to the broadband business.

The change has freed up the unused white space spectrum (54 MHz to 698 MHz) previously used for over-air television signals. Congress set a June date for the release of the swath.

“The decision to open up new spectrum is one of the most contentious the FCC has ever made,” says ABI Research vice president Stan Schatt. “It’s the equivalent of the government opening up a previously untapped oilfield.”

That’s because signals at this wavelength can pass through features such as hills and forests – making the spectrum more valuable.

Service provider startups might see this spectrum as an opportunity to compete, especially in rural areas where there is a lot of white space available. And they might be able to tap into the $7.2 billion of funding waiting to be spent.

The broadcast industry is opposed to the white-spaces plan, concerned a generation of new devices will cause interference. Chip makers, device manufacturers and consumer-electronics companies are in favor, says ABI.

Opening up the white space would be just what the broadband business needs: more competition.

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Posted by Mark Boslet

Feds Still Trying To Figure Out How To Spend Broadband Funds

March 10, 2009

How the broadband boost promised by the Obama Administration takes shape is still a vaguely defined work in progress.

FCC Chair Michael Copps is seeking public imput on where to spend broadband billions

FCC Chair Michael Copps is seeking public imput on where to spend broadband billions

The government plans to spend $7.2 billion to enhance broadband networks across the country and primarily in rural areas. On Tuesday, it kicked off its efforts by saying the money, contained in the economic stimulus bill, will be spent by October 2010.

But it acknowledged it has not decided how to define “underserved” and un-served” communities, those slated to receive the funds.

With the U.S. facing a two-pronged broadband deficit that dramatically worsened under the Bush Administration, the question is a complicated one. First of all, many rural communities in the U.S. don’t have broadband access.

Secondly, communities that do – rural or not – pay higher prices for slower speeds than many leading developed countries around the world, including Japan, Korea and France.

I have hoped that the government’s fund would address both issues. But it was unclear from Tuesday’s briefing whether this would be the case.

Here are excerpts from the stimulus bill that will guide policy makers: “1) provide broadband service to unserved areas of the United States: (2) improved broadband service to underserved U.S. areas;…(5) stimulate the demand for broadband, economic growth, and job creation.

“Provides for related grants to be used, among other things, to: (1) acquire equipment, networking capability, hardware and software, and infrastructure for broadband services; and (2) construct and deploy broadband infrastructure.”

I hope the Federal Communications Commission view its role in the broadest terms possible, addressing the speed deficit as well as rural access.

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Posted by Mark Boslet

Comcast Unleashes 50Mbps Broadband In Silicon Valley

March 5, 2009

Comcast said it is rolling out new higher speed Internet connections starting in the Silicon Valley-San Francisco area and nearby Monterey County.

Cable giants faster broadband battles fiber optics from Verizon and AT&T

Cable giant's faster broadband battles fiber optics from Verizon and AT&T

The two new tiers of service will increase downstream speeds to 50 megabits a second – an effort by the cable giant to compete against the fiber-optic service Verizon and AT&T are delivering to regions of the country.

Comcast said its Extreme 50 will offer up to 50 Mbps of downstream speed and up to 10 Mbps of upstream speed at $139.95/month. The Ultra service will provide up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed for $62.95/month.

The company claims with Extreme 50,  customer will be able to download a standard-definition movie in five minutes.

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Posted by Mark Boslet

IBM Pushes Ahead With Broadband Over Power Lines

February 19, 2009

IBM said it has begun using electrical wires to deliver broadband access to about 200,000 homeowners in rural Alabama, Indiana, Michigan and Virginia.

Effort targets rural electrical co-ops

Effort targets rural electrical co-ops

Big Blue, which is working with the power line Internet service provider International Broadband Electric Communications, said it hopes to expand the program to more of the 45 percent of Americans who don’t have broadband today.

IBEC has received low-interest loans from the U.S. Department of Agriculture Rural Development Program. IBM will provide technical expertise, project management services and training for installation crews.

According to a press release, here is how it works: “Broadband over power line technology modifies radio signals to transmit voice and Internet data over electric utility power lines. All a consumer needs is a modem that plugs into existing electrical outlets in their home or business.”

IBM and IBEC have targeted member-owned electric utility co-ops for the construction of their Internet over power line networks. IBM did not say what speeds its expects to achieve.

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Posted by Mark Boslet

Broadband Sign-Ups To Grow In 2009 Despite Economy

February 4, 2009

The number of broadband subscribers should continue to grow this year, despite the pullback in consumer spending that has hit retail, computer and cell phone sales.

DSL to see most of the growth

DSL to see most of the growth

Subscriber growth should amount to 7 percent each year through 2014, said ABI Research.

Connections using DSL are likely to see the lion’s share of the growth as telecommunications carriers piggyback the data flow on their existing infrastructures to keep prices stable and affordable.

But DSL is starting to meet with saturation in some developed markets as consumers begin to favor faster options using optical fiber cable. In the advanced markets of Denmark, South Korea and Japan, DSL is seeing a decline in growth rates, ABI said.

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Posted by Mark Boslet

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