Why Do Interwebitube Speeds In The US Lag Other Countries And Cost More?

Published on March 14th, 2009

The Broadband Gap: Why Is Theirs Faster?

In Japan, broadband service running at 150 megabits per second (Mbps) costs $60 a month. The fastest service available now in the United States is 50 Mbps at a price of $90 to $150 a month.

In London, $9 a month buys 8 Mbps service. In New York, broadband starts at $20 per month, for 1 Mbps.

In Iceland, 83 percent of the households are connected to broadband. In the United States, the adoption rate is 59 percent.
[...]
Urban density explains much of that disparity. In most of the world, by far the most common way to deliver broadband is DSL technology that sends data over copper phone lines.[...] In the United States, phone companies could have offered a faster tier of DSL service to urban apartment dwellers. But instead they chose to offer slower speeds that they could also offer in the suburbs, where most of the more affluent customers live.
[...]
There’s another thing to keep in mind while comparing Internet speed: truth in advertising. Data from Ofcom, the British communications regulator, shows that advertising from Internet providers in the United States overstates the speed of their broadband connections less than providers in Japan and the major European countries. (See Figure 10 in this study.)

Even without any change in government policies, Internet speeds in the United States are getting faster.

This is from part one of a three part article.
Part II: The Broadband Gap: Why Is Their Broadband Cheaper?
Part III: The Broadband Gap: Why Do They Have More Fiber?

33 users responded in " Why Do Interwebitube Speeds In The US Lag Other Countries And Cost More? "

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# 1 joaoPT said, on March 14th, 2009 at 5:06 am

It’s not size that matters… it’s what you do with it…

# 2 FRAGaLOT said, on March 14th, 2009 at 6:11 am

and how over priced it is.

# 3 WiseAss said, on March 14th, 2009 at 6:14 am

Socialism FTW!!!

# 4 Max Cable said, on March 14th, 2009 at 6:20 am

A couple of reasons:

1) The US was an early adopter of the Internet. We had dial up Internet service while Europe and Asia were still using Compuserve-like services. We had cable modems and DSL while the rest of the world was still on dial-up. Latecomers to the party are able to benefit from lower cost equipment and design expertise gained from the early adopters.

2) Internet service in this country is generally offered as a “bundled” service along with the core service. In other words, cable companies offer video service as a primary product, but high speed Internet is thought of as an add-on. Product pricing reflects this -Qwest offers DSL for $19.95 on a 2 year contract, but their phone service is still about $30+ per month. Comcast basic service in my area is around $70/mo, Internet is around $50 for the standard speed tier.

3) (or 2a) Much of the last mile technology was repurposed from other uses, mostly digital video. DSL tech was developed by Bell Atlantic for their Stargazer VOD service. DOCSIS uses MPEG framing over QAM and other tech borrowed from digital cable. In the case of the fiber optic systems deployed overseas (and Verizon FiOS), the tech was still being perfected when our Internet delivery systems were being deployed, and the cost at the time was extremely prohibitive.

3) Our service is “good enough.” We generally have a good video distribution network in place, so IPTV hasn’t made much progress here (compared to Japan, which never had much of a cable network), although that is changing rapidly with services like Netflix. The majority of people online are happy with their somewhat slow service (a fact I was reminded of a few weeks ago visiting family and using 1.5Mbps DSL for a week -I thought it was terrible, they thought it was just fine). People complain about the phone and cable companies, but no one ever really wants to do much about it. Hopefully with Verizon rolling out FiOS it will get everyone moving again (Comcast is rolling out DOCSIS 3.0 nationwide this year, but AT&T is still considering 12Mbps a massive upgrade).

4) Technicians cost money. Contractors cost money. Tearing up roads is expensive and most municipalities expect that patch to be better than the road was in the first place. Attaching to power poles requires engineering and wind loading studies to be done, paid for by the attaching party. If the load will be too much for the pole, the pole will need to be replaced, again, at the cost of the attaching party. Once you’re on the pole, you have to pay rent on a per-pole, per attachment basis (attach the strand (”trunk line”), that’s one attachment. Some installer pounds a J-hook into the pole for a drop, that 2 attachments). I often hear underground construction costs quoted at about $150/ft for “normal” builds, but road bores, driveway bores and even sidewalks cause the price to increase dramatically. A pure-play ISP can’t compete on price if they have to build out a network from scratch. The government can capitalize such a project, but they can’t even get New Orleans back to normal, so I don’t have much faith they can run an ISP. And I really have a problem with the “Internet is a right!” crowd. I lived for years without a telephone and black and white OTA TV and managed to survive.

5) Local governments need their pound of flesh. Either the state PUC’s in the case of the bells, or the local franchise authorities in the case of cable companies. There is a lot of cost over and above the tax that shows up on your bill. They don’t want to see competition (except in a few places like Washington state), because they like the way things are. They get a nice chunk of tax money, we all know everyone and all the rules, and since the build out is mostly complete, they don’t have to deal with a lot of complaints from citizens about construction crews destroying lawns.

There are a million other reasons why building out networks isn’t easy or cheap. Some of the reasons are negated with wireless, but that brings on a whole new list of problems, like siteing towers, backhaul networks, and limited bandwidth. There are things that government could do to encourage build out, like waving capital gains on specific bond issues, standardizing easement and pole attachment rules, and not playing favorites with incumbent players (on all levels of government from the FCC to your town council). Wall St can help by encouraging long term (5-10 year) payback for investors instead of 20% year over year, and the time is ripe for that sort of shift.

# 5 ECA said, on March 14th, 2009 at 6:26 am

ok,
I have a friend in europe, that has 50mbps..for around $35 per month..
I also recently found an idiot in the USA that says he has 100mbps(LMAO) for around $25, no matter what we say, he says “thats what it shows on the icon, from windows.” DUH! thats your NIC stupid.

# 6 Fritze said, on March 14th, 2009 at 6:49 am

I just saw a billboard in my neighborhood advertising the new Comcast speeds, I do want the 50 down but truthfully what good does it do when I have a cap on my monthly use??

OOOh 50 d/l, ….(homer drool).

# 7 dusanmal said, on March 14th, 2009 at 7:15 am

There was an answer to a similar article on Digg from an actual ISP owner in Atlanta. Long answer but the critical point was: he saw his customers as a problem (one example, paraphrased: but if we give customers that speed a bunch of file sharing bums will use it 24/7 at highest capacity and we’ll need to increase hardware support to match it…).
Japanese are so well covered by high speed Internet because their ISPs think ahead: what will our customer need in the future. American ISPs are trying to match the already existing demand as late as they can: those pesky customers want more, arghh – now we need to work and increase our capacity. That is the bottom line problem.
Everything else (like #4 tries to portray) is consequence of thinking backward.

# 8 Winston said, on March 14th, 2009 at 7:20 am

“I do want the 50 down but truthfully what good does it do when I have a cap on my monthly use?”

Add to that that in my case at least, I am often limited more by slow site servers and not my connection speed.

# 9 Paddy-O said, on March 14th, 2009 at 7:22 am

Unless you’re streaming movies or such what re you going to do with 50 down?

# 10 SparkyOne said, on March 14th, 2009 at 7:48 am

#4 Yea, we have the idiot AT&T digging up our streets for their newest tv/internet crap while the tons of copper hang on poles over their heads. Didn’t AT&T learn anything from their longline business? Can’t they see the local loop for voice is going away? WIRELESS.

# 11 Max Cable said, on March 14th, 2009 at 8:01 am

#7 said:

“Japanese are so well covered by high speed Internet because their ISPs think ahead: what will our customer need in the future.”

ISPs in the US think ahead, too. Comcast, for example, is deploying their “fiber deep” architecture, which is basically fiber to the curb, with enough capacity in the future to bring FTTH. It’s just that when Wall St thinks quarterly, the payback has to be 18 months or less for new construction, and even less for rebuild. High speed Internet paid for the last upgrade, but there’s not enough interest from investors for the next big rebuild cycle, especially when cable companies aren’t effectively using the bandwidth they already have. The next “rebuild” will be to move the cable network to an all digital architecture in the existing network, combined with fiber deep where it is justified.

I’ve met quite a few “long term thinkers” over the years, and they are very interesting people to have lunch with. Every one of them, when I bring up some technology, will answer with “That’s great stuff, but who’s going to fix it/run it/pay for it?” Every time, without fail. When it gets cheap enough to scale, fits into existing billing systems (no minor task), and can be fixed by a high school dropout* in a snowstorm, it will be affordable.

*Don’t discount the educational level of your average tech in the states -vs- the tech in Japan. The smart kids go to college and get jobs crunching numbers on Wall St. The dumb ones work in the cable industry (myself included). This can severely limit possible network designs.

# 12 MikeN said, on March 14th, 2009 at 8:27 am

Perhaps we’d have a better situation if 10 years ago, certain people weren’t insisting that companies have to share their network with their competitors. That certainly took away the incentive to develop a network.

# 13 ECA said, on March 14th, 2009 at 8:31 am

The other problems come as:
SPEED at the other end..
Bumps in the road, going threw servers along the way and a couple are LAGGY..

Speed comes down to only a few things.
1. GAMING..
2. How many windows can you open at 1 time..
After that, its the speed of YOUR system.

Otherwise..
WE are pushing to hard..
If we make things faster, SITES will increase the graphics HIGHER, and make them HARDER to view for those slower systems.. Such as, WHAT happened to the 800×600 site design? Just because MANY have wide screens doesnt mean you have to FILL IT. I would rather have 2-3 screens showing.

The PROBLEM I see, comes with the speed of the OTHER end. Watching or streaming video, and it CANT KEEP UP. OR videos in such a LARGE format, that IT CANT keep up, and takes ALL your bandwidth for NOTHING special.
GET the other end FASTER FIRST. Look at the Cartoon network, then TRY to go to the site on saturday mornings.. I have NEVER seen a site that can handle a 1,000,000 user hit.

# 14 MikeN said, on March 14th, 2009 at 8:43 am

Yes, let’s take money from people doing janitorial jobs, or from sales of vegetables, and use that to give people free internet to download movies.

# 15 Zybch said, on March 14th, 2009 at 8:59 am

You guys just need to be glad you don’t live in Australia.

Th best deal I could get is $85/month for 8mbs ADSL1 speed and an 85gig limit per month.
However most people use the main carrier (Telstra) who charge $150 for the same speed but only 60gig, and for that you could thank our recently kicked out conservative government who sold off Telstra which was previously a public owned utility (as well as the publicly owned power, gas, and transport systems).
We now get raped every month when the bills arrive, all because some pencil-dicked politicians thought it would be easier to sell off well performing reasonably priced public assets rather than make any cutbacks to their pet projects or increase taxes a bit for the wealthy (sound familiar?).

So we have a monopolistic company like Telstra who allow other ISPs access to their network but charge them a higher wholesale price than they charge their retail customers.

We don’t even have any naked broadband services that cost less than if you just had a normal telephone line anyway. Cheapest I’ve seen is $60/month for a pathetic 7gig limit, and forget about wireless, you’d have to sell your kidneys.

You guys in the US are lucky!!

# 16 Hmeyers said, on March 14th, 2009 at 9:09 am

This whole faux debate is utterly stupid.

Europe has a much higher population density than the United States. Most of the populace is served by cities.

Distance is a major factor in internet speeds, DSL is a fine example of this.

Exactly what are consumers going to do with higher bandwidth? Watch movies? That is already near DVD quality with Nexflix, Hulu and Joost.

If the USA is so far behind, why not compare versus Canada?

You know … because we should be behind Canada if we are so far behind, right?

# 17 Usagi said, on March 14th, 2009 at 9:25 am

What good is 50M service from Comcast?! It just means you’ll hit your 250G cap sooner!

# 18 bill said, on March 14th, 2009 at 9:33 am

Wireless or Fibre! Get your cable off my property.

# 19 badcowboy said, on March 14th, 2009 at 10:05 am

One thing to note with Comcast – if you have business service, there is no cap – you pay a little more than home service, but I feel it is worth it and you get 5 static IP’s as well.

I was once talking with the people that do economic development in North Dakota – governments need to realize that high speed data is like the railroads of the late 1800’s – towns on the railroad prospered, towns that did not get railroad service floundered. The same thing will happen with countries and high speed Internet – countries that adopt and push it will prosper, countries that don’t will get left in the dust.

# 20 GregA said, on March 14th, 2009 at 12:57 pm

Paddy-O,

I find it disturbing that we agree. And everybody complaining is a bunch of whiny bitches.

Oh and that rumored japanese 100Mb, it is only available in select areas. This is just more of the fosstard-o-sphere faggot dance.

# 21 GregA said, on March 14th, 2009 at 1:06 pm

#18,

If you have the money, the phone company is more than willing to bring the DS3 right to where ever you are.

Oh, and thats not your property, you are just leasing it from the government in a forever lease arrangement. I am sorry you were mistaken and thought differently.

# 22 Paddy-O said, on March 14th, 2009 at 4:11 pm

# 20 GregA said, “I find it disturbing that we agree. And everybody complaining is a bunch of whiny bitches.”

I read the whole thread to this point and no one has said what you’d do with that much bandwidth at home. It’s very strange.

# 23 Mr. Fusion said, on March 14th, 2009 at 5:26 pm

Cow-Patty,

… no one has said what you’d do with that much bandwidth at home.

No vision.

What would have happened to medicine if we never allowed surgeons to open a body. What would have happened if roads were restricted to 10 MPH and a load limit of one ton. What would have happened if the Catholic Church still retained the final word on scientific advancement.

Maybe video is the current main user of high speed bandwidth, but we don’t know about tomorrow.

# 24 ECA said, on March 14th, 2009 at 5:30 pm

22,
WE wont ADMIT to what we would do..
the problems come from the RIAA/MPAA and a few others, TRYING to regulate something that have no control over..
AS WELL as, installing COPYRIGHT protections into TRADE agreements, that are so OUT REACHING that they make the USA look like a wimp.

# 25 Mr. Fusion said, on March 14th, 2009 at 5:34 pm

#13, ECA,

Good points. I’ve noticed more and more sites are optimizing for broadband even though there are many people without broadband.

My in-laws have cable strung 1/4 miles on either side, but can’t get the company to put it in front of their house. So they use dial-up.

Does anyone realize that Windows XP SP3 was close to a 300 MB d/l? Regular updates for Windows, Open Office, and even Firefox are mega size. A-V updates for AVG are usually in the 1-2 MB range, every day.

It becomes a disadvantage to be online if normal activities become prohibitive. And forget the idea that MS allows you to order a hard copy of SP3. That is only one. There are too many more.

# 26 Fritze said, on March 14th, 2009 at 6:09 pm

Why would I need or want 50 meg dl and 15 Up, and no cap?

Well I have 15/1.5 now and if I stream a low def movie from netflix and try to online game my online gaming suffers. 6 computers in this house and my wife uses one to work from. Now whats it going to be like if I try and stream HD movies from at least two of those computers, which netflix allows. Heck what if I try and host an online game with some friends while my wife streams a HD movie. I realize what I already have is so much better than what was offered just a few years ago, but with the larger amount of streaming content available nowadays bigger pipes just make more sense.

I am going to look at that business level service mentioned above.

# 27 ECA said, on March 15th, 2009 at 3:49 am

25,
Very true..
I remember wondering the net on dialup, and it was fine.. couldnt play many games, But Im playing those 10 year old games NOW, very well.
And watching NET displys go from 800×600 to 1024×768 is just STUPID..

# 28 Paddy-O said, on March 15th, 2009 at 6:45 am

# 26 Fritze said, “Well I have 15/1.5 now and if I stream a low def movie from netflix and try to online game my online gaming suffers.”

Finally an honest answer. So, watching yet another movie and playing children games. That’s what we need to be more productive and a reason to “catch up” up to EUs broadband rates. Yep, this is a total non-issue.

# 29 GregA said, on March 15th, 2009 at 7:20 am

#28,

From my own experience, I don’t think his problem is bandwidth as much as it is latency. It sounds to me like he has a janky router. I bet if he got the router from his cable company rather than daisy chaining a router to a cable box his issue would go away.

That is just my suspicion, but I don’t know. I know I do similar activities without issue.

# 30 Paddy-O said, on March 15th, 2009 at 7:35 am

#29 Could be. Depends on how much he is trying to stream at once to all those computers. Either way, spending money out of my pocket so that people can become even more sedentary & non-productive is BAD for the economy. Any pol who wants to do this is not that bright (either side of the aisle). Take that money and pay bonuses to inner city teachers who are demonstrably superior at their job.

# 31 gooddebate said, on March 15th, 2009 at 12:58 pm

It’s simple; nobody knows what the price really should be in other countries. I challenge someone to show me how you figure it? And its not reasonable to just tell me a number that some bureaucrat made up. What is that actual cost.

Oh, sure, the point of presenting an article like this is to say how good it is in other countries and how backward we are here in America.

Maybe another way to look at is how many resources are devoted to the task, who are they and are they good at it. So, in France how many government agencies does it take to screw in a light bulb (or give cheap internet to all). I can tell you for sure that its a lot fewer in America but it won’t be for long if you get your way ud.

# 32 soundwash said, on March 15th, 2009 at 4:07 pm

um…hello..capitalism..?

/soundwash AADD mode

we lag by design. -due to our incrementalistic class-warfare /rollout marketing model that requires something “new & improved” every 6-8 months.

(planned obsolescence comes to mind too.)

it’s how they get us to buy the same crap
over and over and over again.

look at the CD-ROM speedgame -they could have just come out with 52x burners within 2-3 iterations of the tech. instead, we spent several years going from 2x to 4x, 8, ,12, 16, 24, 36, 48, 52x. -ditto for DVD and now blue-ray.

the media is the limiting factor, usually.

-you trying to tell me they only now
figured out how to make a blue laser?
-how long before UV lasers?

-heavens forbid should they introduce the holographic storage medium that was shelved years ago before it’s *time*

no doubt this HVD terabyte medium will start
at around 30-60gb with limited speeds and they’ll start the whole cycle all over again
rather than start us off at say 3tb and 1gb/s

(omg..they’d have nothing to fuel the end of year sales bonanza..better known as christmas…) :s

if you follow PC parts/pricing, you’ll find that normally, there are 4 price drops per year, supposedly to introduce new tech. -and are typically based around intel and amd’s speed roadmaps. (that model is now starting to erode)

the ISP speedgame is quite similar.

they cant offer to beat the “competition” if everyone comes out with the max speed in just 2 or 3 steps. they have 5 “media / speed packages” of the same crap re-arranged
25 different ways to sell to 10 demographics
and half the time the one you get depends on how slick the sales person is on the other end of the phone…(someone reword that better plz)

-when i surf, i rarely ever see my netmeter
go past 4-5mbs downspeed. average is 1-3mbs
and only peaks at 4-5mb when i hit youtube/liveleak type vid links. -regular browsing just isn’t that speed intensive.

i hit 10-16mb peaks only when downloading
ISO images, podcasts and *some* vids..

i posit that everything that will be “invented” already has been invented
and nothing shall be released before its
economically “time” do so.

(i bet those who have hi-level military
Skunkworks clearance are giggling right
about now)

anyway..

bottom line: tecnically, it’s a non-issue.
we are supposedly behind speedwise only because it is politically and monetarily profitable to do so.

-s

the end-all will be the NWO-VD format:

a holographic X-ray laser player that allows 100petabyte storage, projects your current carbon footprint high above your head and sterilizes the user all at the same time..
:p

# 33 soundwash said, on March 15th, 2009 at 4:16 pm

—–
/separate, semi-related rant

what really sucks is the HD/movie madness. personally, as it stands now, whatever the format, if you cannot push your F’n movie in 800megs or less, too friggin bad.

the internet should remain first and foremost
a communication, information and technology tool. NOT a surrogate backbone to push movies and/or mind-numbing **feature length HD advertisments**

if they want to push IPTV, movies and “premium” HD content, they should be doing it over their own dedicated backbones and stay OFF our internet.

(they save a ton of money by using the net
instead of a separate backbone.

by allowing the above to feed via the internet, lawyers at the RIAA/MPAA et al now think they have the right regulate *every piece of equipment* their coveted movies travels through.

-this of course, plays well with the politicians and corporate news because they have lost the ability to *control* public political opinion, what is “news” and by extension, what we *think* due to blogging, homegrown “news” sites and everything in between.

no doubt very soon, the net will be fractured
and regulated ad nauseum in the name of national security, terrorism, copyright law, and of course the greatest political and media trump card of all: saving all the “innocent children” from pr0n (and all those bazillions of baby-eating ebildoers lurking in a chatroom near you)

the Net was great until megalomaniacal corporations and their political stooges showed up..

somehow, i get the feeling BBS’s will make a “required” comeback in the years ahead just
so we can speak our minds like we do now..

’nuff said?

-s

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