FCC Commissioner Michael J. Copps – 11/8/06:
The United States is 15th in the world in broadband penetration, according to the International Telecommunication Union (ITU). When the ITU measured a broader “digital opportunity” index (considering price and other factors) we were 21st — right after Estonia. Asian and European customers get home connections of 25 to 100 megabits per second (fast enough to stream high-definition video). Here, we pay almost twice as much for connections that are one-twentieth the speed.
How have we fallen so far behind? Through lack of competition. As the Congressional Research Service puts it, U.S. consumers face a “cable and telephone broadband duopoly.” And that’s more like a best-case scenario: Many households are hostage to a single broadband provider, and nearly one-tenth have no broadband provider at all.
And it’s actually much worse. We don’t even have access to real broadband when you compare our access to the rest of the world…
Asian and European customers get home connections of 25 to 100 megabits per second (fast enough to stream high-definition video). Here, we pay almost twice as much for connections that are one-twentieth the speed.
The FCC still defines broadband as 200 kilobits per second, assumes that if one person in a Zip code area has access to broadband then everyone does and fails to gather any data on pricing.
John wrote about this problem in his PC Magazine column. His theory is that telephony and cable TV based ISPs have strong financial incentives to keep broadband expensive and slow.
Let’s face the simple reality of things: The phone company is in the business of telephony first. That’s why it’s called a phone company. Everyone knows that someday telephony will be free, but what’s the rush? There is plenty of time left to gouge and slam.
And on the other side of the table you have the cable TV folks. They are in the business of delivering TV, not Internet connections. Cable and satellite do offer a lot more programming than any OTA rig does, including HBO and other non-broadcast programming. The entry of cable and satellite providers into Internet access represents a clear conflict of interest.
It’s a conflict of interest because it is apparent to everyone worldwide that TV signals will all be distributed over IP eventually.
This also applied and still applies to the cellphone/mobile industry in the U.S….it is not only a question of interest but also a question of control.
When we’ll all be able to watch TV from around the world over IP we will see a revolution in current Network’s advertising model, looking to cater to a worldwide audience is different ball game. And again, we’ll be far behind…
Our low broadband penetration rate is likely due in part to this country being very large with it’s population spread out making it impractical to deliver widespread broadband.
Problem #2 is this government does not see broadband as an essential infrastructure for economic competitive advantage like other governments (China, Korea, etc) .
The Bush government prefers to be the world cop, squander our tax dollars in war and to rebuild nations we bomb instead of investing in this one. Does Haliburton have a sales guy that calls on the US? They certainly need one.
Policy makers pocketed the upgrade capital way back when the funds were earmarked and the current model pretty much revolves around nothing happening on this except shunting money elsewhere.
I say – congressional investigation into what providers did with those government incentives they got during the 90s to push fiber to the home. then some fraud prosecutions if they don’t get on it immediately …
#2 – I despise the moron in chief too… But Bush is not standing in the way of broadband and our government (Georgie and Ted Stevens aside) does see broadband as essential infrastructure for economic competitive advantage. The problem is the first problem you already mentioned…
We need more tubes…
“Our low broadband penetration rate is likely due in part to this country being very large with it’s population spread out making it impractical to deliver widespread broadband.”
“The problem is the first problem you already mentioned…”
That’s not even in the top ten reasons of why broadband sucks in the US. I live in a highly populated area and the only option I have is from one cable TV company.
And what exactly does population density have to do with our slow 3mbps connection versus the rest of the world’s 25 megabits?! Are you saying the reason that New York, Chicago, and LA don’t offer cheap 25 mbps connections is because of population density?! God, at least TRY to think before posting!
I would think that many of these countries had public funds used for infrastructure upgrades. Many Americans aren’t that interested, especially to the point of handing telecoms billions to run fiber to the curb. Geeky folks often forget they’re a minority. The average Joe/Jane are happy with up to 6MB claimed on their old twisted pair or coax. The future is probably wireless anyway. Why spend all that capital on glass.
#8 The future is probably wireless anyway. Why spend all that capital on glass.
Perhaps because wireless has a lower speed?
I’ve used Telstra (Australia) and Belgacom (Belgium) and I never saw anything between 25 to 100Mbs. Plus Belgacom resticts you to 10 gigs before the throttle your speed. Not to mention both of these services get knocked off just about once a week. I’ve seen faster and more relable access from Time Warner Cable in Raleigh.
I’m getting 25 to 100 Mbps on my school network. However, I rarely come across sites that actually let me download at that speed. Most sites seem to limit me to under 300-400 KBps. Occaisonally I come across sites like dl.tv, where I can download a 200 MB file in less than 30 seconds, but that’s very rare.
I don’t see any reason for the government to spend money on this. The most they should do is have the locals and states give out licenses, and not keep out competition. Broadband is not essential, and I realy don’t care if everyone else gets better speeds.
1. there are NO incentives to get anyone NEW into the party. Starting a NEW company that would take over Broadband and compete with the 2-3 corps that control it NOW, would be hazardous.
2. That fun little LAW, about taking over a Property if you could show better USE of it??
3. the infrastructure IS 10-40+ years old, the Telco’s dont WANT to improve anything unless WE/US pay for it 10 times OVER, before they touch the first relay.
4. when USA corps do something, they WONT place anything MORE then what is NEEDED at that point in time…PERIOD.. Even if there is a better/faster alternative that costs $0.10 more.
5, For SOME odd reason, a law was past long ago that SAY ” that we have the RIGHT, to purchase cable and satilite boxes insted of paying a RENTAL fee on them” and the price of such boxes even after 10 years is Artronomical $200-500 for a BOX, that isnt 1/2 as powerful as a 286xt…
6. with all the adverts spam and so forth out in the net, I find VERY few sites that can give me full speed. I dont know if this is the servers they run, or the sccess THOSE servers have, or a limit on the speed of my host. Try HP.com…that site has a burst mode that works…esp for DL.
#7 .. Who said broadband begins at 25Mbits/sec ? The article is about broadband, not 25Mbits if you read the LARGE print.
While broadband is loosely defined, it is generally accepted as data greater than the telephony rate of T1.
Hun, if you have 3Mbits, ya got broadband. You can now tell your friends.
It’s been a long time since I was in telecom but, I remember discussing how and why some areas got upgrades and others didn’t.
Believe it or not, there were and probably still remain, a ton of different variables that were considered but, sadly, two of the main issues that had to be resolved were ROI and the risk of not retaining federal subsidies. Wide dispersal of the customers could always be reconciled with a good dose of federal money, ala, the REA. Take this with a grain of salt, I wasn’t directly invovled with planning, more like an advisor on how to get it done afterwards.
There’s an excellent article on the subject comparing today’s broadband problem with early rural electrification. “Broadband is the electricity of the 21st century and much of America is being left in the dark”
Bushco, while promising to make it a priority, instead “have rewarded their corporate cronies for maintaining high prices, low speeds and lackluster innovation. Federal policies have not merely failed to correct our broadband problems, they have made them worse. Instead of encouraging competition, the FCC has allowed DSL providers and cable companies to shut out competitors by denying access to their lines.”
The parallel with electric utilities in the late 19th and early 20th centuries is striking. Public attempts (like Philadelphia providing municipal wifi today) were derided as “un-American” “Bolshevik” etc.
FDR stepped in with the REA, provided power to communities that the private companies didn’t think worth reaching and suddenly the private companies decided to reconsider: “the presence–or even threat–of competition from the public sector is one of the surest ways to secure quality service and reasonable prices from private enterprises delivering critical public services.”
The Washington Monthly article offers compelling common-sense solutions, and concludes with this:
“Without real competition or innovation, broadband deployment in the United States has stagnated. And the stakes of this misguided policy couldn’t be higher. According to the Department of Commerce, 95 percent of new jobs created will demand computer skills. And a 2001 Brookings Institution study estimated the widespread adoption of basic broadband could add $500 billion to the U.S. economy and create 1.2 million new jobs per year. Simply empowering local governments and community groups, in coordination with private entrepreneurs, to provide universal affordable, broadband may be the single best thing we can do to make America the pre-eminent economy–and democracy–of the 21st century.”
“The article is about broadband, not 25Mbits if you read the LARGE print.”
Actually, if you bothered reading the piece, one of its point is that while we’re stuck defining broadband as 200kbs the rest of the world is enjoying 25Mbits to 100Mbits
“Hun, if you have 3Mbits, ya got broadband. You can now tell your friends.”
And the rest of the world is getting 25Mbits and higher. Read the freaking editorial!
You Americans should stop complaining right now. Yes, you don’t have it as good as the people in Europe and Asia, but here in South Africa we’ve a complete monopoly over our telecommunication industry. We only very recently got access to 4Mbps ADSL connections which are extremely expensive. Plus, our total usage is hard capped at 2 or 3 gigabytes per month, unless you want to shell out about R1500 ($205) per month for unlimited bandwidth.
1. I betcha the 25-100Mbps at 1/4 the price, uncounted bandwidth, over the entire country, available to *every* home is b.s. By a long shot.
2. Do not blame the phone and cable companies. Running a company is not a suicide pact. They know that TV and Phone will be subsumed by the internet completely in the future, and until they figure out how to MATCH what they are making, they have no incentive to provide their own noose.
3. Let’s cut the corporate profit trash talk here. Even 20% profits (which is huge in most any industry) does not mean that a company is charging their customers 10 times what the actual cost is. Yes, the psuedo utilities (cable, telcos) may be making profits, but even if they gave the ALL the profits directly back to their customers, I don’t think our bills would be significantly less.
Summary: Let’s be (more) realistic about this stuff.
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#3…you dont think so??
If you consider that 1 operator, and 1 Installer/repair person PER 1000 people.. $30,000 per month?? and those 2 people dont Get That much??
Lets take off Electricity, at about 1/10th and thats $27,000
Wages for 2-3 people..$6,000, thats about $19,000
Taxes and 9/11 take off about 1/3, $6,333 is left af profit…
Lets round that off to about $6 per person profit, and mutiply that times the number of person with phones…Lets be nice and say, 200,000,000 Phones and cellphones…
Profit 1,200,000,000 average??
There is no shortage of existing technology with the built-in potential for serious broadband. Twin-pairs copper is running 20mbps in the UK fer cryin’ out loud. I watched a football match from London, he other day — and there were billboards advertising 8mbps for less than 7 pounds/month.
I live in the boonies — and have fibre-optic to the house — and Comcrap has it advertised at 6mbps max and it’s throttled to a max download of 750kbps! At $43/month. The fibre is rated at a capacity of 100mbps.
BTW — I don’t care if someone doesn’t want to use it. It’s like an abortion, Beanie — don’t buy it if you don’t want it. I still don’t like having my options limited by creep monopolies.
It will be interesting to see if the new Democratic Congress will make any headway in this regard. My thinking is that if they don’t hit the ground running in this issue in 2007, there won’t be *any* action on it until after a Democratic president is elected, and if that ball isn’t rolling by end of 2009, you can forget the whole ball of wax.
IMHO,
i would LIKE the USA gov to go out and show HOW to compete, to the USA corps.
Use the profits to PAY our nations taxes…
#22…tkane….this link is to an article cited on this blog yesterday. It’s kind of interesting, especially the part about tech issues.
http://www.wired.com/news/politics/0,72089-0.html
Moss….That 8Mbps they are touting, turns out to be as low as 2 or less, when you actually get the service. And 7 pounds a month is just the fee, then you pay by hours used, or have to buy a program similer to cell phones…..hours packages, the cheapest you will find is about 28 pounds a month, and thats in addition to the 7 pounds….meaning that you are looking at 70.00 a month U.S. dollars. When the Times of London Tech people investigated they found NO ONE actually providing 8Mbps. The sad part is, you can’t even buy better speed unless your a big business. Plus you have regular outages, and are never sure if you will be able to get online at all.
I have friends in the Netherlands and it’s even worse there. While everyone has **broadband**, it’s totally unreliable, and extreamly expensive and slow. Most companies in Europe charge a low fee plus hours of usage at a very high rate for less service than we get here from our crooks. The reasons are the same as here…..goverments that publically say broadband is very important, but then pass regulations that stifle real compition and advances.
US consumers are the sugardaddies of the retail business. Why should things get better when most people are willing to spend $50/mo for 256kbps internet. Choose with your wallet and change will follow.
Life is too fast and people want it now, no matter the cost. If you keep buying crap, the corporations will continue to offer crap.
joshua — pipex was the firm I cited — and their price for unlimited, all-inclusive, is 25 quid. That’s about $41.
Advertising 8 and giving you 2 still comes out better than Comcrap advertising 6 and giving me 3/4 of 1…
TofL Tech needs to stay up-to-date, no doubt. The competitive market in the UK is pushing prices down every week; but, British Law requires all firms to be able to lease/access infrastructure. That only happens here with land lines for telephone and dial-up.
I’d be in heaven if Earthlink (as an example) could lease the fibre-optic to my home. Especially at a competitive rate. They can’t. Comcrap didn’t install it. It came with the firms they bought — who bought the firm that originally installed it and took the write-offs our government will provide. Just not to us.
sirfelix — you either live in a dream world or a major urban center. The largest chunk of the country offers NO choices.
Here’s my question. How many of you have broadband, loosely defined? how much are you paying? It seems to me the companies have decided there are enough people paying at the current rates, that it’s not worth dropping the price to get more users. DSL on the other hand is lower, starting at $10 a month or so.
$50 3Mbps=375KBps
OK, you keep comparing EU and Brit systems..
HOW about the middle east, Canton, Japan??
Other thoughts:
When will the Cellphone corps make THEIR OWN backbone and NOT rely on Hardwire needs.
When will CABLE make a land based Backbone, ALSO.
This guy seems to have it researched:
http://tinyurl.com/ug4l9
Japan @ 52mbps for $31/month, Korea the same for $41/month, both fast enough to stream HDTV.
If you’re serious about staying in touch with IPTV news — which makes sense, since this will require the most broadband horsepower — check in with http://www.iptvdaily.com/