Monday, December 15, 2008

Broadband for the Masses - Maybe

As a CIO in the public sector, it is in my best interest to see as many people as possible with access to the internet. It is the most cost effective way for us to deliver services to them. I am lucky that my County (Chesterfield, Va) is very affluent, and broadband is available to the majority of households. I am using Verizon FioS (fiber based) service.

Broadband has been compared to electricity in the 1930s. Not everyone has it. Everybody needs it. Those two facts are creating sort of a "class divide". In the coming decade, homes without broadband may be significantly disadvantaged. America usually ranks around 15th in the world for broadband adoption and the numbers are released every six months.

According to this Pew report in 2008 55% of Americans have a home broadband connection. I also read that 57% of Americans have access to a broadband connection. This tells me that when it is available, people tend to subscribe to it.

The good news here is that the number of households with broadband access doubled in 4 years, from 24% in 2003 to 47% in 2007. That trajectory is going to be difficult to sustain. The telecoms will always build out infrastructure in the most populous areas first.

So, a simplistic view of this is that there are two barriers to nationwide broadband:
  1. Availability - Lots of folks still can't get it. As with electricity in the 1930s, if you live in the cities you probably have it. Infrastructure cost per subscriber goes way up for the rural customer.
  2. Subscription - If folks do have it, they don't always sign up for it. Either the cost of the service, or the cost of the computer can be a barrier. Or, they just plain don't want it, preferring to be "off the grid", broadband-wise.

This article is a good example of what is wrong with the American approach to broadband build out nationwide. The Telecomm industry does not want anyone else offering the service, and takes legal action to prevent it. The FCC controls the bandwidth and cowers before the huge Telecoms and the lobbyists. Then, after a real plan is submitted, everyone says "lets wait till Obama gets in office".

And all the while, rural america and less affluent americans wait. Assuming Obama really is interested in being a change agent, he can take action to let the FCC auction (read the article) move ahead so the company in question can begin the buildout.

We shall see.

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