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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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July 3, 2008 11:01 AM

Ugh...More Proof Just How Badly Demand For Broadband Lags

For those of us who've drunk the broadband kool-aid, it's easy to fall into the bad habit of talking about everything in terms of unlimited potential and boundless opportunity. But sometimes reality comes back and slaps us in the face.

Nowhere is this more evident than in how far the promise is from the reality when it comes to getting people to demand bigger, better, faster broadband.

Take this recent Leichtman Research Group study.

It shows that well over half of all current broadband subscribers are very satisfied with the speeds they're already getting. It's hard to convince the world we need fiber, when consumers aren't demanding more than what copper can deliver today.

Making matters worse, less than a quarter of current broadband subscribers are "very interested" in getting faster access at home. With but half the country subscribing to broadband, that means only an eighth of the US populace gives a damn about faster broadband.

And only one in ten broadband subscribers would be "very likely" to pay an additional $10 to double their speed. This gets to the heart of the broadband dilemma: if we're going to leave deployment up to a competition-driven private marketplace, how are we supposed to get more capacity in place if consumers aren't willing to pay for it?

How are we supposed to wire the country with fiber if less than 5% of people are willing to pay more for faster access?

Oh if that were end of it, but it's not as this tremendous article by Drew Clark about the most recent "Home Broadband Adoption Report 2008" from the Pew Internet & American Life Project highlights.

While there are some positive findings herein, namely that the growth in broadband adoption by older, lower to middle income, and rural Americans was strong over the last year, other indicators are worrisome, like the non-existent growth among low income and African American households.

But here's what's really troubling. 10% of America's Internet users are still on dialup, and of them nearly 20% say that nothing will convince them to move to broadband. Another 16% don't know what could get them to switch over. Add in the 2% that want someone else to pay for it and/or for it to be free, and you've got nearly 40% of dialup users seemingly not willing to move to even the most basic level of broadband let alone that which fiber can enable, and these feelings have little to do with price or availability.

The simple, overriding truth about the broadband marketplace in the US is that if we could somehow get the nation to stand together in mutual understanding about the benefits of broadband and how it can make our country great, I think you'd see private companies falling all over themselves to invest in the capacity needed to meet that demand.

But in a market that's left to rely on private competition for deployment, how can we be surprised at the lack of increasing capacity given the lack of consumer demand for faster speeds?

There's all this talk about supply, supply, supply, but I wonder what would happen if we instead focused on demand, demand, demand.

I still have reservations about whether a purely market-driven approach to deployment will ever get us to the point of a full fiber nation, but I do know that without demand the market won't have sufficient economic incentive to increase supply.

And the great thing about focusing on generating demand is that that's an issue we can all agree on. We may not see eye to eye on whether the best method for deploying broadband is public vs. private, open vs. closed, but at least we can all acknowledge and hopefully work towards achieving the common goal of opening up people's eyes as to the benefits of broadband and how through its use we can revolutionize the efficacy and opportunities of society.

By doing this, everyone wins.

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Comments (1)

Once upon a time, cars proceeded down the highway with a man waving a red flag in front of them. It was believed that if cars, or trains, went any faster than there could be disastrous consequences to the human body with the effects of the speed. And there were many who felt there were no benefits of trying to travel faster.

It took a disbelief amongst inventors etc to keep building ever faster vehicles and prove that the dissenters were wrong.

This is a similar situation in that few people can imagine the benefits of true broadband speed. Where can they see it in action? Your average Joe Bloggs doesn't have access to super fast fibre connectivity to give it a whirl.

Worse than that though is the fact that most people don't comprehend just what their PCs and current connections can, and cannot, do. Ditto their mobile phones etc.

In Korea, there are shopping channels where you can watch the TV programme, video conference with others watching the same programme, and basically multi-task at a level which is almost incomprehensible over a copper ADSL connection.

Unless we begin to educate our consumers about what is feasible, and enable them to give it a go, the demand for true broadband will inevitably proceed to rise only slowly.

For instance, Utopia have an app that shows how fibre differs from dial up etc in times taken to upload and download different files eg photos, films etc. http://www.utopianet.org/why/meter.html

Fibre bandwidth is cheaper than ADSL bandwidth so the insistence from many quarters that fibre connectivity will cost more to the consumer is a subject which needs to be broached. Not only is fibre bandwidth better value per bit, but fibre equipment is less expensive to run with its lower consumption of electricity.

These myths need to be blown apart, and it is good to see Geoff raising the issues in this blog. Keep it up!

Posted by Lindsey Annison on July 6, 2008 7:57 AM

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