Why is this page text-only?

« Must-Attend Event: "Setting a High Standard for Broadband Stimulus Funding" | Main | Every State Needs A Broadband Authority Like e-NC »

May 6, 2009 11:39 AM

We Need More Users (And How The Stimulus Can Help)

Yesterday I was in Tampa, FL attending the 43rd KMB Conference where I participated in a lively roundtable discussion about a host of issues related to the stimulus, the formation of a national broadband plan, the benefits of broadband usage in healthcare and education, and what goals we should set for our country's broadband future. I'll link to the video from this discussion when it goes online next week.

But for now I wanted to touch on an interesting thought I heard while there from Rick Cimerman from the NCTA. He suggested that the stimulus should focus on creating new users over new competition.

While I've spoken out before against policies that prioritize protectionism over the public good, as that's in large part what Rick's comments are suggesting, that we shouldn't be subsidizing deployment any place the cable industry already is, there's another way of looking at this.

First let's consider how you create new users: by making broadband available to people who can't currently get it, and by getting more people subscribed to broadband.

Both of these goals are core to what the broadband stimulus wants to support. Though I don't agree with the notion we should limit subsidies to projects that only bring broadband to the unserved as I think that runs counter to the government's other goal of supporting sustainable businesses.

But I wholeheartedly support the overarching goal of getting more users online as it can result in a number of profound impacts.

At a high level there's the notion that the power/value of a network is equal to the square of the number of users connected to it. So the more users we add to the broadband-powered Internet the more exponentially powerful it becomes.

More specifically that's in large part because more users means more buyers. That reality cuts two ways, both in terms of buyers for ecommerce and online services, and buyers of broadband itself.

I'm particularly interested in the notion of having more buyers for broadband because of the impact that can have on deployment. Today only roughly 50% of households subscribe to broadband. Because of the high cost of broadband deployment and the need for robust takerates to enable sustainable businesses, this level of penetration can really only support a couple of providers. But what if we can take that penetration to 75%? That then opens up new marketshare for new competitors, which should spur deployment. Alternatively if it doesn't entice new entrants, then at least it provides more revenue to incumbents to justify upgrading their networks.

Of course, if these increases in takerates end up leading to nothing more than greater profits for incumbents without spurring them to increase their investment in capacity, then we've got a problem. But at the same time I'd hate for us to worry so much about enriching incumbents that we don't push all in on trying to enrich the country by getting more people online.

And on an individual level, I'm a believer that using broadband can improve people's lives in a whole host of ways. So the more people we get broadband available to and that we get online, the more we can help them make better lives for themselves.

Plus the final major piece of this puzzle is that the more people we have online using broadband the more we'll be encouraging innovative uses of broadband to spring up. No one person has all the ideas about what we can be doing with broadband, so I want to see us casting as wide a net as possible regarding encouraging usage as you never know what corner of the country the next big thing for broadband will come out of. It could just as easily be a shack in Podunk, IA as a loft in Manhattan.

For all these reasons and more I'm a big believer in the value of doing everything we can get to as many people online as possible. We may never be able to reach 100% penetration but we can certainly set that as a goal to strive for. And as we increase demand for broadband we'll set the stage for investment in supply to increase while simultaneously giving a boost to our digital economy by creating more customers and enabling more innovators.

Del.icio.us Digg Yahoo! My Web Seed Newsvine reddit Technorati


TrackBack URL for this entry:

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)