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Want really fast broadband? Don’t live in the U.S

September 29, 2006

If you’ve ever been frustrated with the (non)choice between 6mpbs DSL for $45 and 6mpbs Cable for $45, you should really spend some time reading over this report by the Consumer Federation, Consumers Union, and Free Press entitled “Broadband Reality Check II”. It’s 44 pages long, but has some rather infuriating facts about broadband in the U.S. Among them:

Broadband Penetration

Penetration vs Density

Penetration Growth

Broadband Price

Speed vs Price

Cost of Triple Play

I’ve also read in several different places that the backbone speed of the internet is only increasing every year, so why don’t the consumers enjoy any of this faster connectivity? I think the answer lies in the duopoloy that the major ISPs enjoy. If there is only one other competitor in your area, then you can easily keep prices up and speeds down. And, if you can get rules passed that limit the usage of the city’s phone and cable lines, then you truly have nothing to fear from young upstarts offering faster speeds down that last mile.

I wish I knew more about the ISP business. How is it that Japan can offer 100mbmps lines for $35/month (and consider that this is actually lower priced than most U.S offers since the cost of living is that much higher in Japan), while broadband providers in the U.S oversell their 5mbps lines so much that the speed of everyone taks a dive? Does my local cable provider not have accesss to a fat enough pipe to provide up to 100mpbs or do they not invest much in upgrading their connection since their only competition is SBC offering the same speeds at the same prices? Is it really that expensive to upgrade that last mile connection? After all, if there are large pipes coming into my city (and I know there is, what with IU’s 40k students they have to have a huge pipe to connect everyone), then why is it so difficult to give more people access to that pipe? Or would it saturate the pipe so quickly that speeds would drop significantly because of the congestion?

I must say, though, that I find it even more frustrating that I can pay for shared hosting at Dreamhost for $20/month that gives visitors to my site speeds that are magnatudes faster than my home connection. True, I’m limited to 1.6 terabytes of transfer/month, but in a sense I am still paying for an internet connection, just for a computer miles from me. I would happily trade my $30/month unlimited 4mbps internet connection for a $20/month limited connection at speeds it will probably take years to achieve using my current provider.

There has to be a quicker an easier solution than either moving to Japan or waiting for my ISP to catch up with the rest of the world. If there are big, fat pipes only miles from my apartment, then how hard is it, really, to get me onto one of those? Is competition really impossible to start up with the incumbent duopolies? Is there no possible way to lay down fiber, or establish incredibly fast wireless connections?

I think that if small operations started popping up around the country offering 20mbps connection for $20 – $30/month, the big providers would have to meet the competition and start offering better deals. I remember not too long ago, my Yahoo Email account provided me with 4mb of storage. Suddenly Google mail comes along and starts offering a free account with 2gb of storage (500x the storage space!), and before you know it, my storage on Yahoo jumped from .004gb to 1gb. If a startup began offering 50mbps for $30/month, people would leave Insight so fast they would have no choice but to offer something similar or they would go under.

I think this topic deserves more research on my part, though. I have many questions and few answers. I just can’t help think that we’re getting the short end of the stick over here in the country that invented the internet. And I think something could be done about it. Just precisely what that is, I have no idea.