ISPs Say the Broadband Glass if Half Full

The US Internet Industry Association (UIIA) recently published a study (by David McClure) that paints a pretty rosy picture of broadband in the US.

Here’s a quick view of the report from the UIIA themselves in a letter to Congresswomen Pelosi:

It is a status report on how well we cover the nation’s rural areas with broadband Internet services, and I believe it will surprise you, for three reasons:

  1. Most of what we think we know about broadband deployment is based on old data, bad data or deliberate distortions of the data.
  2. We now have broadband available in at least one form for virtually every household and business in America – and we have achieved this in the shortest deployment time of any new technology in human history.

It’s not the regulation of broadband networks that needs to be a national priority, but rather solving issues that keep people from subscribing to the services that are available to them.The big point they are making is that deployment isn’t the problem – adoption is the problem. I think I remember hearing this in the 1990’s when I worked for an ISP. The problem was always take rate.

Here is their quick take on public policy:

These conclusions will have a significant impact on public policy related to broadband:
• Regulation of the Internet, from open access to network neutrality, won’t stimulate adoption of broadband.
• More and better data is needed.
• Federal programs should focus on supporting state and local efforts.
• Infrastructure investment will still be critical.
• The same needs for policy support exist in urban, suburban and rural areas.

The paper uses secondary research – so the numbers and conclusions are only as good as the data available (from the FCC, Pew, various localized programs such as ConnectKentucky and Minnesota Center for Rural Policy and Development, and others). I’ll just leave that at that.

What I think it funny is that essentially this paper is saying – we’re doing a great job with deployment. We don’t need regulation; We just need help encouraging more customers to buy.

In that respect, broadband is so unique. I don’t know if I completely agree that deployment is great but I do agree that we need to help more people realize the quality life issues that surround broadband.

A big population that isn’t online is older folks. I just watched Sky TV (cable guys) try to pitch their services to my mother in law. Yup, she’s not going there. She’s got RTE, BBC, and a couple of other stations; that’s all she needs. She likes me to look things up on the computer – but she isn’t going to be operating a computer any time soon.

All of the education/marketing in the world isn’t going to get her online – but a couple of key telemedicine services might. If she could save herself a rainy bus ride to the doctor for testing – that might be worth looking into.

Blandin FoundationWe need to get communities to buy into broadband – to offer services online, utilize existing applications, and help develop new applications. But that is a big investment. Luckily we have programs such as Blandin’s Light Speed program and the Community Broadband Resource Center to help. (Sorry I couldn’t resist the plug. I hadn’t intended to mention those programs when I started writing but they are such a good fit here.)

5 thoughts on “ISPs Say the Broadband Glass if Half Full

  1. Thank you for an intelligent read of the paper. I’m not saying that all is perfect with deployment — we still have a lot of infrastructure investment to go, especially if you believe (as I do) that the future lies in rich content that passes over a fiber network. Not soon, but inevitably, to every home.

    Meanwhile, I grow weary of the incessant attacks on network operators and the relatively scan attention paid to the 25 – 30 percent of Americans who do not go online because they still do not find the Internet relevant to their lives. Pew’s numbers.

    And I concur with your analysis — eHealth programs are thebest bet to get us further along.

    Thanks for a nice read.

    Dave

  2. Dave,

    Thanks for your comment. I think deployment is a tricky thing. For some of us there will never be enough bandwidth. For others, broadband isn’t worth the extra charge – or the cost of buying a computer. It’s tough to build a solution that will please everyone.

    While I think some providers are doing a better job than others –most of them are on the right track. As you said above and in the report – it’s not perfect but it’s moving in the right direction.

    It seems as if working with public entities is a good way to go. Municipalities (or counties or consortia) can afford to make the slow-return investment to help balance the provider need to run a business, which requires faster ROI.

    In Minnesota, I think the folks on the Iron Range are doing a good job (http://www.ircfn.org/ – web site seems down now – but hopefully that’s a glitch). The work in Vermont is fun to watch too. (http://www.ecfiber.net/)

    Thanks! Ann

  3. Ann, thanks for pointing that out. I’m glad to see Dave responded to it so quickly. I have to take issue with his comment though –

    Meanwhile, I grow weary of the incessant attacks on network operators and the relatively scan attention paid to the 25 – 30 percent of Americans who do not go online because they still do not find the Internet relevant to their lives. Pew’s numbers.

    I am tired of network owners trying to shift the responsibility for our broadband problems to people who have chosen not to use broadband. I read constantly of people and businesses in rural areas who desperately want any form of broadband – witness those Vermont towns who recently voted to build their own network.

    The rest of us has access to cable or DSL networks that seemed fast years ago but have barely scaled to offer what we need now. My large uploads when backing up photos (6-16MB per image) start at 300k per second for the first minute due to speedboost, but then get throttled down to 20kbps … meaning I have to upload overnight because it takes many hours to back up my photos. And I am one of the lucky ones on a cable network living in a large city!

    There are some communities that have solved their problem. They have invested in fast fiber networks for themselves, knowing that if they do not, they will be stuck with b-class broadband.

  4. “We now have broadband available in at least one form for virtually every household and business in America.”
    Not!
    I live 30 miles north of Minneapolis in Burns Township, Anoka County. We have no cable access, no DSL. Still dial-up. Ugh! It’s frustrating to work at home with this slow Internet connection.

  5. This report has generated lots of discussion on this and other web discussion forums. I have done lots of work with rural communities on market development and our programs have proven that with a bit of investment in training and demonstration, take rates do increase. While providers sometimes participate in these initiatives, it is amazing to me the little investment they are willing to make for their own benefit. Newspaper ads and bill inserts do not educate the consumer.

    In my economic development world, we understand that the life of the financing should be tied to the life of the asset. If you offer a manufacturer a loan for a new building and put a 5 year term on the loan, the project will not be feasible. A twenty year loan on a building makes the project work.

    FTTP networks require the same long term financing to make projects feasible, especially in rural areas no matter who the provider is, public or private sector or some combination.

    Finally, our policy makers need to realize that we need to move forward on all broadband fronts – in our cities and suburbs, in regional centers, small towns and in the countryside. The solutions may be different in each location, but we need progress on telecommunications infrastructure so that we can be globally competitive and so that technology can play an important part in solving our health care and education deficiencies.

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