Six reasons broadband is expensive in the US and tips for reducing the cost

I want to thank the folks at WideOpen Networks for the heads up on a recent report, Why is Internet still slow and expensive in the US? It’s a quick look at six factors they have determined are keeping costs high in the United States:

1) Current providers have been granted a near monopoly.
2) There is little incentive for better service
3) Deployed technology is old and cannot be cost effectively upgraded.
4) The is no national strategy to bring true “big broadband” to our homes.
5) Broadband is actually infrastructure.
6) People do not understand true big broadband and its economic benefits.

Some of these reasons are technical, some are financial, some are political. The question is who can do what to minimize these reasons not to offer bigger, better broadband for cheaper to the point that people get better service.

Technologists

I learned at the FTTH Council meeting in Minneapolis in September that fiber is the most cost effective long term solution. So to the untrained eye it seems like it’s a matter of making the most of the technology in place until you have the money, time or incentive to go with fiber. Kind of like car repair. Now that being said, I think we’re seeing strides made here with wireless options. And the equipment for cable, wireless and fiber seems to be getting better. But if we’re looking at ubiquitous, serious broadband – it’s a matter of biding time until fiber makes sense. Building a market and demand with the technology at hand but building. There will always be a place for wireless and other options – ubiquitous fiber alone doesn’t bring mobility.

Policy Makers

Policy makers can help with 1, 4 and 5 because we’re talking about definition and vision and how they impact funding from government resources (State, USDA, tax implications). I’ve long thought it would be helpful for the policy makers to start with a map that only looks at technology and infrastructure. Maybe we need two maps – one includes privately owned legacy networks and one doesn’t. Then have some of the greatest networking mind look at the map and figure out what it would take from a purely technology perspective to get us ubiquitous broadband. Forget about costs and ownership – just what would make the most sense.

Once we have the dream network on paper – it’s a matter of looking at how to get there. To some degree I think Scott County must have gone through some process like that to decide to build their own fiber ring rather than rent. I know the prediction (back in 2007) was a $3.5 million investment for a $500,000 annual saving and I think those numbers weren’t far off the mark!

The answer may not be a public network for every community. I’m sure it wouldn’t be! Private providers have invested huge amounts and they have deployed and manage miles and miles of networks. But it just might be time to upset the legacy apple cart and see what solutions can be created with fresh eyes. Public and private partnerships get a lot of lip service – but I think each needs to lose some baggage and expectations before they come to the table. Policy makers can help that by thinking about policies that are creating baggage.

Consumers

That leaves 2 and 6. Both really focus on demand. That’s the piece of the puzzle that the regular Joe can support most easily. We need to help non-adopters get online. A recent survey by Pew indicates that most people who are offline need help getting online. So, darn it, help your grandpa get online. Or time to support an organization that will help the elderly, or recent immigrants or others who have not had a chance to experience benefits online. Because we will all experience the benefits when tax-funded services can be delivered online. We will all experience benefits when people can stay in their homes longer because they have access to telemedicine.

Support, find or develop applications that help people make use of bigger broadband. Encourage your kid to use Khan Academy, learn about precision agriculture, let your employee work from home. We need to create a case where the providers can “make it up in volume” by having more people make better use of the network. Tough to upgrade the connection for that one house on the cul-de-sac, much easier if four homes want it!

I know my suggestions are simplistic – but I think it is time that we start moving forward with plans.

This entry was posted in Building Broadband Tools, Policy, Research by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

2 thoughts on “Six reasons broadband is expensive in the US and tips for reducing the cost

  1. “Maybe we need two maps – one includes privately owned legacy networks and one doesn’t. Then have some of the greatest networking mind look at the map and figure out what it would take from a purely technology perspective to get us ubiquitous broadband. Forget about costs and ownership – just what would make the most sense. Once we have the dream network on paper – it’s a matter of looking at how to get there.”

    This is the first observation on mapping telecom infrastructure I’ve seen that makes any sense. The purpose of a map is to serve as a planning tool for completing a project, in this case ubiquitous fiber to premise infrastructure. Thus far, mapping efforts have not met this test.

  2. Thanks! Of course I agree with your agreement! I think there’s a time and place for the details but I would love to see an aspirational map from the engineers to get the conversation going.

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