Friday, February 08, 2008

Are We Done With Broadband Service Growth...Is That All There Is?

A rosy report released by the National Telecommunications and Information Administration (NTIA) confidently states that the U.S. is doing great in broadband penetration because the current administration has increased penetration more than 1100 percent and 91.5 percent of zip codes have three or more competing service providers. 

I must only be familiar with the 8.5 percent of zip codes, including my own, that have zero to two providers.  I guess we can now start proudly chanting, "Were number 15!" because that is where the Organization for Economic Cooperation and Development (OECD) places the U.S. in broadband penetration.  Although initiatives like FiOS and U-Verse are increasing penetration and access speeds, they are only touching a small fraction of homes and the lack of significant competition, like on the UTOPIA network, prevents new services and lower prices from being realized by this supposed 91.5 per cent of Americans. 

Lately I have seen evidence that the U.S. broadband market is stagnating:

  1. AT&T increases prices of its DSL service to lower tiered customers by $5 per month.
  2. Comcast begins using reasonable traffic management practices which some label as intentional service degradation.
  3. Time Warner Cable experiments with capping download quantities in Beaumont, Texas where it may be conceived that they are impeding competing video delivery services.

These are not trends in a vibrant competitive market.  The NTIA and Department of Commerce should not benchmark their success on absolute numbers.  Instead they should compare the U.S. to other countries that lead the world in broadband services.  Then again this is government; whereas, business benchmarks against other similar businesses.  The FTTH Council provides a thorough analysis of broadband service in the U.S. and contrasts it to other countries.  They include policy recommendations and initiatives that the government can take to stimulate broadband service deployment and competition.

Article:  TelecomTV - TelecomTV One - News