How Do We Fix Crappy U.S. Broadband?

According to a recent study, broadband access in the U.S. has dropped to 19th place worldwide. The recent passage of the stimulus bill will provide about $7 billion to improve it. But why is U.S. broadband so crappy in the first place? And can government intervention improve it?

For a little insight, I sat down with Emily Green, CEO of the Yankee Group, a Boston-based consultancy that specializes in connectivity. They advise network providers, manufacturers, media companies and financial services companies, and also specializes in helping those companies deal with public regulations.

The Yankee Group recently wrote an open letter to President Obama about the need for an "anywhere" network. In it, it argues that a Federally-motivated expansion of wired and wireless communications is one of the most vital components of economic recovery, community service, and improved health care and education.

Is broadband access in the U.S. really that bad?

There was a note in The New York Times the other day that sent me around the bend. There was a convocation of broadband industry folks a few days ago, and they came out and said that if you looked at the right metrics, the U.S. is actually number one in broadband access. Anyone who says that is engaging with delusional metrics. For a country that's as advanced as we are, and has provided so much leadership in the commercialization of the Internet, our deployment of broadband technology is pathetic and embarrassing.

What's the problem?

We're not short on ideas. We're short on people's understanding of the importance of a comprehensive, seamless, high-capacity digital network. A lot of articles in the media discuss the stimlulus' "shovel-ready" projects. But we need a network that is digital-worker ready. If we had that, we could re-shore some of the jobs that are leaving the country. We are moving to a service-based economy, away from a manufacturing economy. The projects in the stimulus that will have the longest impact won't be the bridges and roads.

But to get that kind of economy, do we need the government to work with private companies? Many ISPs won't even divulge maps of their coverage to regulators.

There is great economic benefit for the whole country if we have an expansive, higher capacity network. But for these companies, holding information close to the chest is genetic; it's an attitude born of long habit. It's as if they're saying, 'I'm not sure what will create my competitive advantage, but information is power--so I'll withhold as much as possible.' It's not a very Google-era perspective.

Do they have good reason to protect that information?

This information is too critical to stay private. Here's an exact analogy: Just because many highways in the U.S. are managed by independent companies, that doesn't mean we let them withhold information about where those roads go, or which facilities are at each stop. We're at the stage now where information highways are just as important as our physical highways.

In your letter, you say we need a "public safety broadband network" for police and fire squads. Do we really need to get the Federal government involved in things like this? Can't states and municipalities hash this out, whenever the market can't?

The Federal government should be setting examples and pioneering things. What we really need is coherence, so that these networks--police, fire, emergency services--can talk to each other. The Federal government needs to come in and say, 'there's too much risk involved here. We need to provide leadership.' After they establish the model, the states and cities can refine it.

But the government can't even handle the transition from antenna TV to digital.

Delaying the DTV transition was a mistake. Any change of this magnitude is never going to go smoothly. The value of returning that white space to the American people is huge; that space could be one of the vehicles for improving broadband access across the country, and I think that's a lot more important than television programming. Broadband access is correlated to economic benefit in a way that TV is not.

Some studies have shown that rural residents without broadband express very little interest in getting high-speed Internet.

I understand there are people who don't think they need it. There are also people that think they don't need to exercise or drink milk. We shouldn't let that make us self-satisfied about where we are in terms of connectivity.

Curricula in schools are devised by people given the authority to decide what's best for our children. We should be mandating connectivity and skills development too. Luckily, the stimulus package has funding for access points in communities and educational programs for broadband usage.

You say in your letter that the government should create some "initial applications" for the new white space being vacated by the broadcast TV stations, so serve as examples to private companies. Can't we just let the market do its work? Won't Microsoft and Google build on that white space anyway?

The government needs to show some real leadership by moving its activities--health, education--onto an anywhere network. The reason networks are so efficient is that they diminish the relevance of your physical location; for example, you don't have to drive down to the DMV if you can do everything online. If the government can challenge itself to move its governance online, that commitment will help our whole economy move onto the network.

The letter to President Obama talks about building public housing with fiber optic connectivity. How do we mandate things like this and make sure that we're using the right technology? Is fiber, for example, definitely the best?

It's not the only vehicle--you can get broadband over cable, telephone, power lines--but it's the best technology we have today. When the government builds public housing, there are requirements for things like green space. Why shouldn't there be requirements for letting inhabitants participate in an anywhere network? This funding should be technology agnostic, but there are technologies out there today that we should be using. 

Like femtocells?

Femtocells dramatically increase connectivity in an economical way; it's an extremely exciting technology that could expand the reach of wireless technology. One of the biggest costs for network providers is mounting equipment around a city. These operators are very excited about people using femtocells, but they're still trying to figure out how the business model works. They'll be great for schools and hospitals.

Does Obama understand the need for an "anywhere" network?

He certainly was great during the campaign about promulgating broadband for all, but less than 1% of the stimulus package is for broadband. Maybe we don't know how to use any more than 1% responsibly at this point. But over the next eight years, we need to tip the balance in favor of service economy investment.

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10 Comments

  • James Nicklas

    It really seems like just a matter of time before some serious solutions arise in regards to a better internet backbone or network.

    <h4>Rural Internet</h4>

  • Emily Green

    Hey, Jonathan. Agree that broadband is getting better if you look at growth in adoption. Regarding what's standing in the way of the US broadband experience, I'd identify four things, two on the consumer side and two on the provider side:
    1) Cost to consumer. Broadband hasn't come down much in price since it first came out in the '90s; meanwhile computers, phones, long-distance voice, and lots of other things have gotten proportionally less expensive.
    2) Impediments to sampling the experience. When cable modems first came out, many new users had an 'aha!' moment when they realized what an always-on experience was like. I have to think there are still people out there who still haven't had the experience.
    3) Provider risk on further build-out. I do think the specter of regulation, which could affect what a provider can do with network capacity, is an inhibitor to further investment. If/when there is more clarity on the so-called net neutrality topic, it could loosen the wallets of current providers if they feel they won't have their new network capacity hi-jacked.
    4) Lack of a national broadband policy (NBP). The US needs a coherent, consistent approach that would unify the various scattershot policies and rulings and would address some holes in current broadband regulation. I think the new administration is aware of that, and I'm hoping with the recent emphasis on BB in the stimulus package (including the new progress reports required in May of this year and February 2010), we'll see it emerge.

    I'm sure there are other factors, like continuing to open up wireless spectrum for broadband use, but these come to the top in Yankee Group's research.

  • Jon Banks

    I read your interview and memo to President Obama with great interest and agree that there is lots to be done to move the U.S. faster and further into the broadband future. There are promising signs: broadband adoption continues to grow rapidly, and groups that had been lagging are catching up. One example, nearly 40% of rural Americans now have broadband at home, and adoption is accelerating with 25% year-over-year growth. Fiber is growing, and mobile broadband has become a major force, accounting for almost a third of new broadband connections in 2007. Comparisons to other countries are always difficult, and the OECD numbers that show the U.S. lagging behind other countries in per person broadband connections show a much better picture when corrected for the simple fact that households in the U.S. are larger than those in Europe, which means that bigger families and more people share broadband connections to the house here. Those who are interested should take a look at http://techpolicyinstitute.org....

    Better than arguing about whether the state of U.S. broadband is pathetic or not, the key to me seems to be what do we do to make it better. Carriers last year invested about $70 billion in deploying broadband infrastructure. What do you think is standing in the way of getting more people to adopt broadband and getting more and better broadband deployed.

  • Matt Keowen

    If you mean by “crappy” that the vast majority of the U.S. population is getting by with something just this side of dialup, then I totally agree, our Internet access is crappy. I don't know what the Yankee study shows, but the last OECD survey I saw listed a whole range of countries with average Internet access speeds topping 40, 50, even 100 Mbps. We should be mandating a speed requirement for the use of the stimulus dollars, not just giving people in unserved areas the same slow Internet we have in cities already. And why the focus on fiber? Sure, if you're going to pull new cable, pull fiber. But in an existing building or neighborhood, there are plenty of options for increasing speed using the current infrastructure.

  • Walker Livingston

    Something interesting- In rural Korea or Japan (I'm not quite sure which) residents are getting 1.2 gigabit internet from a satellite that interprets weather patterns so that they will always have the same speed (i.e signal stronger for places with rain, weaker for sunny places).

  • Hrishikesh Mehendale

    It is not only crappy infrastructure, but an extreme lack of competition as well. While the FCC may see 10 "broadband companies" only 1 or 2 operate in any given market. In the bay area, my only options are Comcast (who is the exclusive purveyor of cable) or ATT (who is the exclusive supplier of DSL). With at most 2 supposedly competing companies, how would broadband prices go down?

    (Someone mentioned Sweden in an earlier post - I lived there, I got 10 Mbps up and down [Comcast basic is 6Mbps down / 512k up] for SEK 250, which is about US$ 30 per month including taxes (Comcast graciously gives me a discount from 50$ before tax to 33$ before tax, and BitTorrent kills the connection pretty fast)

  • j T

    Internet is slow for the exact same reason there isn't a national high-speed train system. It all comes down to return on investment. In a country like Japan where the population per square mile is significantly above what we have, it is much easier for a service provider to plow in a fibre and expect a few thousand subscribers in that area. Contrast this with a service provider here having to plow in a cable 25 times the distance, with worker wages 5 times higher, and only a hand full of subscribers who demand that their broadband only cost 10 bucks a month. Calculate the ROI and you have a project that no company on earth would want to venture into.

    Rural customers who expect a company to plow in a $20,000 serivice to a dozen houses are insane. Before the service provider ever made a dime it would be outdated and you would be crying for higher speed again. If people were willing to pay 500 dollars a month for rural high speed things might be different. Maybe.

    4G cellular technology is projecting 10-15Mbps wireless connections for 2011ish.

    The old saying you get what you pay for is as true as ever when it comes to internet in North America.

  • Ben Moore

    "Some studies have shown that when rural residents without broadband express very little interest in getting high-speed Internet."

    What's that mean?

  • Thompson Terry

    I'm one of those people living in a rural location w/out access to broadband (other than satellite d/l). While some studies may have shown that some rural residents "express very little interest" I can personally name several hundred residents who are very interested access. That the broadband providers can pat themselves on the back for selective sampling showing just how good they really are and that they can tout newer, faster services, but ignore huge swaths of the population to dial-up only convinces me that they are not thinking strategically. With all the supposed overcapacity that had been built up earlier in the decade, the providers were tripping over themselves and burning through serious cash flow to run multiple wires to the same locations again and again. Are they not interested in new customers or is it just a nubers game of how many times they can steal existing customers from competitors?