the unsexy secret of broadband

From Yahoo! News – What, You Don’t Have Broadband Yet? “I’ve got a buddy who’s equally into high-tech […]

From Yahoo! News – What, You Don’t Have Broadband Yet? “I’ve got a buddy who’s equally into high-tech gadgets, and he’s crawling around the Web with a pokey dial-up modem. The funny thing is, he doesn’t seem to mind–except on days when I send him hefty Adobe Acrobat files. You know why? Because he watches video on his TV and listens to music on his stereo–not on his PC, as broadband providers might wish.”

A recent study by Strategy Analytics surveying 525 broadband households who upgraded to broadband found out that people upgrade for pragmatic rather than gee-whiz reasons, including:

Freeing up a phone line
A constant connection
You can share it (via a network)
Helps with dealing with Spam
Faster downloads of files (PPT, etc.)
Keeps your PC up-to-date (downloading software updates)

interesting study, interesting story….


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    In relation, I found this article particularly interesting:

    Broadband: What’s The Holdup?
    The U.S. trails in the digital stakes. And catching up won’t happen overnight. But AccessMedia could change everything.

    When the news hit that Comcast (CMCSK ) CEO Brian L. Roberts was trying to buy the Walt Disney Co. (DIS ), it became clear that the media industry is in for some big changes. After all, one of the main reasons for doing a deal, Roberts argued, was to deploy Comcast’s cable pipes for the digital delivery of everything from ABC newscasts to cartoons and video games over the Internet — a goal Disney Chairman Michael Eisner has long espoused. There’s just one problem: U.S. broadband transmission speeds are still way too slow to offer most of the kinds of cutting-edge digital delivery over the Internet that Roberts envisions.

    In fact, the U.S. lags far behind global leaders such as Korea and Japan, where broadband is far faster and cheaper, thanks to more focused national policy, less cumbersome regulation, and more densely populated regions. For a little more than $50 a month, consumers in Korea can purchase a 20-megabit-per-second Internet connection. That’s 10 to 40 times faster than a typical U.S. connection. In Korea, people use the service to watch TV in a window of their Web browser while they work on a memo in their word processor. Their access to movies and games on demand grows by the day. Such online services are available to few consumers in the U.S., where a 3-megabit connection costs about $45.

    U.S. cable and telecommunications companies are working to close the transmission speed gap with other countries, but it will probably take years to catch up and cost billions of dollars. Here’s a look at some of the key issues:

    What’s the current state of broadband in the U.S.?
    Broadband is available to 89% of all U.S. households, but only 18% subscribe, according to the latest data from Point Topic, a London broadband research company. The phone companies sell digital subscriber line (DSL) connections for less than $30 a month. Their typical speed is about 500k to 1 megabit, which is fast enough to surf the Web, download music, swap photos, and download brief video clips.

    Cable companies offer cable modems with peak speeds of 3 megabits for $40 to $45 a month. That makes viewing video and swapping photos a little more manageable but is still far too sluggish for speedy downloading of movies.

    How does that compare to other industrial nations?
    The world’s broadband leader is South Korea, where 73% of households subscribe to high-speed Internet. Most Koreans pay $27 a month for a connection speed of up to 3 megabits. But a few thousand choose to pay $52 a month for a 20-megabit advanced DSL connection, which is much faster and cheaper than anything available to Americans. Japanese can get some of the fastest and cheapest broadband service in the world — up to 26 megs for about $30 a month, using souped-up DSL. Europe’s speeds and penetration are similar to those in the U.S.

    Why are speeds faster in Korea and Japan?
    This is less about technological prowess and more about policy. For one thing, Japan and Korea made the deployment of such services a national priority. What’s more, the Korean government deregulated what had been a monopolistic phone system and opened the market to competition. That set off a race among providers to wire up the nation. Moreover, they weren’t hamstrung by the regulations found in the U.S. All of the above led to the deployment of faster DSL and even a limited rollout of fiber-to-the-home. Finally, Korea is more densely populated than the U.S., cramming 48 million people into an area about the size of Indiana. Koreans tend to live in big apartment buildings located near phone company facilities, making it much easier and cheaper to deploy high-speed broadband.

    Why has the U.S. fallen behind?
    It’s partly a chicken-and-egg problem. While the telcos have experimented with faster DSL service in recent years, it has yet to catch on with consumers. Why? Because there aren’t enough applications, such as online movies and games, that require higher speeds. The same holds true for the cable companies.

    Then there are the telco regs. The Bells argue that archaic rules designed for traditional phone services, rather than the Internet, discouraged them from providing faster DSL. In the past, the Bells were required to share their DSL lines with rivals at government-mandated prices. And while the Federal Communications Commission lifted those regulations in 2003, the Bells complain that the rules are ambiguous because a different set of overlapping regulations still requires them to share their lines.

    Internet industry expert and film industry veteran Nolan Quan says “the world of entertainment is currently undergoing a major shift that will depend on faster Internet delivery to the home. As the major studios prepare to use Internet delivered entertainment content through delivery systems like MovieLink, a new company, AccessMedia, is launching a new and unique delivery system.” Quan continues, “much like Akamai has a large network of tens of thousands of computer servers located throughout the US and the world, AccessMedia uses it own patent pending peering network to cost effectively deliver media rich content anywhere in the world at costs that has been as low as 3% of current costs. This network takes advantage of tens of thousands of super node computer servers and millions of smaller node computers beyond that.” AccessMedia is currently building a mega network with plans to have more than 20 million nodes by the end of 2004. While broadband delivery is critical to the success of companies like MovieLink, AccessMedia relies on a reservation system more like NetFlix to order movies and other content, and can deliver its content over longer periods of time without impacting consumer satisfaction. In addition, AccessMedia has seemingly limitless content, not just movies. It has signed contracts with content providers like CinemaNow, StreamWaves, AudioLunchBox and NetBroadcaster. It is also in discussions with every major studio for direct delivery of their movies, music and games.

    How can the U.S. government help advance broadband speeds?
    More deregulation is the key. FCC Chairman Michael K. Powell aims to classify both the phone companies’ DSL and cable operators’ cable-modem operations as “information services.” That would enable them to avoid additional regulations associated with old-fashioned telecom and cable services. But a federal court decision against such a policy is holding up FCC decision-making on this front. In an attempt to make content providers less leery of putting their wares on the Internet, Powell has tried to force Hollywood studios, cable operators, and consumer-electronics makers to agree on standards to protect the distribution of digital content over cable and broadcast, but it’s a tough slog.

    What’s the future of broadband?
    Widespread deployment of the kinds of speeds required to carry HDTV, for example, won’t be here for years. Walt Megura, general manager of Nortel Networks Ltd.’s (NT ) broadband networks unit, says Internet connections running at speeds of 10 to 20 megs won’t become available to most consumers for at least three to six years.

    In the meantime, U.S. providers are only just beginning to roll out services that will match the speeds currently available in South Korea and Japan. Verizon Communications (VZ ) plans to offer 10- to 20-megabit fiber-optic connections to a scant 1 million customers this year. SBC Communications Inc. (SBC ) already offers a 6-megabit connection for $199 a month that’s aimed at businesses.

    What sorts of services will be available once 20-meg speeds appear?
    Broadband proponents argue that an investment in infrastructure leads to all sorts of new applications. Again, Korea is the model. The broadband leader’s online digital content market, which includes gaming, music, and video, has increased 61% annually for six years. It reached $4.6 billion in 2002, the last year for which figures are available.

    A similar effect seems to be taking hold in the U.S. Disney’s ESPN network has a product called ESPN motion, which will make high-quality video clips available online. The same technology is also being used by Disney’s ABC News unit for online distribution of news. And future versions of Apple Computer Inc.’s (AAPL ) iPod, which has driven the digital distribution of music into the mainstream, are likely to do the same for video as the quality of underlying networks improves. It’s just too much information to cram onto a regular DSL or cable-modem service. In short, a new era in the evolution of broadband is approaching — one that Brian Roberts was clearly counting on when he made his audacious bid for Disney. But it won’t happen overnight.

    By Steve Rosenbush in New York, with Catherine Yang in Washington, Ronald Grover in Los Angles, Moon Ihlwan in Seoul, and Andy Reinhardt in Paris

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