The latest FCC report on the state of broadband in the US labels broadband as “scarce”. That is hardly the case. Several good things have come from the FCC this year regarding broadband. First, it was useful to announce a globally competitive target to deliver 100-Mbps services to 100 million households by 2020. This at least puts us on pace to not be last amongst the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, and United States.) for broadband access and speed. It was also good when the FCC changed the definition of broadband from a paltry 200 Kbps to 4 Mbps upstream and 1 Mbps downstream. The new definition was very important as it acknowledges the change in Internet information delivery from that of text and graphics to video and collaborative applications. Moreover, having the FCC regularly examine whether broadband access, speed and pricing targets are being met, is a good thing. However, the FCC continues to use political posturing to achieve its objectives rather than objective measure.
The report Internet Access Services: Status as of December 31, 2009 by the Industry Analysis and Technology Division Wireline Competition Bureau of the FCC does not use the word “scare”. It also acknowledges that the report does not address the “availability” of broadband rather it is a review of the “adoption” rates for broadband. This distinction is very important. As you may recall, I recently upgraded my broadband connection in order to download movies by way of either Netflix or Blockbuster. I ignored that 10 Mbps broadband was available in my area for several years until I required the faster access. Accordingly, any consumer of broadband needs a reason, compelling or otherwise, to upgrade (euphemism for “spend more”) their existing broadband. According to the report the same number of all broadband users and residential users, 3%, upgraded their service speeds beyond 200 Kbps during the second half of 2009. Clearly, there was little motivation to adopt higher speed services for either home or SMB usage. However, during the same period mobile wireless service subscribers with mobile devices and data plans for full Internet access increased by 48% or 52 million.
The FCC should avoid the scare tactics of using exaggerated language. Broadband in the US is not scarce. The FCC should focus its efforts on addressing the three legs that support the developing infrastructure for broadband deployment: Access, Speed and Price (ASP). Innovation will ultimately increase the adoption rates but the best combinations of ASP will determine the winning service providers.
See you on Monday with more thoughts and a new recipe!