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Reality check – Americans like their broadband service

By 23 June 2010 No Comment

Silicon Valley types are so infatuated with big broadband and they just can’t understand why more than 70% of Americans are happy with their existing broadband service.  The usual knee jerk explanation for this is that there are no applications driving consumer demand because broadband is too slow to allow for higher bandwidth applications, but it completely ignores the reality that it’s applications that lag broadband.

With over 40 million broadband homes since 2008 with more than 6 Mbps of connectivity, one would expect that there would be more applications that require and thrive at 6 Mbps.  There are such applications, but they either involve 99% piracy or they involve premium services where consumers have to pay additional fees to the content provider.  Even the free P2P services are generally limited to the upload performance of volunteer seeders which is often lacking, so a typical tactic of file sharing sites is to advertise on P2P search sites offering faster downloads that might guarantee 3-6 Mbps at $10/month.  The higher bandwidth applications do exist, but even the promise of faster piracy isn’t enough to overcome the price sensitivity of most consumers.

Google’s YouTube service is the closest they comes to a high bandwidth application where the highest bandwidth content weighs in at 3.75 Mbps for over-compressed 1080p, but the vast majority of YouTube content is limited to 330 Kbps “360p” or 660 Kbps “480p”.  But even the 3.75 Mbps content barely pushes the capability of 40 million American homes.  Consumers in Japan face an even greater disparity between broadband capability and application performance.  What is the point of buying 100 Mbps broadband service when even the premium fee-based content sites only offer 4 Mbps content and free video sites only offer 1 Mbps content?

The fact is that broadband is simply another commodity.  Even though the costs are rapidly declining, the cost is and will always be non-zero and will therefore act as a limiting factor for application bandwidth.  The bigger problem for the Internet elite geek culture is their knee jerk assumption that bigger bandwidth automatically equals more innovation, but the reality is that throwing bandwidth at the problem is rarely the solution.  It’s quite possible that future innovations lie in lower bandwidth but more intelligent end points.  If we could motion capture and render Avatar-like graphics with common end-user equipment, it would make high bandwidth camera-based video conferencing technologies obsolete.

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