Friday, December 24, 2010

The post-broadband era begins

As 2010 draws to a close, we are also seeing the closure of a chapter of the early Internet era and the beginning of a new one. The first chapter opened in the early 1990s when the few people who connected to the Internet did so with narrowband "dial up" connections using the Public Switched Telephone Network (PSTN). By the end of that decade, dialup evolved from 1200 and 2400 baud connections to 56Kbs connections as well as ISDN offering Internet connections of up to 128Kbs. At the same time, "broadband" began emerging with DSL and Internet services offered by cable companies.

We are now beginning a new chapter where throughput speeds that defined an Internet connection will be less relevant than the services and applications people use when they access the Internet. If the connection can't support them, it no longer will be considered bona fide Internet-based service. From a practical standpoint, that means dialup and satellite connections are now obsolete since they cannot provide end users a full Internet experience due to the inherent physical limitations of their technologies.

Also being rendered obsolete as bandwidth demand grows exponentially, particularly with the explosion of video content and mobile Internet:

-- The U.S. Federal Communications Commission's definition of a "broadband" Internet connection as 4Mbs down and 1Mbs up.
-- The term "broadband black hole" and dubious efforts to "map" these locations. These areas will simply be regarded as disconnected from the Internet, similar to the "off the grid" term applied to those locations lacking electric power service.

Wednesday, December 22, 2010

FCC ruling heralds regulatory end of "broadband" era

The U.S. Federal Communications Commission's decision this week barring providers of fixed premises wireline Internet connectivity from selectively rationing (or blocking) bandwidth based on the source and/or content marks the regulatory beginning of the end of the "broadband" era. Whereas broadband once defined a premium telecommunications service offered at a premium price, the FCC is effectively declaring that an Internet connection is an Internet connection regardless of what information or content consumers receive from it. ISPs cannot devote greater bandwidth to some information or content (for example, their own proprietary content) while affording less bandwidth to other information or content.


This is the right decision that recognizes the Internet as a de facto common carrier telecommunications network similar in that regard to traditional voice telephone service. The large national legacy telcos and cable companies warned before the FCC adopted the ruling that it would discourage capital investment in their infrastructures, which the FCC noted early this year continue to leave an estimated 7 million U.S homes offline.

There's no evidence the business case for more network investment by the large national legacy telcos and cablecos would have been improved had the commission come down on the other side of the issue. Their business models are constrained by the need to pay their shareholders generous dividends as they have done for decades and by high labor costs to modernize and build out their plants outside of densely populated urban and suburban areas.

 
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