Wednesday, March 05, 2008

U.S. broadband forecasts sweep pathetic state of access under the rug

A couple of reports are out this week that would lead their readers to believe that U.S. broadband access and speeds are “exploding” as one tech press account put it. Or about to.

Don’t believe it. It’s essentially telco/cable duopoly propaganda designed to make the number of people who have access to advanced services appear to be large and growing fast. The apparent goal is to sweep under the rug the ugly reality that very large numbers of Americans are still accessing the Internet the same way they did when a young former Arkansas governor named Bill Clinton was assuming the presidency and are likely to do so for some time. Only now, some have option of using satellite, a crippled and costly alternative that’s not much better than dialup and doesn’t provide true broadband connectivity.

One of these reports was issued this week by research firm Parks Associates. It projects by 2012, close to 33 million U.S. households will have broadband services with speeds of 10 Mbps or higher, capable of streaming high-definition video. The U.S. Census Bureau projects there will be about 177 million households by 2012, meaning many folks won’t. “If high-bandwidth broadband services fail to reach mass-market consumers, the United States may lose its competitive edge in the next round of technology innovation,” the report warns. "Such a scenario would be unpleasant.” Based on these numbers, it appears the U.S. is in for a lot of broadband unpleasantness.

Also this week, another research outfit projected that by 2011, of those who can get service at this speed, more than 9 million U.S. households will subscribe to telco-provided Internet Protocol TV service. The Yankee Group’s report, From Gorillas to Guerrillas, IPTV Changes Everything, sharply departs from reality in suggesting that IPTV technology will change the stodgy, accounting and lobbying driven Bell System culture that still rules telcos.

“IPTV will also forever transform how telcos operate,” Yankee Group declares in a bout of apparent wishful thinking. “It will take the service providers from being highly centralized, giant corporations to become decentralized, flexible entities that can respond much more rapidly to the specific needs of the communities they serve. The phone company of the past—the 800-pound gorilla—is dead. IPTV will transform telcos from the market-dominating gorillas they once were, to street fighting guerrillas."

That assessment is so out of touch it’s laughable. The telcos and especially the dominant player, AT&T, behave like arrogant, aloof government bureaucracies, not unlike the old Soviet phone company where customers had to wait five years just to get phone service. Consider the many folks who are stuck with POTS-based dial up that AT&T has been telling for years "We'll get to you when we get to you" and "Maybe and that's final" when they've asked (and often begged) for advanced services. They don't even have DSL let alone IPTV and aren't likely to see the latter for many more years — all the while relegated to early 1990s era dialup and satellite. And forget about the myth this problem is confined to rural areas; there are plenty of folks within metro areas who are still on dialup.

To suggest the entrenched, centralized, top-down telco culture can change in just two years' time to a "guerrilla marketing" culture simply defies common sense. It will likely take at least a decade and likely far longer. Only a major external event like another government ordered divestiture would likely alter that timetable.

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