Analysis: When dreaming about extremely high speed broadband, or wideband as some companies are calling it, one can't help but wonder how soon we'll see these speeds. Verizon and Comcast both have plans to offer 50Mb/s (or greater) download speeds, but what does this imply for the service providers? How soon will we actually get access to these faster connections?
Faster Internet is not just about download speeds for videos and other media. Faster pipes equates to more high definition video and better Web-based services as well. Google Docs and other online storage mediums are just the beginnings of Web services that will require extreme bandwidth—ask Netflix.
Small to medium businesses, too, benefit from faster consumer broadband. Many of them simply buy the "business class" services from the same provider that serves their homes, and it usually works out fairly well. It's cheap, more reliable than home service, and a technician can be reached much quicker for business customers. These businesses also don't normally host their own Web sites or remote access mechanisms. With new extremely high speed Internet access, it is possible for companies to reduce hosting costs and even offer more convenient remote access methods.
The technology is here today. Cable customers can take advantage of DOCSIS 3.0, a technology that can support speeds up to 160 Mb/s. Verizon's FiOS service is fiber, which means its capable of running Ethernet at whatever speed the network interfaces on each end support.
Currently, both providers offer 50 Mb/s service (download) with upload speeds ranging from 5 to 10 Mb/s. Unfortunately, they likely don't offer it in your area. Comcast recently started its pilot DOCSIS 3.0 service in Minneapolis, MN. Priced at $150/month for 50 Mb/s down and 5 Mb/s up, Comcast is at least competitive with Verizon's FiOS.
Verizon, on the other hand, has been aggressively selling and installing its FiOS service. The problem with FiOS is that it requires a fiber run to your home, hence the name Fiber to the Premise (FTTP). Rollout, obviously, is going to be slow. If it can swing a nationwide fiber install, Verizon will be positioned to scale its services much better than a provider based on copper cable technology. It already offers TV service, and if the fiber market penetration is successful, Verizon could be a major cable competitor for all your telecommunications needs.
FiOS isn't available in many places at the moment, and higher speed cable is in its infancy. When cable providers pull the trigger, however, they can quickly roll out 50Mb/s service to all their markets. Verizon's FiOS still requires that infrastructure be laid.
The US is, surprisingly, lagging behind in the Internet access race. The popular Nielsen NetRatings report (152k PDF) released in 2004 showed that roughly 75 percent of the US had Internet access; yet only 50 percent has broadband access. To make matters worse, the US' broadband is far slower than broadband in many other countries. A telecom law firm, eNC, recently released a broadband availability report detailing just how bad our access is, comparatively.
The report recommends that 100 Mb/s service be available to US consumers by the year 2012. While that may seem aggressive to that majority of broadband customers who are currently stuck with 8 Mb/s, the report puts it into perspective. In Japan, 85 percent of households have access to fiber and 100 Mb/s service costs about a fourth the price Americans pay for 8 Mb/s service. In fact, the US ranks 14th among other countries with broadband access when it comes to available speeds.
Crippling the Pipes
Since 2005, we've been hearing the big Internet service providers screaming about the 10GbE (10 Gigabit Ethernet) limitation. They end up using wave-division multiplexing or aggregating multiple fiber links together to enable greater speeds. That, unfortunately, only scales as far as the number of fiber strands an ISP can get a hold of. The technology is not keeping up with the demand; they need faster network interfaces. If consumers get access to 50Mb/s connections, the situation only worsens.
Comcast has been talking about its testing of 100GbE links, even though the standard is not yet complete. Comcast has greater plans than just high speed Internet; it claims to want to ship over 1,000 high definition TV channels.
It's not uncommon for pre-specification products to be released; just look at 802.11n—that gear was available from Apple long before the specification was released. This is good news for service providers. It means 100GbE interfaces will be available to everyone soon. It's also good news for consumers, as it implies that service providers will be able to support higher bandwidth connections. If you think about it, the bump in capabilities is roughly equal: an order of magnitude. DOCSIS 3.0 brings cable's maximum of 16 Mb/s up to 160 Mb/s at roughly the same time GbE gets a much-needed 10-fold bump as well.
Back to the eNC report, we begin to realize that faster Internet access should, and potentially could, be available in the US. It is unlikely that all major US cities will have access to 100 Mb/s connections within just four short years, but it's not completely unbelievable.
The bad news is that the prices are not likely to drop. If Comcast and other cable providers can quickly roll out 50 Mb/s service, they will likely price their service higher than Verizon's FiOS, because they can. FiOS isn't available in many areas, and while a high price tag on 50 Mb/s cable will be a barrier to some, other are willing to pay. Early announcements from Comcast cite $150/month for the service. Since there are no major competitors, the price will remain high. Hopefully Verizon continues aggressively installing fiber to homes.
The moral of the story? Move to Japan.