SAN FRANCISCO (CBS.MW) — Like that annoying kid who kept asking, “are we there yet?” when it comes to broadband, the answer is an emphatic “no!”
Despite the claims of Baby Bells, true broadband nirvana still remains elusive for Americans.
The Federal Communications Commission defines broadband as any connection that can either download or upload data at speeds exceeding 200 kilobytes per second. Occasionally cable company Internet subscribers get speeds in excess of one megabit per second.
Yet if you are one of the 35 million broadband subscribers in this country who use the digital subscriber line technology (DSL) to get online, your best experience is about 384 kilobits per second — about seven times a dial-up connection — on average. You pay about $50 a month and most often, you use broadband for three things — surfing the Internet, downloading e-mail, and if you are ethically challenged, downloading music.
Technically it is broadband as defined by FCC. But in reality what you are buying is a fractionally better experience than the dial-up service that the majority have been stuck in.
If a movies-on-demand service over the Internet became a reality today, it would take almost 15 hours to download a DVD quality movie with a consumer DSL connection.
Downloading an album from one of the many online music stores would take around 30 minutes. (In the highest quality mp3 format, one CD is equal to about 100 megabytes)
Now compare this with South Korea and Japan — where about $25 a month will get you a blazing fast high-speed connection that downloads web pages at speeds ranging from one to about 12 megabits per second. The music album download would take less than 60 seconds, and downloading a movie would take less time than half a spin cycle on your washing machine.
Now that is fast and that is true broadband. It’s one of the reasons why the Internet adoption in South Korea and Japan is growing at breakneck speed. In June 2003 alone 451,000 new Japanese signed on for the broadband service, bringing the total up to 10.93 million. The Japanese Telecommunications Ministry has predicted that by 2007 nearly 60 million Japanese, about half the country’s population will be connecting to the Internet using mega-speed connections. In South Korea, the penetration is already at 70 percent and higher.
In comparison, in the quarter ending June 30, 2003, about 700,000 odd new broadband subscribers signed up with various access providers including cable and DSL services. The Baby Bells — SBC Communications (SBC: news, chart, profile) , Qwest (Q: news, chart, profile) , Verizon (VZ: news, chart, profile) , and BellSouth (BLS: news, chart, profile) — cannot stop gloating over hundreds of thousands of customers who are signing up for their DSL services.
Some might be impressed, but the broadband access providers, especially the phone companies peddling DSL connections should do more to get more people signing up for their service. And they can start by offering higher speed offerings.
Today the technology to provide DSL services has become so cheap that Baby Bells can easily offer mega-speed connections. These connections, which exceed 10 megabits per second, can allow the Bells to finally offer triple play services, i.e. they can offer video, voice and data services over the thin copper wires.
It would be an effective way to ward off competition from the cable companies, which had been so far content with offering video and Internet access. More recently they have moved into voice services quite aggressively.
The improvements in voice over Internet technologies have made it possible for cable companies such as Comcast (CMCSK: news, chart, profile) and Charter Communications (CHTR: news, chart, profile) to offer phone service to their customers.
As a result cable companies can increase their total revenue per customer from $50 a month for just video services to about $100 for the “triple play” services. Phone companies run the risk of losing customers to cable companies. And they are.
However, fatter pipes and faster connections can help Bells reverse that trend and in fact increase their revenues in the process. Phone companies across the world have caught on to this and are busy upgrading their networks to capture the “triple play” customers. Canadians and the United Kingdom are the latest to embrace the future. In the U.S. however, the Bells are dragging their feet, and need to get moving quickly.