Monday, January 11, 2010

Broadband is Flattening

An article this morning titled Broadband sign-ups to decline 10% in 2010 points out that cable is still winning the broadband war over DSL and that new broadband user signups are slowing down.

"Approximately 4 million U.S. households will become new high-speed Internet customers this year, marking a 10% decline in subscriber growth compared to 2009, according to a new forecast by market research provider Pike & Fischer (P&F)".

"The total number of broadband-connected homes will exceed 77 million by the end of the year, representing about 65% of all U.S. households, P&F says in its new report, "Broadband Competition Outlook 2010.""

The article doesn't point out that we have just about saturated the section of the US that has a computer and wants broadband. NetZero, EarthLink and many ISP's are still making good cash on dial-up -- and ISP's have been unable to convert these users to broadband. Why? Some may not see the value in broadband. Likely, some can't get similarly priced broadband. Just as likely some don't want to be married to their computers since they have a life. If you can't convert dial-up to broadband (which would likely be the next sector to look for growth), what do you do with the one-third of the US population without a computer?

The issue facing the FCC and all ISP's (including the Duopoly) is to achieve growth they have to extend their broadband pipes to underserved and unserved WITH a sustainable business plan for serving that area. (That was the goal of BTOP/BIB). The largest obstacle will be: what if the unserved do not have a computing device? What if their idea of a computing device is a smartphone or a netbook?

The question then: Is this a viable sector of the marketplace to attack for a service provider? Or should this sector be left to government subsidized entities like the Incumbents? (So they can wrap a netbook in with a contract).

Let's face it. The 2 RBOC's want to go all mobile and all fiber because they remain a monopoly there. They have learned that sharing cuts into their business, because they suck ass at competition. (They also suck at being a "partner/vendor"). Ma Bell's plan submitted to the FCC says that they don't want to maintain the PSTN any more. The copper plant is already being neglected across much of our country, and its the avenue of broadband (or at least internet access) for many households and small businesses. Is the short-sightedness of the RBOC's going to further derail both broadband deployment and the economic benefits that go with it? The FCC really needs to stop delaying on decisions (like the National Broadband Plan) so that we have a clear national path. The Duopoly is so deregualted that they mainly do what they want anyway, but hardly any of their actions can be described as being in the nations' best economic interest.


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