Monday, November 14, 2011

Broadband Future

"None of the world's major economies will escape a slowdown, the Organization for Economic Co-operation and Development said on Monday, highlighting increasing signs that growth momentum is dwindling across the board," according to Portfolio.

Mix this with a 68% broadband penetration statistic in the US and you have to wonder how much more revenue carriers can get from the consumers.

The FCC wants faster broadband to home. "If Federal Communications Commission Chairman Julius Genachowski gets his way, the FCC will set a goal of 100-Mbps service delivered to 100 milliion American homes by 2020," writes Gary Kim. "One hundred meg is just a dream," says Qwest Communications International Inc Chief Executive Edward Mueller. "We couldn't afford it."

"Few customers now buy 50-Mbps services where such speeds are available, in large part because the cost is in the triple-digits range." So it comes down to cost and investment. The real problem is that even SMB won't pay 15% more for faster speed, but let me remind you we are talking about BROADBAND here, not Dedicated Internet Access. Carriers are going to have to get better at selling DIA versus Broadband in order to raise that B2B ARPU.

The 100 MB is part of the FCC's BROADBAND ADOPTION CHALLENGE, which has one problem: "One-third of all Americans – 100 million people – haven’t adopted broadband at home" which is why ELNK, AOL and NetZero are still making millions off of dial-up quarterly!

"About 46% of low-income families have adopted broadband at home compared with over 90% of higher- income families" which means that these low-income family members would be hard pressed to apply for jobs, since "80%+ of Fortune 500 companies require online job applications (including major employers such as Wal-Mart, Target, Costco, and ExxonMobil)". Big problem, unless the apps can be accessed via dial-up, mobile or at the school or library. This means that the E-rate program is even more vital today for the economy and the digital divide than ever before. This will be assisted via the NEW LOW-COST BROADBAND INTERNET OFFER FOR FREE SCHOOL-LUNCH FAMILIES, "Participating NCTA member cable companies will offer all eligible families two-years of $9.95 + tax broadband cable Internet, with a no installation/activation fee option and no modem rental fees (with an option to purchase a $10 modem)."

No comments: