Big Broadband Means Big Economic Gains

You know that old saying that you have to spend money to make money? It seems like that's where our national broadband policy has come to. With slow average speeds and high per-megabit prices, EDUCASE, an association of college IT managers, says that it could run up to $100B to fix our national infrastructure or about half of what we already paid the telcos to do. (h/t: Jonathan Karras) So what's the payoff? How about $134B in new jobs and decreased travel and medical costs? That 34% return isn't too shabby. Also consider that if all eligible federal employees took advantage of telecommuting options, they'd save $13.9B in travel costs.

It also couldn't be more pressing. Live in a rural area? Even if broadband is available, you probably can't afford it (nevermind what industry shills are saying.) Live in an area with broadband to spare? Be prepared to pay a lot more for it. Cable and phone companies are also inconsistent when it comes to upgrades. Some companies (like Qwest and now Embarq) seem to be unconcerned with enhancing speeds or they simply can't deliver. Others are building the infrastructure, but pricing still remains high and the networks may or may not support next-generation speeds from end-to-end.

We're also projected to stay behind. By 2012, a scant 10% of homes will have access to speeds of 10Mbps or higher. While FIOS and U-Verse can pass that many homes, AT&T shows little initiative to fix the last-mile copper bottlenecks on their FTTN U-Verse network (consider that Qwest can deliver 7Mbps on their aging and decrepit network) and FTTH has had limited deployment, leaving the US in eighth place.

Not all states are going to take it lying down. California formed a task force to figure out what to do and determined that public investment should be a component of whatever other solutions they decide to run with. Vermonters are forming a UTOPIA-style consortium to bring fiber to all of their residents. (h/t: Dirk van der Woude) Indiana dropped the hammer on monopolies and now competing providers are springing up like wildflowers in May, forcing prices down and service quality up.

A scary step backwards, however, is coming from our northern neighbors in Canada. The Great White North has spanked the US consistently on average speeds and broadband adoption, yet the Canadian government is talking about dropping the line-sharing requirements that have lead to a robust competitive environment. Scarily enough, this is following the steps that have gotten us into this mess in the first place.

What's obvious is that what we're currently doing isn't working and that efforts to correct course aren't coming from the federal level. Even many states can't seem to come up with a coherent broadband policy that increases competition, improves speeds and lowers pricing. If efforts like the one in Vermont show us anything, it's that solutions to broadband issues need to be local and not be inhibited by interference from state and federal legislators. Make sure those legislators hear from you that they need to let us solve the problems that they helped create.

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5 Responses to Big Broadband Means Big Economic Gains

  1. Roger says:

    We need a National Internet Policy. The U.S. has fallen behind to 16th and we can’t afford to ignore this problem any longer. The Communications Workers Of America’s project Speed Matters addresses this issue. The have an easy link with a speed test and sample letter to your Congressperson and Senators that you can edit and send:

    Help us to get the word out! Check out the website for more information and tell you friends to join in-

  2. Captain Mark says:


    I overheard something yesterday and I just wanted you take. The cable guy (Comcast) indicated that when the analog signal is removed when they convert to all digital next year, that this will allow for a huge increase in bandwidth. He indicated that they already have on the books ready to roll out an upgraded package that will compete with glass. Is this possible?

    Did you ever think about applying for that position down in Provo?

  3. Jesse says:

    That’s not entirely true. The FCC has mandated that cable operators continue to provide analog signals through 2012. Comcast is going to try and skirt around the requirement by spending a ton of money on digital-to-analog converter boxes (similar to the ones used for over-the-air signals), but it won’t get them out of the FCC’s rules. I’m betting that they’ll see if they can get away with it after Kevin “War on Cable” Martin is no longer in charge.

    Even if they *did* go all-digital, so much of the bandwidth is munched by the digital signals that there’s still not enough room for next-generation bandwidth. Each digital signal crunches about 6MHz of bandwidth when sent at decent digital quality. Even if you use SDV to only send the channels that people are watching, you can still burn over 80% of your capacity on television. The leftover 150MHz of bandwidth isn’t adequate to support their VoIP and broadband offerings, the former of which is growing very rapidly. The Consumerist put it best when they said that cable operators are like bi-polar buffet owners: they want to advertise “all you can eat” and get mad when you do just that.

    The open iProvo position is well beyond my list of qualifications. You’re not the first one to say I should try out for it, though.

  4. Captain Mark says:

    Thanks Jesse,

    I think you are underestimating your skills. Do you think now that Rocky is gone that Salt Lake City might be back in the game for glass?

    Captain Mark

  5. Jesse says:

    The rumor mill is that Becker is a lot more friendly to UTOPIA than Rocky ever was, yet he’s been cautious to commit to one side or the other of the debate. I know there’s a lot of residents in the city who would like Salt Lake to revisit the issue of UTOPIA membership, but there’s not much organization. Probably the best thing Salt Lakers can do is write Becker and the city council on their own and ask him to reconsider the issue.

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