Saturday, June 30, 2007

Why is America's internet so slow?

Have you ever gotten frustrated with how long downloading something like video clips can be, or how laggy your internet radio station is, even with a broadband connection? Yeah, AT&T and Comcast like to tell you they offer speeds "Fifty times faster than dial-up!" Well, that's like Ford saying they offer a car fifty times faster than a turtle. It's not very impressive. According to this article Wise Man Adam sent me, other nations in the developed world have average speeds 10 or 20 times faster than our average broadband speed. The article says:

The Federal Communications Commission, which has broad sway over the emerging broadband market, defines "high speed" as 200 kilobits per second. The benchmark was adopted more than a dozen years ago when still-slower dial-up was the rule. Cohen says 200 kilobits is not even recognized as broadband in most countries today. "There is nothing speedy about it."

The median U.S. download speed now is 1.97 megabits per second - a fraction of the 61 megabits per second enjoyed by consumers in Japan, says the report released Monday. Other speedy countries include South Korea (median 45 megabits), France (17 megabits) and Canada (7 megabits).
Before I read this I didn't know that they offered speeds like that anywhere in the world. 61Mbps is frickin fast!

I would offer two comments about this though that might give some explanation as to why our broadband networks haven't increased speed as fast. One, the US has more broadband subscribers than any other nation in the world (including China) and is far larger geographically than many of the ones we're compared to such as Japan, and you notice that Canada has an average speed of 7Mbps, so I think that proves geography has something to do with it. And again, with more users the slower the network. If I had a cable node all to myself, I could easily have 30Mbps, but I don't. Second, and perhaps more importantly, US companies routinely take anti-competitive measures against potential competitors. For example, tv providers tried to block Verizon Fios from entering the market because it also offers tv, and AT&T tried to block Comcast from offering VOIP services with their cable internet. Ours is not exactly a free market.

Verizon Fios does offer a respectable 15Mbps service, but they don't even offer service to all of Dallas yet. Time-Warner offers up to 10Mbps in areas where they're in competition with other ISPs, but not in areas where they aren't. I'm not sure what legislative action we could take that would change anything substantially, unless the federal government got involved with the building of infrastructure.

As a case in point, that's kind of what they do in Japan, and it's part of the reason their speeds there are so high. According to this article:

Japan, through its u-Japan broadband strategy, provides money for cities to wire schools and community centers, provides zero-interest or low-interest loans for cities and businesses to deploy broadband, and provides tax breaks for the purchase of networking equipment, Ebihara said.

Unlike in the United States, Japan's two incumbents are required to share their last-mile copper loops, their fiber loops and their Internet backbone with competitors, Ebihara said. Since 2003, the Federal Communications Commission has ended most sharing requirements for incumbents like AT&T, arguing that providers should build their own networks.

Large U.S. incumbents AT&T and Verizon Communications argued that requirements to share broadband facilities with competitors discouraged them from improving their networks or building new fiber networks. They also called on the FCC to create regulatory parity between DSL and cable modem service, which was not required to share its lines with competitors.

NTT East has also lobbied to end the network-sharing rules, Ebihara said. But it has moved ahead with laying high-speed fiber networks to Japanese homes even though it has lost the network-sharing fight with the Japanese government so far, he said. NTT East's fiber-to-the-home service now passes 75% of the households in the company's region.
So basically, in Japan they do exactly what oppoonents argue would discourage network growth...but the companies still expand service because they're still making money. Yep. Those who argue that regulation is always a bad thing need to look at the rest of the world.

Interestingly, there is something in the works over here that may provide more options and cause the market to become more competitive. This bill is being proposed by Senator Kerry. Here's the gist of it:

The WIN Act specifically requires the FCC to permit license-free use of the unassigned broadcast spectrum between 54MHz and 698 MHz within 180 days of enactment. This legislation will enable entrepreneurs to provide affordable, competitive high-speed wireless broadband services in areas that otherwise have no connectivity to broadband Internet.
This spectrum apparently is the range of frequencies being abandoned by analog broadcasters as tv moves over to all-digital signals, so it'll actually have a very high throughput.

Although, those providers still have to be ISPs themselves, and there's little chance of your average person doing that! But it just might provide some incentive for smaller ISPs to get in on the action and offer cut-rate pricing on very fast broadband.

No comments: