The Many Paradoxes of Broadband

[Dave Farber <dave () farber net>]

Date: Wed, 3 Sep 2003 01:18:15 -0400
To: undisclosed-recipient:;
From: Monty Solomon <monty () roscom com>

The many paradoxes of broadband
by Andrew Odlyzko

Abstract

There is much dismay and even despair over the slow pace at which
broadband is advancing in the United States. This slow pace is often
claimed to be fatally retarding the recovery of the entire IT
industry. As a result there are increasing calls for government
action, through regulation or even through outright subsidies.

A careful examination shows that broadband is full of puzzles and
paradoxes, which suggests caution before taking any drastic action.
As one simple example, the basic meaning of broadband is almost
universally misunderstood, since by the official definition, we all
have broadband courtesy of the postal system. Also, broadband
penetration, while generally regarded as disappointingly slow, is
actually extremely fast by most standards, faster than cell phone
diffusion at a comparable stage. Furthermore, many of the policies
proposed for advancing broadband are likely to have perverse effects.
There are many opportunities for narrowband services that are not
being exploited, some of which might speed up broadband adoption.

There are interesting dynamics to the financial and technological
scenes that suggest broadband access may arrive sooner than generally
expected. It may also arrive through unexpected channels. On the
other hand, fiber-to-the-home, widely regarded as the Holy Grail of
residential broadband, might never become widespread. In any case,
there is likely to be considerable turmoil in the telecom industry
over the next few years. Robust growth in demand is likely to be
combined with a restructuring of the industry.


Contents

1. Introduction
2. Making money in telecom the Yellow Pages way
3. The state of the telecom industry
4. Telecoms and nineteenth century railroads
5. Demand for telecommunications
6. What is broadband?
7. What is broadband good for?
8. Neglected opportunities
9. Telecom today and nineteenth century postal systems
10. Diffusion of new technologies
11. Continuing technological progress
12. Costs of connectivity
13. Financial markets and the arrival of broadband
14. A spoiler at the broadband party
15. Conclusions


http://firstmonday.org/issues/issue8_9/odlyzko/

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