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Comparative Broadband Speeds - US Loses Again

Brough Turner

Recently Google Labs added the Ookla Speedtest data set to their wonderful Public Data Explorer so I just had to try it out.

Here's my first graph:

These are not bogus statistics. These graphs show the average of all the millions of actual speedtests run in the respective countries over the past 4 months.

The apologists for the US's poor showing usually start by pointing out that the US has much lower population density than South Korea, Sweden or Bulgaria. Of course that doesn't hold water if you compare Seoul, Stockholm and Sofia to New York, Los Angeles or Chicago. In Seoul, Stockholm and Sofia consumers can get 100/100 Mbps Internet access at affordable prices (e.g. $13/month in Stockholm) while such service isn't even offered to consumers in New York, Los Angeles or Chicago.

By Brough Turner, Founder & CTO at netBlazr
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Huh? Richard Bennett  –  Jun 22, 2011 1:57 PM PDT

"The apologists for the US's poor showing usually start by pointing out that the US has much lower population density than South Korea, Sweden or Bulgaria. Of course that doesn't hold water if you compare Seoul, Stockholm and Sofia to New York, Los Angeles or Chicago."

Huh? The US has lower population density where people live than these other countries. What does the fact that there are some large cities in the US have to do with our average population density? The relevant concept is "urbanicity," the proportion of the total population that lives in cities.

"In Seoul, Stockholm and Sofia consumers can get 100/100 Mbps Internet access at affordable prices (e.g. $13/month in Stockholm) while such service isn't even offered to consumers in New York, Los Angeles or Chicago."

I thought you said these weren't bogus statistics. People can buy 100 Mbps download services in most American cities, and the fact that they can't buy 100 Mbps uploads except as a commercial service has no significance.

The prices of that Swedish 100/100 is pretty delicious, however. My guess is that operators can't offer a sustainable service at that price point, but it's great as long as it lasts.

Sorry, I thought I was pretty clear. Brough Turner  –  Jun 22, 2011 2:38 PM PDT

Sorry, I thought I was pretty clear.  If the only reason the US averages were so low was population density, then at least in urban areas things should be comparable, but they are not.

The market in Stockholm has been sustainable for at least a decade.

A possible explanation:  In greater Stockholm, Stokab AB leases dark fiber to all comers. Their network includes 1.2 million Km of fiber on 5600 Km of routes. Their customers currently include 50+ service providers and several hundred corporations who lease fiber for corporate uses.  While Stokab (founded in 1994) is indirectly owned by the metro area government, it has been profitable since 1999 - the political battles are over who gets to use their profits to underwrite what part of the city budget.

Place your data in context, and try again Richard Bennett  –  Jun 22, 2011 2:53 PM PDT

If you want to compare apples to apples, it seems to me you either compare countries or you compare cities. In the US, we have a long-standing public policy to the effect that people who live in densely-populated urban centers effectively subsidize telecom services for people who live in lower density rural areas. This policy is the genesis of our Universal Service Fund for telecom, a reverse Robin Hood program that requires low income, inner city telephone users to subsidize network services provided to vacation homes in Aspen and Hawaii.

You can't make any sense of raw data without placing them in the correct geographic and policy context.

We're all familiar with wild claims about how cheap networking is on other countries, but we generally find that there are either direct subsidies, policy tweaks, below-market pricing, or housing characteristics at work.

Sweden's real priciing Richard Bennett  –  Jun 22, 2011 6:51 PM PDT

According the OECD, the average monthly price for broadband service faster than 45 Mbps in Sweden is USD $55.96. Source: http://www.oecd.org/dataoecd/10/52/39575077.xls

I don't find any sources to support the $13 claim that don't cite Brough Turner.

More Sweden Data from OECD Richard Bennett  –  Jun 22, 2011 7:03 PM PDT

According this this OECD report, http://www.oecd.org/dataoecd/22/42/39574970.xls
, the cheapest broadband plan of any type in Sweden is $21.34, and the most expensive is $116.69. Comparable figures for the US are $24.95 and $144.95. These were taken before the $9.95 broadband mandated by the Comcast/NBCU merger: http://www.broadcastingcable.com/article/461501-Comcast_to_Offer_9_95_Broadband_to_Low_Income_Households.php

Brough, if you have a source for the claims you've made, I'd like to see it, but the numbers I can access say that prices in the US and Sweden are comparable, correcting for population distribution. Even the adoption rates are similar, in the 65% range (US a little higher than Sweden.)

Richard,The OECD report is wrong. There Brough Turner  –  Jun 23, 2011 5:30 AM PDT

Richard,

The OECD report is wrong.  There are several sources of 100/100 Mbps residential service in Stockholm for less than 100 Krona per month.  I have a friend who gets his service from Lunds Energi Stadsnat for 98 Krona per month. In 2009, 98 SEK was just over US$13.  With today's exchange rate, it's $15.19/month. The Lunds Energi Stadsnat website is mostly in Swedish and has recently been rearranged, so my previous link is no more, but this link may help:  http://www.afb.se/en/About-AFB/Tenant-at-AFB/Broadband/ and you can always use Google translate to navigate the Lunds Energi Stadsnat website, register and get a price quote.

I have another friend who's condo association bundles the cost of 100/100 Mbps connections into the monthly fee. While, it's second hand data, his understanding of the condo association's cost (as told to me in 2009) was ~US$8 per condo per month.

In any event, the OECD report has missed significant data.  It's also averaged the results of diverse policies around Sweden thus obscuring the success of policies in the greater Stockholm metro area.

Sweden's real priciing Richard Bennett  –  Jun 23, 2011 5:26 PM PDT

OK, I think I see what's going on with your pricing figures. Owners of urban apartment buildings in Stockholm are getting into the business of supplying "fiber Internet connectivity" to their residents as a sweetener to help them rent apartments. The apartment lessor pays for a fat pipe to the building and then subdivides it to residents for a low low price, but they're sharing a connection. This sort of thing happens in San Francisco too.

This explains why the measured speed is well below the rated speed of the (shared) pipe and the price is below the cost of a dedicated connection. What you're doing is like comparing the annual rent on an apartment to a time share.

It's no wonder the OECD doesn't consider this sort of fiber time share the equivalent of a standard Internet connection. Nice try Brough, but you're not making a fair comparison. The taxes and fees on US Internet connections are damn near $13/month by themselves.

Don't distort my real data Brough Turner  –  Jun 23, 2011 5:49 PM PDT

Richard,
That is not what is happening in at least two cases I am aware of.  Talk to someone who lives in Stockholm or spend some time getting translations of websites of service providers in Stockholm. When I¬†was obtaining data for my talk at eComm in 2009 (http://www.slideshare.net/eCommConf/26-brough-turner), I got data from friends who live in the respective cities and I got references to websites with real service offers.
You can make up any story you want, but I stand by my data.  And, at this point, I will give up on this thread.  It's not worth my time.

"Data" is not the plural of "Anecdote" Richard Bennett  –  Jun 23, 2011 6:28 PM PDT

I'm going to need some data from a responsible source, Brough.

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