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Bandwidth: Why Fast is Important in a Global Economy

Leonard Grace

Bandwidth is the basic foundation for Internet traffic as a connector to everything important in our lives. Whether it is basic bandwidth for connecting to family and friends, or a super fast highway for global reach and competitiveness in the business world, bandwidth constitutes the speed at which we connect as a global presence within the expanding sphere of Internet communication.

Bandwidth: "defined as the speed at which data is transferred over an electronic communication device like a server. The units of measurement are based on the maximum transfer rate and measured in either Kbps or Mbps."

• Kbps: (kilobits per second) — "A measure of 1024 bits of information transferred per second."
• Mbps: (Megabits per second) — "A measure of approximately one million bits of information transferred per second."

To understand why bandwidth is important to all Americans, including personal and business uses, we must understand the different types Internet traffic. We also must understand U.S. bandwidth rankings from a global perspective and how successful infrastructure upgrades can ensure fast, secure and easily accessible information sharing in a globally competitive economy.


Types of Bandwidth

• Dial-up – the lowest speed of bandwidth providing 56 kbps connection normally used for e-mail only as transferring large files are impossible.

• DSL – much faster than dial-up and has plenty of bandwidth to spare. Is good for large file downloads like video, typically provided by a modem and phone line installation.

• Cable – provided by Cable TV companies with a Hybrid-Fiber Coax connection. It provides speeds faster than DSL which typically range from 4Mbps to 8Mbps. Increases speeds of large download and uploads.

• Fiber – The future of the Internet rests with the fiber connection. Fiber must be run to your home or business and provides speeds of 30Mbps download and 5Mbps upload.

US Global Ranking

It can be seen in the accompanying graph, (Courtesy Akamai 2010), that global connection speeds are much higher in countries like South Korea, Hong Kong, Japan and many other countries. In fact, the US is ranked 11th in the Top 10 Countries — Average Connection Speed — Q4 09.

From an economic standpoint, the US must move to change its bandwidth competitiveness on a global scale. Many conclude that a free and competitive business model of the US has kept us behind the curve in Internet speed, access and adoption. Enter the National Broadband Plan, developed by the FCC, to change our status in all aspects of the Internet. A comprehensive road-map that directs the adoption of Internet standards to take us through the next 10 years to improve speeds, accessibility, and universal adoption for both business and personal use.

Uses

The uses of fast bandwidth can be chronicled in forward thinking experts who realize to inevitable potential to change the business and personal use of bandwidth can change our lives, from energy conservation through monitoring and applications , remote medical monitoring and diagnosis, B2B applications to strengthen collaboration, and remote educational advances through e-learning. These applications all have the potential to advance the U.S. in job creation and a global competitive advantage.

Infrastructure Upgrades

Unfortunately, due to a lack of wide-spread competition within network provider footprints our Bandwidth does not compare to a more government oversight approach adopted in other developed nations. While the FCC is looking to change the dynamics in competition, while mandating future bandwidth speeds in measurable increments of time; it will be incumbent on Internet Service Providers to upgrade their networks sooner rather than later.

• The Cable Industry has approached Internet upgrades with the advent of Docsis3 (Data Over Cable Service Interface Specification), permitting the addition of high-speed data transfer over a Cable TV system.

Verizon is accomplishing the task by upgrading to FIOS (Fiber-to-the-Home) approach, using the future or (end-game) solution, which most operators will move toward eventually.

AT&T has adopted the U-Verse solution which uses IP (Internet Protocol) to deliver its high-speed Internet service.

The bottom line remains that without a comprehensive plan by Internet Service Providers to continue an aggressive infrastructure improvement strategy, the US will continue to lag behind globally in bandwidth speeds without proper upgrade incentives, which could put us at a distinct disadvantage in a fast growing global economy.

By Leonard Grace, Founder & Editor - Broadband Convergent
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1024 vs. 1000 Frank Bulk  –  Aug 02, 2010 7:38 AM PDT

For speed, the generally agreed-upon standard is 1000, not 1024:
http://www.speedguide.net/read_articles.php?id=115

The speeds provided for DSL, Cable, and FTTH seem to be somewhat arbitrarily chosen.  I don't see much cable broadband being sold at speeds of 8 Mbps — more often it's 8, 10, or 15, and with FTTH I see speeds in the Market place from 10 to 100 Mbps.

The bottom line remains that without a comprehensive plan by Internet Service Providers to continue an aggressive infrastructure improvement strategy, the US will continue to lag behind globally in bandwidth speeds without proper upgrade incentives, which could put us at a distinct disadvantage in a fast growing global economy.

In your article you mentioned the cable operators upgrade to DOCSIS 3.0, AT&T;'s use of VDSL, and Verizon is one of many LECs that's deploying fiber.  What kind of plan are you envisioning, and why would ISPs collaborate with each other?  Service providers are building out their networks as quickly as their customers demand and shareholders allow.  Without external incentives (subsidies or government blessed monopolies to ensure market share/power) or the customers' willingness to pay more, I'm not exactly sure what you're looking ISPs to do?

Frank

Bandwidth: Why Fast is Important in a Global Economy Leonard Grace  –  Aug 02, 2010 8:38 AM PDT

Hello Frank,

Thanks for the great comment!

Kilobit per second is measured at 1000 per second, not 1024. My reference was for kilobytes which is at 1024 per second, when used to describe Memory Size, or Data Storage bits/bytes are generally calculated as some exponent of 2. (Thanks for the reference.)

First, I'm not a proponent of regulation to get to where we need go with bandwidth speeds. It is my opinion this will inevitably hamper market forces, innovation and investment into infrastructure upgrades. ISP's are going to follow their existing business models which are predicated on acceptable ROI's and shareholder equity. If there is no incentives or real competition to move forward with aggressive upgrades; it will not happen.

Moving forward, there needs to be more competitive forces released into the market to drive innovation and investment. More tax incentives should be developed to encourage robust investment in infrastructure. Companies are reliant on an acceptable ROI, and that should be the focus of governmental incentives such as the Universal Service Fund reallocation to broadband from telephone service.

ISP's should delve into and embrace collaboration with entities such as the cable industry's CableLabs to develop long-term plans for infrastructure upgrades, or the best way to achieve that with an acceptable ROI. As an example, Apple has collaborated in open source application development to push the wireless/mobile industry to exponential growth.

My bottom line remains that good tax incentives; a smart Universal Service Fund implementation; easier access for competitiveness within markets; and collaboration within open source technologies that will help move markets in the right direction should be a top priority in all constituents interested in fast bandwidth.

From a policy perspective it's important to Frank Bulk  –  Aug 02, 2010 8:10 PM PDT

From a policy perspective it's important to distinguish between competitive and non-competitive markets.  Where effective competition exists the gov't doesn't need to do too much, other than make sure that service providers properly and clearly disclose limitations/restrictions related to their service.

In markets where there's little or no competition, due to the cost of physical plant, the gov't should not be trying to develop competition and subsidizing one or more service providers.  Better to subsidize the cost gap using USF and provide tax incentives to provide services offered in competitive markets. 

I agree with you that CableLabs has done a fantastic job of developing industry standards that still facilitate competition both at the consumer and product manufacturing levels.  With fiber we have the various xPONs and with copper we have various xDSLs, but there's no formal interop testing like what CableLabs has.  I think the copper and fiber industries need to work towards to that, because the end result is a bigger piece of the pie with lower equipment prices.

This "collaboration within open source technologies" is a little vague for me — can you expand on that?

Bandwidth: Why Fast is Important in a Global Economy Leonard Grace  –  Aug 03, 2010 9:54 AM PDT

It is a premise that open source collaboration can be an effective way to add too, and increase the value of an existing product and/or idea. The concept has been around for a long time and encourages developers to collaborate to improve and expand the model. Both businesses and consumers gain tremendous value through collaboration and openness in encouraging innovation.

I think I follow what you're saying, Frank Bulk  –  Aug 03, 2010 2:34 PM PDT

I think I follow what you're saying, but in a competitive environment that's not going to happen between service providers.  We're talking broadband, right, not broadband apps?

I think I follow what you're saying, Leonard Grace  –  Aug 03, 2010 3:50 PM PDT

It is happening now in the mobile industry and started back with Henry Ford and the automotive industry.

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