Seybold's take: Free broadband isn't realistic

andrew seyboldAfter spending the last few weeks discussing the FCC's Broadband Plan and reading blogs and comments on various government sites (start with www.broadband.org), one must conclude that many of the people voicing their opinions think they should be paying less for Internet access, both wired and wireless. Multiple posts claim our broadband access charges are the highest in the world.

I really wish that before sitting down in front of their keyboards people would do even a little research and not simply parrot unsubstantiated statements they picked up somewhere. They could start with some of the latest figures from, for example, Bank of America Securities-Merrill Lynch, which provides quarterly updates on various aspects of the wireless industry. In its latest report, it shows that the average American uses more than 800 minutes of wireless voice a month--almost double the second highest country where the average is 447 minutes. The reason for such high usage can be found on another chart that shows the U.S. average revenue per minute for voice is $0.05, which is No. 42 in the world. Switzerland is No. 1 with an average per-minute cost of $0.28, Japan follows with $0.25, and most European countries fall between $0.19 and $0.15.

We also enjoy some of the lowest wireless data prices in the world. U.S. network operators derive an average of 26.4 percent of their total revenue from data services, No. 24 in the world for average per-megabyte cost of data, which continues to decrease year-over-year. Recently, many network operators shifted from all-you-can-eat plans to measured data services to manage bandwidth and ensure there is enough bandwidth for all customers on a network.

As I have said before, the issue is not technologies, we have plenty of them: wired, cable, fiber, and many flavors of wireless. It is about the economics to make deployment in low-density, rural areas profitable. Most people in urban America already have at least six broadband providers to choose from, so the issue here is also economics: how to provide services for those who want but cannot afford them (including a computer or other access device). As for the rest, there will always be people who don't want broadband and don't care if it is available.

I am really tired of reading that Internet access should be free like many other government services. I cannot identify a single free government service. Even the oft-quoted access to our highways is paid for by everyone who drives a car. Stimulus grants are supposed to help provide broadband access where there is none, but the funds will most likely be awarded to those with the best proposal writers, not the best solutions.

If the FCC's Broadband Plan is to be applied with a cookie-cutter approach to all underserved areas, nothing will be accomplished. There are many different ways to provide broadband and we need to use of all of them as appropriate. For example, if a school has broadband but the surrounding area does not, let's spend about $50,000 to build a tower and install a WiMAX radio to serve the people within a 5-10 mile radius of the school. Let's spend some money to extend wireless broadband. Today 96 percent of all U.S. citizens have access to one or more wireless voice network and 92 percent have access to at least one wireless broadband service. Let's fill in that 4 percent gap with wireless data services. The towers and cell sites are already there, we only need to add broadband and backhaul and we will have accomplished much more than will be accomplished using stimulus money grants. Even Clearwire understands this and asked for a grant to build out areas around Detroit, identifying an area that really needs broadband and then committing to using its own funds to build out metro Detroit. These are the approaches that are needed for a successful broadband plan.

It is worrisome to me to read the blogs and ideas being floated on the government broadband sites. Many who contribute to them are out of touch with the realities of broadband. There is no free lunch and there is no such thing as free broadband service--someone, somewhere, has to pay for it. Wireless and cell sites aren't deployed unless there is an economic model for doing so. We need to work on the economics and use the appropriate technologies in the various parts of the nation. Broadband is about IP and IP packets simply go where they are directed--they don't care what type of network they start on or end up on.

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide. www.andrewseybold.com

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