Tuesday, May 03, 2005

No Such Thing as Too Much Bandwidth

This article from eMarketer on a new "Asia-Pacific Broadband" report contains starkly clear explanations about the importance of broadband access and why countries like South Korea and Japan have invested so heavily in fiber and why China is doing so now.

Did I mention that it makes a compelling case for the LUS fiber to the premises project?

Here are a few key quotes:
South Korea and Japan are in the forefront of broadband access because their governments have fostered a competitive marketplace through economic and regulatory policy. As a result, their consumers have a choice of broadband technologies and service providers, and residential bandwidth has become extremely affordable. Broadband connections have gone from 1-3Mbps two years ago to 50MBps-100Mbps today. New broadband services, including VoIP, online games and IP television, are also driving demand.
Ah, "competitive marketplace." That scurrying sound in the background are the sock puppets of the incumbents and the incumbents themselves scrambling to say "See! Market driven is the way!"

I would agree were it not for the fact that the incumbents and their freres in the industry have spent hundreds of millions of dollars lobbying and lawyering to make sure that competition is restricted. We don't have a competitive telecom marketplace in the US and certainly not in Louisiana and Lafayette.

LUS would inject true competition into the local voice, data and video marketplace. Doubt it? Well, consider the fact that your friends at Cox (you know, the ones "bringing the Fuchsia to Lafayette!") have not raised their rates since word got out last year that LUS was considering getting into the voice, data and video business. I think there were four rate increases the year before LUS made its move. Coincidence? Think again!

Here's another quote from the Asia-Pacific Broadband author, Ben Macklin:
"Investing in infrastructure, whether it is roads, railways, equipment or telecommunications, is an investment in the future. The evidence for economic and productivity gains stemming from road and railway upgrades has been well documented. More recently, efficiency gains from utilizing IT and e-business processes have also been clearly identified. In 2001, the Brookings Institute estimated that widespread adoption of basic broadband in the United States could add $500 billion to the U.S. economy and produce 1.2 million new jobs -- yet there continues to be debate in the US and elsewhere as to the value of investing in broadband infrastructure.
So, the LUS project would position Lafayette to capitalize on leading technology trends — including jobs creation — at a time when the rest of the country (and certainly those in the south central US) continue to lag these trends.

Friends, that's called comparative advantage and that is the critical element for success in economic development.

There's more:
"A question that politicians and CEOs often ask in relation to broadband infrastructure is: what will consumers or businesses do with all that bandwidth? When US telecom Verizon announced its intention to roll out optical fiber across its national footprint, one of its competitors quickly responded by suggesting that consumers don't need that much bandwidth. Yet the building of better roads in the US in the early 20th century was one of the major factors in driving the sale of cars, and in turn creating a massive industry. After all, there is no real point in buying a car if there is no road to drive it on."
Gee! Wonder if the 'competitor' questioning Verizon's commitment to fiber was someone from BellSouth?

Ever see the commercial for NASDAQ, where Steve Ballmer of Microsoft recounts the story about telling his parents he was going to join the company? He says his mother asked him, "Why would anyone need a computer?" Sounds quaint now, but in the 25 or so years since he had that conversation with his mom, the world has undergone a profound change, driven in large part by the computer tied to the networks that link the world. If Ballmer had that same conversation with his mother now, I'm pretty certain she'd understand why people need computers.

Analogies don't always work, but one of the best one that has been applied to technology, opportunity and economic development is based on a quote from hockey player Wayne Gretsky, "The Great One." Gretsky said the key to his prowess as a player was his ability to anticipate where the puck would be in a few seconds, not reacting to where it was in that instant. "Skate to where the puck will be, not to where it is," was Gretsky's condensed version of his insight.

The LUS fiber to the premises project is our community's opportunity to skate to where the opportunity will be rather than being bound by a strategy imposed on us that is guided by considerations other than the community seizing on opportunity.

Why is this important? Again Macklin:
The analogy between road infrastructure and broadband infrastructure is apt, he says, because it reflects the US economy's transition (like other economies around the world) from manufacturing to information and knowledge. The manufactured products of the past were distributed via road and rail; today's information products are distributed via telecommunications networks.
Viewed in this context — and against the backdrop of the prolonged and persistent efforts of incumbents to treat bandwidth as if it was scarce, rather than offer it in abundance — the LUS fiber to the premises project is an essential infrastructure investment that is critical to the future economic well-being of this community.

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