Figues reprinted in Om Malik's site show that as the market expands the major share change is from ADSL to Fiber To The Home (FTTH). Like most of Asia (and for that matter, the world) the predominant broadband delivery tool has been some form of DSL pivoted by the telecoms. (Our peculiar regulatory history has a lot to do with cable being a contender here.) Until recently DSL had upwards of 3/4s of the market but that has fallen dramatically to 2/3rds in the last year.
Japanese trends could prove to be very telling: while ADSL can be a good interim solution, fiber might be the better long term bet. (Hat Tip, Dirk van der Woude)What's interesting about this is that as the market matures it is using xDSL as a stepping stone to develop the market for and to fund the shift to FTTH. But that stepping stone won't be available in the US. Advanced DSL (ADSL, VDSL) has barely started in the US and has nothing approaching the penetrartion rates (and hence the income potential) of Asian systems. The fiber to the node plans advocated by ATT and BellSouth are intended to be the same sort of stepping stone process we see in Japan--building out fiber closer to the home, then eventually replacing copper all the way to the home with fiber.
But they've had this plan for literally decades and it simply is not working. DSL sales are not producing the incentive to build out a real national network. Every Telco has been driven to offer simple DSL as the cheaper alternative to the Cableco offerings. Simple DSL doesn't have the capacity to build up the market and at fire-sale prices with relatively low penetration it can't supply the income to fund the shift to fully modern systems.
Verizon, seeing the handwriting on the wall, has abandoned the futile hope represented by using DSL as a stepping stone and is trying to leap into the future by bypassing the fiber to the node/DSL plans that ATT & BellSouth are forced to stick with due to their relative poverty. It remains to be seen whether even market-leader Verizon can succeed and the market has been reacting harshly recently to the continued drain that the fiber build represents.
Why does bootstrapping work in other countries but not here? A good question. An important one. One I'll reflect on in a later post. But a hint: We've so fragmented our market that no one company exists that can afford a to build a ubiquitous, national, broadband network. That's not the fault of regulation, but the fault a band of politicians that thought they could legislate away the facts of economics. Our falling status in broadband is the clearest sign that they were wrong. And wrong to try. More later.