Broadband Slows Down

Posted on August 12, 2008

Broadband signups have slowed to their lowest point in seven years in the US. You would think that every year would show significant improvement over the previous year indicating widespread availability and widespread acceptance.

Let’s put that in perspective. Given the current rate of increase and the average speed in the Japanese market, it could take up to 100 years for the US to catch up…that based on the average speed in the US, 2.3mbps compared to the average in Japan, 63mbps.

Those are the findings of two separate studies released this week that point to a sad state of affairs in the broadband market.

That slackening of the market does not entirely mean there is waning interest by the consumer. In reality, if studied deeper, it can be shown that Verizon and AT&T were pretty busy and that the key holdup for broadband adoption in the last quarter was at least partly due to the companies pushing higher-speed, premium services instead of basic DSL.

A drop in basic broadband pricing by the phone companies would probably pump up sales volume. The downside of that is that once prices have been lowered, it is difficult to try and raise them, as customers have a tendency to balk at increases.

More customers at a lower unit cost or fewer customers at a higher unit cost. If the end result dollars are anywhere near the same, the telcos will go with fewer customers due to less infrastructure to support and less tech support to provide.

So, it sounds like we’re back at legislation again to get things moving. Data continues to show the need for change.