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Opinion: Keeping a lid on broadband

January 28, 2008 12:00 PM ET

Computerworld - Deregulation of telecommunications has been nothing less than an unmitigated disaster for U.S. businesses. If the broadband mess isn't hurting your business today, it soon will be. It's time to do something about it.

The Internet binds businesses to customers, suppliers and partners in a set of federated networks, and the concept of the virtual office has extended the corporate network, delivering bandwidth-hungry services into many employees' homes.

Truly high-speed Internet services of 100Mbit/sec. to 1Gbit/sec. are opening up new business opportunities that could create the next Google.

But not in the U.S. Here, the Internet is being throttled at its endpoints by telecommunications carriers and cable companies with a record of spotty service quality, a broadband rollout that has left more than half the nation behind, and overpriced, overprovisioned "high-speed" broadband services that are still widely unavailable.

In five years, multimedia business interactions will be commonplace. Global, high-definition videoconferencing over the Internet isn't far off. Problem is, an HD video stream requires a sustained 2Mbit/sec. end to end, but today as many as 30 customers in a given area in the U.S. may share 30Mbit/sec. of broadband capacity. What's more, one cable company is monitoring Internet traffic and throttling back or stopping some audio and video streams that compete with its core business.

Will you get the bandwidth you need? If your business is in Europe or Asia, the answer is yes. The average advertised bandwidth in Japan is just under 1Gbit/sec. In Korea and France, it's over 40Mbit/sec. That sort of capacity will drive innovations that U.S. businesses can't even envision yet.

But in the U.S., except in a few metro areas, most people are lucky if they can get 6Mbit/sec. — and in rural areas, most users can't even get that.

It's a disgrace born of political failure. In 1996, the government agreed to free the Baby Bells to compete in the long-distance market if they met certain conditions. Among other things, the Bells promised to share their facilities with other providers and pledged to run fiber to every home. "Almost every one of them reneged on their promises," says David Passmore, an analyst at Burton Group.

Ironically, the rate relief the carriers were given over the years in return for their empty promises — by some estimates as high as $70 billion — would have gone a long way toward running fiber to every home in the U.S.

"The politicians gave away the store, and all of the networks that were paid for by the rate [payers] were handed over to the Verizons of the world," says Passmore.

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