25 Mbps as table stakes – that’s disruptive

Written by on January 27, 2015 in News with 0 Comments

Tornado stormFCC Chairman Tom Wheeler is about to up the ante on the communications industry. Every four years, the FCC updates its definition of broadband and providers have to stick to the definition. It also helps define the funding levels for rural broadband. The last time it was updated the definition was in 2010, so it is overdue. Since 2010 the definition of broadband in the US has been 4 Mbps. Wheeler is proposing an increase of six times that. He is not proposing this in order to put more pressure on established communications providers, although it will. He is, according to an interview he gave last September, addressing the fact that “three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy.” 20 percent have no choice at all.

If this decision goes ahead, it will be a significant driver in fixed line investment, set to hit $10.33 billion, according to Gartner. It might even make Gartner revise the figure. Sharply upwards.

Competition in the areas in the US that are outside ‘downtown’ is not as hot as in other regions of the world, and this will stimulate activity and investment. The problem is, according to the article in the Motley Fool, that it will put different levels of pressure on different classes of operators. Cable companies will be able to handle it. Smart players like Verizon will take the hit because of their FiOS roll outs and the fact that they have been selling off their copper assets and businesses. Smaller players and those companies still trying to squeeze the last megabit from copper will find it tough to keep up.

It will certainly cause a shake up. And even if copper can be made to deliver 25 Mbps, which it can if you are sitting on top of the distribution box, what happens in 2019, when Mr Wheeler decides that broadband actually means 100 Mbps?

The bar, it seems, will continue to rise.

It would be nice to think that this kind of bar setting could be used elsewhere. In some European countries, it is quite clear that only the incumbent can provide acceptable broadband speeds, while the competition can provide nothing that even looks like broadband. If the incumbent can provide proper broadband, then so, by definition, can their competitors who share their facilities. Perhaps, though, it will ultimately come down to Government intervention and the fundamental decision as to whether we agree with Wheeler’s thesis that broadband is “the essential infrastructure for 21st century economics and democracy.”

With this kind of bar raising and the net neutrality arguments happening at the same time, we can look forward to/dread more disruption soon.


About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


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