U.S. Sees Broadband Explosion

Published July 1, 2006

Broadband adoption in American homes grew by 40 percent in the past year, twice the growth rate of the year before, according to the Pew Internet and American Life Project. That’s good news that should be followed by more if technology is allowed to move forward, unfettered by heavy government regulations.

Broadband adoption among African-Americans increased by 121 percent between 2005 and 2006 and English-speaking Latino households reported a strong 46 percent increase, bringing those groups’ overall household broadband adoption rate to near parity with white households, according to the report. That quells worries that some populations would be left out of the Internet revolution. Even access in tough-to-reach rural areas is expanding at a brisk 39 percent. While not everyone always finds it easy to get online, the revolution is touching virtually every group in a significant way.

New applications such as social networking sites like MySpace.com or online music services such as iTunes have driven demand for more bandwidth, and that in turn is driving innovation in the broadband deployment market. Not only are the telco and cable companies working to deploy more high-speed lines, but there are also new satellite and broadband over power lines (BPL) options.

AT&T recently announced a satellite-based broadband Internet access service, powered by WildBlue, for rural customers across its 13-state territory. Rural satellite-based broadband subscribers can choose among three service packages, with prices ranging from $49.95 to $79.95 per month, and broadband speed options ranging up to 1.5 megabits per second (Mb/s) downstream and up to 256 kilobits per second (Kb/s) upstream.

But perhaps even more intriguing is BPL.

Imagine just plugging your computer into an electrical outlet in the wall and having instant high-speed Internet access. That’s what BPL promises, and pilot projects have been rolling out all over the country.

“BPL has the potential to bring broadband Internet services to communities who do not have broadband service available today from the telephone companies or cable companies. In fact, in other communities that already have DSL and cable modem service BPL can provide a third broadband ‘pipe’ to customers, thereby increasing competition and consumer choice,” said California Public Utilities Commission (CPUC) President Michael R. Peevey.

‘A Light Touch’

The CPUC recently approved a new regulatory framework in an effort to create a more stable market for capital investment in the technology. That’s a step in the right direction, as many investors were worried the highly regulated electric utilities marketplace would drown out entrepreneurial spirit.

New CPUC Commissioner Rachelle Chong, formerly a commissioner at the Federal Communications Commission, has seen the damage caused by heavy regulations in the telecom space. Clearly, she wanted to avoid those problems in the electrical broadband market.

“In taking a light touch approach to regulate BPL, this decision sets the table for electric utilities to bring a new flavor of broadband technology to Californians,” Chong said.

Commissioner John Bohn had similar sentiments. “By removing unnecessary regulations from its path, we free BPL entrepreneurs to invest and take the risks they want, while protecting ratepayers from any downside,” he said.

The new framework takes significant steps, such as allowing third parties to invest in and operate BPL systems and exempting certain types of BPL-related transactions from regulatory review. Those are great improvements and the CPUC should be congratulated for its vision in this space.

Liberalizing the marketplace to allow for the wide adoption of new technologies should not stop with power lines or the CPUC. A host of other issues need proper attention for Americans to reap maximum benefits from the Internet superhighway. Cable franchise liberalization and universal service reform are two obvious areas that come to mind.

In the meantime, the 42 percent of all American adults who have a high-speed Internet connection at home will continue to feed the broadband boom.

Sonia Arrison ([email protected]) is director of technology studies at the Pacific Research Institute. Reproduced with permission of TechNewsWorld and ECT News Network. Copyright 2006 all rights reserved.