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May 23, 2013

Universal Service versus Gigabit Networks

By Gary Kim, Contributing Editor

It is a legitimate regulatory and public policy concern to monitor the degree of availability and minimum Internet access speeds people have access to, as well as the prices people pay for such access. But top speeds likewise are a legitimate concern.



And there sometimes is a conflict between rapid progresses on each goal: wider availability and minimum speeds, versus deployment of very high speed services. Universal service programs address one problem (rural access, minimum speeds), while other initiatives (Google (News - Alert) Fiber, Gig.U) address the other problem (gigabit access).

Some might argue it makes as much sense to boost top speeds as to concentrate on ensuring minimum speeds, since those goals largely are met.

And the markets might already be moving to supply much more “very fast access.”  The availability of 100 Mbps to 1 Gbps Internet access services grew the fastest, from 2010 to 2012, according to a new study by the National Telecommunications and Information Administration (NTIA). Though growing from a low base, availability of 1-Gbps services grew nearly 300 percent between 2010 and 2012.

And that is just what some Internet access speed forecasts would predict. As a rough rule of thumb, speeds increase by about an order of magnitude every decade.

Availability of 100 Mbps services grew even more: 448 percent between 2010 and 2012. Availability of 50 Mbps services grew 160 percent between 2010 and 2012.

Services operating at 25 Mbps, arguably the speeds most consumers tend to buy, grew about 57 percent, in terms of availability.

Availability of lower-speed services has reached virtual ubiquity. Some 98 percent of U.S. residents can buy Internet access at speeds of 3 Mbps or greater and upload speeds of 768 kbps or greater.

About 91 percent of U.S. residents can buy access at 10 Mbps downstream. Some 78 percent can buy access services operating at 25 Mbps downstream.

Also, about 81 percent of U.S. residents can buy mobile broadband access at speeds of 6 Mbps or greater.

And nearly 26 percent of the population can buy fixed wireless service with download speeds at 6 Mbps.

The challenges of spurring wider adoption of the fastest speed services are different than the challenges of ensuring minimum levels of universal service, though. The former is a “demand” issue, while the latter is a “supply” issue.

Most observers would tend to agree that demand for gigabit networks is uneven, so the real issue is finding willing buyers. Universal service tends much more to be a supply issue, since the issue is the cost of supplying capacity in rural areas.




Edited by Alisen Downey
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