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July 02, 2013

US Broadband Problem is a Myth

By Gary Kim, Contributing Editor

Strand Consult is the latest market research firm to counter the oft-repeated opinion that the U.S. market is significantly “behind” in broadband availability, speeds and prices. A new analysis by Strand Consult suggests that the U.S. market is advancing faster, not falling behind. The U.S. market leads in deployment of Long Term Evolution, the latest generation of mobile networks, for example.  



Nor are consumer prices out of line, with ISPs reaping unusually high profits. In reality, Strand Consult says, consumers are able to buy broadband Internet access packages at all budget levels.

Also, financial returns of U.S. ISPs are in line with the rest of the world, Strand Consult says.

Nor, the firm says, is it true that there is insufficient competition in the U.S. market. The reality is that U.S. consumers “enjoy robust competition between different types of network providers.”

On the other hand, Strand Consult also points out that raw speed is really not the measure of usefulness. Though one might make the argument that “faster is better,” value comes from “the way that you use it.”

There is also not much of an actual inability to buy broadband. “Almost every American who wants broadband can get it,” Strand Consult argues.

In fact, Strand Consult goes on to argue that there are no applications U.S. consumers presently are missing out on, because high speeds are not available. As a practical matter, applications are developed to run within the current market context. Over time, those standards change, of course. When the typical speed available is 10 times faster than now, apps will be designed with those speeds in mind.

In fact, supplied bandwidth is growing faster than the demand for it. “In practice, it is often difficult for operators to sell the highest speeds to their customers,” Strand Consult notes.

In rural U.S. markets, for example, bandwidth demand (ignoring “supply,” for the moment) remains quite modest. One respondent to a survey conducted by NTCA, the rural trade association, found that “out of 1,200 customers, only five take the 10 Mbps package and none are taking anything faster.”

The point is that there are growing voices from the analyst community suggesting that broadband actually is not a huge problem in the U.S. market, overall. On the contrary, development is accelerating.




Edited by Alisen Downey
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