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Tracey E.Schelmetic

[January 9, 2002]

Dot Com Commerce

By Tracey E. Schelmetic
Managing Editor, CUSTOMER INTER@CTION Solutions


Let Them Eat 56K

I have become Marie Antoinette when it comes to Internet access. Well nothing about cake, and I certainly don't consider my friends peasants, but I've suddenly realized how many of them, and my family members, are still dialing up for Internet access. I've heard myself saying things like, "56K? Too slow! I won't bother checking the movie timeswe'll just take a chance that there's a 3:00 PM matinee."

For, you see, I have a cable modem, and life is good. I know I'm in trouble when I get impatient with the "snail's pace" of the office's shared T1 connection. My name is Tracey and I have a problem: I have become a bandwidth snob. Like a properly indoctrinated devotee, I preach the benefits of home broadband to anyone who will listen. It's not hard. My parents are planning a trip to Europe at the end of 2002. Once a month, they come over bearing dinner in the form of a roast chicken or a casserole. Though my parents love me, this is actually a clever ploy. What they really want is my high-speed Internet access to check flight prices, look at hotel Web sites, examine menus at restaurants in Budapest or look at train times from Venice to Vienna. I'm ruthless. I remind them that with their own cable modem, they could research which restaurant has the best Wienerschnitzel in Austria any time they want. They could even join the Online Wienerschnitzel Appreciation Chat Forum, if they wished.

While watching a movie at home with friends recently, I called up the Internet Movie Database to provide an answer to that perennial question, "What other film have I seen that actor in?" I had the answer -- complete with a photo, birth date and a biography of the thespian in question -- within 12 seconds. My friends gaped in awe. They marveled at the lack of screeching modem dial-up noises. Waves of broadband envy permeated my living room.

I am one of only 11 or 13 percent of Americans (according to Cahner's InStat and Forbes magazine, respectively; take your pick) that has linked my home to broadband services. While estimates run between 53 to 58 percent of Americans having some type of connection to the Internet, only about 18 percent of these connections are broadband. Though the pipes are there in most cases, the industry is having a hard time overcoming what they refer to as "the last mile" the distance between their pipes and the back of your computer. As the old adage might go (if I mangled it a bit), you can lead a consumer to broadband, but you can't make him install a cable modem.

This, plus the partial failure of the Telecommunications Act of 1996 -- which among other things strong-armed the regional Baby Bells (Regional Bell Operating Companies, or RBOCs) into opening their networks to up-and-coming CLECs (Competitive Local Exchange Carriers), many of which have subsequently gone bust -- has kept household broadband consumption's growth rates unimpressive. Not even the perceived convenience of bundled services (one rate and bill for television, phone and Internet access) that can be offered by some providers has been enough to usher in the kind of growth imagined (and hoped for) by the industry in the mid-1990s. This may change if Congress can see fit to pass last year's proposed Tauzin-Dingell bill, otherwise known as the Internet Freedom and Broadband Deployment Act of 2001, which would allow the RBOCs to provide customers with broadband services across long-distance borders that were formerly (and to date, still are) unbreachable by regulatory laws. For more information about this bill, read the excellent column "Broadband Deregulation, In The Name Of Choice" written by my colleague Laura Guevin.

If the growth rates for home cable and DSL subscriptions have remained sluggish, satellite and wireless broadband service subscriptions are barely creeping along, probably due to their not inconsiderable cost, their dicey reliability due to the constraints of physics and the ever-present lack of standardization for these technologies.

The increased penetration of home broadband will directly affect certain other markets, as well. IP media servers and storage, for streaming, can only grow as fast as the demand and the means to deliver it. Streaming audio and video have often been cited as a top use of home broadband (much to the chagrin of the entertainment industry, I am certain. It's a lawyer's love call to Sony and the Recording Industry Association of America and their battalions of high-priced and paid-to-be-indignant attorneys.).

Internet radio, in particular, is an industry whose growth is very dependent on home broadband access. Why only at home? Try streaming a long-distance radio station on your computer at work and start a stopwatch. If it takes your MIS department more than ten minutes to call you and kindly but firmly request that you cease and desist hogging the company pipes, it would surprise me. Above and beyond streaming Internet radio at home, or even via PDA or cell phone, is another market which has been dancing on the horizon for some time satellite and Internet radio for the car. (It' s unlikely that anyone resistant to installing broadband at home would consider it for the car.) In any case, consumers might never have a choice. The U.S. government has been toying with the imposition of fees (for copyright purposes) on radio stations that broadcast via the Internet, which may nip the technology in the bud for a good long time. (Somehow, I can't help wondering if Metallica, eagerly clutching the death certificate of Napster in its collective sweaty palm, is partially behind this one.)

Part of the problem, in my opinion, is that the U.S. government needs to make up its mind... does it want to promote consumer broadband access? Or will it call for all American consumers to be able to attain high-speed Internet connections, only to regulate the content delivered via broadband to such an extend that the content providers cannot afford to offer it? What would that leave us with? The ability to have a real-time face-to-face chat via Web cam with our seldom-seen cousins? I love my cousins, but I don't want them cybernetically lurking around my living room every night.

After all, I've already got my parents sitting around surfing for sauerkraut.

Metallica fans angry at how often the author takes swipes at their favorite band may flame her at tschelmetic@tmcnet.com.


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