Why America Is Not a World Leader in Broadband

According to an article in the New York Times, “In the United States, costs would come down if several companies shared the financial burden of putting fiber into the ground and then competed on the basis of services built on top of the shared assets. That would bring multiple competitors into the picture, pushing down prices.”

This is a good article comparing the USA to Hong Kong

http://www.nytimes.com/2011/03/06/business/06digi.html?_r=1&hpw

I know Niq Lai, CFO City Telecom. We sat on a panel together at an Oppenheimer conference last year.

http://www.telecomramblings.com/2010/08/oppenheimers-fiber-infrastructure-panel/

Population density is one part, but geography is the other. Proximity factors in to costs. That’s why HK can have a gig for $26. Everyone is jammed in there.

Population Size in Sq KM Population/sq km
USA 307,006,550 9,372,610 33
Hong Kong 7,003,700 1095 6396

That’s quite a difference. The USA is a “country” and it is compared to other countries of much smaller size therefore they have an advantage when it comes to a capital plan for fiber to everything and real broadband everywhere.

Maybe a better comparison to Hong Kong in the USA would be the cities of New York, Los Angeles and Chicago

Population Size in Sq KM Population/sq km
NYC 8,391,881 1214 6913
LA 3,831,868 1290 2970
Chicago 2,851,268 606 4705
Hong Kong 7,003,700 1095 6396

NYC looks to be the closest in population and size, but is there a provider like City Telecom / HKBN in New York offering 1 Gig for $26 per month? No.

It is difficult to imagine how 8 million Gigs would get on to the public Internet even if there were such a service and provider. The end user might have 1 Gig of “broadband access” from their home, but they certainly would not have 1 Gig of “Internet Access”.

The Internet is a collection of networks and all links, the ends plus the middle (core) must have the capacity to deliver the speed, or the entire thing does not operate at the same rate.

Once people figure this out rational, logical discussions can begin to occur.

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