Wednesday, November 9, 2011

Ofcom Warns of "Low Interest" in Super Fast Broadband

Ofcom chief Ed Richards has warned that cash-strapped U.K. consumers lack enough incentive from access providers to upgrade to "superfast" broadband packages. In other words, "prices are too high."

"For superfast broadband, subscriber numbers are still low, perhaps because the nearest thing we have found to a ‘killer app’ so far is the demands of the multi-user household," Richards said. "The fact that we cannot identify specific ‘killer apps’ beyond bandwidth hungry teenagers is in some ways beside the point." Ofcom boss warns of low interest in 'superfast' broadband

That argument illustrates an important, and sometimes overlooked, aspect of national broadband plans. Some supporters of faster broadband think the "problem" is availability. But there is a mounting amount of evidence that "availability" is not the problem.

For whatever reason, including compelling applications or prices, where super fast broadband is available, and a workable definition is access at 50 Mbps or 100 Mbps at the moment, demand has tended to be low, even in some markets, such as Singapore, where prices are low, by global standards.

Time Warner Cable in early 2010 had about nine million high-speed access customers. It had about 20,000 customers for its fastest DOCSIS 3.0 service, which depending on configuration can support speeds up to about 43 Mbps per 6 MHz channel in the downstream direction, or more, if more bandwidth is made available.

All that means is that few customers are willing to pay $100 a month or more to get really-fast broadband access running at speeds of about 50 Mbps maximum. Low demand for 50 Mbps?

Fiber access does not sell itself, BT has found. As it begins to market its new fiber-based access services, BT has found that consumer demand for 40 Mbps Internet access is less robust than some had anticipated.

"Cardiff has been given a head start by Openreach but some fiber-enabled parts of the city are proving to be a bit slow out of the blocks to take up the opportunities fibre presents," said Richard Hall,BT Openreach NGA Deployment Director for Wales. BT UK Frustrated by Lack of Superfast FTTC Broadband Uptake

"With the notable exception of Whitchurch, residents are proving slow to take advantage of the technology on their doorstep and so we are working with the local council to raise awareness and drive demand," he said.

In the U.S. market, service providers have not fared much better with sales of 50 Mbps or faster services, which largely remain products bought by business customers. Another typical U.S. market issue also could be a factor. Customers in these areas already can buy fast service from Virgin Media.

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