The U.S. is Falling Drastically Behind in Broadband Speed: Don't Let AT&T Fool (Lie to) You

Implications: The U.S. has been drifting farther and farther behind Asia and Europe in broadband speed, and failure to innovate has been the punishment.  AT&T may have spent too much on their CapEx to make further investments, but that doesn't mean that consumers aren't ready and longing for the broadband advancements.  Build the high-speed bridge, and they (consumers, businesses, applications) will come.

Analysis:

If you want to predict consumer demand and usage, never ever ask a pipe provider their viewpoint.  The wireless carriers, Internet providers, and MSOs have consistently underestimated consumer usage, and they are doing the same thing today.  AT&T is just dead wrong.  Currently, Japan, South Korea, and Europe are literally destroying the United States in broadband speeds (Japan is 8 to 30 times the speed of the U.S. at a cheaper price), and full-screen IPTV, high-definition teleconferencing, and telecommuting have grown by leaps and bounds due to these speeds.  The United States is in danger of falling behind these countries in many facets if we do not increase our bandwidth, as users need this speed to access the useful and exciting applications of the future.  The U.S. is in danger if AT&T’s mentality is pushed to the forefront as opposed to Verizon.

 

Here are a couple examples, among many, of huge mis-hits by the pipe providers…

 

Example One – AOL and the dial-up Internet

AOL basically owned the Internet a decade ago, with the large majority of home Internet users accessing the Internet through their dial-up service.  They assumed they could hold out for a long period, and slowly charge additional fees for their “superior” broadband product.  They were wrong.  Consumers flocked in droves to the quicker pipe and away from dial-up access, hastening AOL’s rapid descent from fame.  Consumers hungered for the improved experience and quickly fulfilled their latent demand.

 

Example Two – Wireless Carriers and the iPhone

Having spent several years inside Sprint Nextel and heading up sales and marketing for a multi-carrier wireless company, I was constantly told by the knowledgeable carriers that consumers wouldn’t access the Internet on the small screen, that they didn’t require fast data speeds at the moment.  Eventually, perhaps, but it would take awhile.  Then, along comes the Apple iPhone, and, again, people are flocking in droves to the product and to the Internet.  Within seven months after introduction and with only 2% of the smartphone market, the iPhone’s Safari browser overtook all other Internet browsers in the U.S. market and is quickly gaining on Nokia’s Symbian platform globally.  Even with the weak, pre-3G AT&T Edge network (along with speedy WiFi), consumers are hungering for the interactive data.  And, once the 3G version comes out, I guarantee that Internet usage will take another huge jump and important applications will be written for this product.  No, it wasn’t just the speed in this case – it was the combination of user interface, beauty of product, applications, and WiFi – but speed is integral to accelerating growth.  And the wireless carriers and other handset manufacturers, especially Motorola, had this one dead wrong.