John, RE: He explained how broadband needs to become as much a priority everywhere as it is in countries such as Korea and Japan, and needs to be truly high speed -- 5, 10 or even 100 megabits per second -- to provide customers with an unprecedented ability to conduct commerce, share information and experience high-value content.
In this statement, Barrett ignores the primary reason that broadband IS a priority in Korea and Japan--population density.
Running fiber to the curb is an expensive proposition. To justify this expense, you have to be able to project a very large revenue stream per strand of fiber. With Japan's high population density, the high capacity of fiber can be fully used, and making the capital expense to run fiber to the curb can be justified. Thus, the average Japanese consumer can get a pretty reasonably priced broadband service and still give the provider a chance at making a profit.
Here in the US, with a few exceptions, we have a spread out population. Even in areas that most in the US think of as highly dense (such as my current environs), the population density isn't close to what is the average in Japan. Thus, providers have a hard time even projecting a profit in the future. You either have to charge a price beyond the average consumer's reach (and thus never reach critical mass), or, if you attempt to price the service to reach a critical mass, you have a cash burn that the markets are no longer willing to subsidize with either debt or equity. Thus, we have a broadband Catch-22.
To me, the solution is to find a way to reduce the capital cost of expanding broadband availability. That in turn will allow providers to lower the price point to a place that they finally can generate volume. And that solution leads me to wireless solutions.
Think about the voice side of the equation. For years, the voice industry was almost zero growth. Developed areas were well-penetrated, and undeveloped areas just couldn't find the capital. With the advent of cell phones, voice communications in the third world have exploded. The same could happen with data communications.
I'm still trying to figure out where to go with this. Teligent, Winstar, and ARTT went broke exploring this solution, which raises the probability that I am just flat wrong with this solution. I think that the technology just wasn't advanced enough, though, rather than there being an inherent problem with the solution. I still think that broadband will become prevalent when we find a firm that comes up with a technology that delivers a dependable, inexpensive wireless solution to consumers. |
