On Friday, the FCC released its seventh annual report on the status of broadband deployment in the United States, and the news isn’t looking good for broadband Internet Service Providers.
The FCC’s report estimated that “26.2 million Americans living in more than 9.2 million households are unserved by broadband today” (p 15). In addition, on page 90 they determined that the broadband adoption rate of broadband in the US is around 67 percent. That doesn’t sound too bad until you realize that there are countries with much higher adoption rates. The report itself cites that South Korea and Singapore have 90% adoption rates.
Ars Technica noted some interesting facts about this report. The most interesting tidbit I found is that the FCC defines 4 Mbps download speeds as the minimum to be considered broadband when there are many companies that have a lot of plans with less than 4 Mbps. AT&T’s DSL Internet Service only offers one service level that meets this standard, and due to the nature of DSL it isn’t uncommon to get significantly less than that speed. Likewise, Comcast and Charter Communications have offerings below 4 Mbps – and likely have a large number of customers that subscribe to those lower tiers.
To no surprise to consumers, one of the largest issues that most people cite with getting broadband service is the high cost of service. Broadband Internet is expensive. That said, I’ve got one simple question.
If none of the money we pay is going toward network expansion – what is the money going toward? Let me put it this way: on what planet does it make sense for a company not to put any money toward expanding its user base or improving its product?
I feel like there are some executives that need to be answering questions like this.