On the (distant) horizon: really cheap, really fast broadband

Hong Kong has far cheaper and faster broadband than US cities. More competition may open things up.
Written by Joe McKendrick, Contributing Writer

In Hong Kong, residents and companies now have access to 1,000-megabit-per-second broadband (a "gig") for about $26 a month. That's far more and far cheaper than the highest rates offered in the United States, which top out at 50 megabits per second.

The New York Times reports that an upstart company called Hong Kong Broadband now offers these service levels to the densely packed semi-autonomous city state.

It could happen here, as well -- if the telecom environment were more competitive, as the article observes:

"Inexpensive pricing of gigabit broadband is practical in American cities, too. 'This is an eminently replicable model,' says Benoit Felten, a co-founder of Diffraction Analysis, a consulting business based in Paris. 'But not by someone who already owns a network — unless they’re willing to scrap the network.'  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. But it would also require regulatory changes that the Federal Communications Commission has yet to show an appetite for."

In an interesting twist, the article also observes that two non-telecom companies -- an electric utility and a Web 2.0 search engine company -- are offering cheap gig service to small limited audiences within the United States.

The search engine provider -- yes, you guessed it, Google -- said last year that it intends to "build and test ultra high-speed broadband networks in a small number of trial locations across the United States," potentially reaching up to 500,000 people.  Stay tuned.

Of course, it may take time before many people and companies actually have a need for such high speeds -- just as the telecom industry overbuilt in the late 1990s, well ahead of demand. But with the rise of Big Data, cloud computing, mobile computing and social everything, it may not be too long before the additional bandwidth is rapidly gobbled up.

This post was originally published on Smartplanet.com

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