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Broadband Infrastructure: Should Rural Investment Be a Priority?

By Howard Baldwin, Contributing Columnist

Sometimes those promoting extensive infrastructure projects — broadband or otherwise — exhibit a Field of Dreams mentality: “If you build it, they will come.” My own state of California is currently wrestling with such a project, a $68 billion high-speed rail line that opponents claim is too expensive and will never pay for itself. My attitude: come the day we have to evacuate San Francisco or Los Angeles after a major earthquake, people are going to be grateful it was built.

As we recently discussed in Broadband Backlash: Where It Comes From and How to Fix It, broadband deployments also have their detractors. Currently, one of the biggest areas of contention swirls around the value of rural broadband. There are really two sides of the story.

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If Bottled Water Prices Can Be Differentiated, So Can Broadband Access

By Roland Klemann, Cisco Internet Business Solutions Group (IBSG)

Demand for Internet services continues to build. The increasing popularity of smartphones, tablets, and video services is creating a “data tsunami” that threatens to overwhelm service providers’ networks.

So far, service providers have mainly reacted to the data flood with technical counter-measures—for example, by deploying Wi-Fi and small cells to offload data in heavy traffic areas such as sports stadiums and downtown urban areas. The Cisco Internet Business Solutions Group (IBSG) believes that operators should also act on the demand side, which can be best influenced by pricing.

Back in the early 2000s, network operators were clamoring to build their Internet customer base; they replaced their old metered models for dial-up Internet, and enticed new subscribers with unlimited, flat rate, “all-you-can-eat” broadband data plans. This pricing strategy has enabled mass-market penetration—first in fixed, then in mobile. But it has not increased ARPU.

While flat rate pricing plans have contributed to the waves of Internet data swamping the capacity of broadband operators, these plans have done little to create value from all that traffic. In fact, the decoupling of connectivity and service layers can destroy value if you compete on easily comparable flat rate access prices only. Flat rates shift the focus from quality and service differentiation to price competition, and expose operators to the risk of cost-plus-based pricing, with diminishing returns.

In some countries, fixed-broadband providers have started altering flat rates by introducing some forms of usage-based pricing: “throttling” data download speeds for the heaviest users, switching them to potentially more costly metered data plans, or introducing new tiered price plans. Just in the last few months in the United States, both Time Warner Cable and Comcast made announcements about their plans to experiment with usage-based pricing.

While usage-based pricing models are required to fight “bandwidth hogs,” they must be carefully introduced and managed. Customers have learned to love flat rates. The 2011 Cisco IBSG Connected Life Market Watch study found that Read More »

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Broadband Backlash: Where it Comes From and How To Fix it

By Howard Baldwin, Contributing Columnist

It’s easy to find positive news about broadband. Around the globe, government studies show the link between broadband and economic benefit. On the Connected Life Exchange, more examples abound, including my recent posts Broadband: Exploring the Demographic Patterns and How Broadband Reduces Small Business Expenses.

But it’s also becoming easy to find backlash against broadband. It’s neither limited by source or geography. In some cases, politicians rail against its cost; in other cases, citizens rail against its benefits. Read More »

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Beyond Broadband, Beyond Borders

By Howard Baldwin, Contributing Columnist

If you look at a digest of broadband news — as I frequently do in search of story ideas — it’s clear that broadband adoption is taking off. Google search a country name and “broadband,” and you’re more than likely to get an article proclaiming that its government, grasping the economic value of high-speed connectivity, is funding, or considering funding deployment to serve both its urban and rural citizens.

With more countries making that commitment, the world is truly creating what Cisco calls the borderless network.

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Living the Connected Life – in Tasmania, Australia

By Lionel Walters, Guest Columnist

I grew up in suburban Sydney and enjoyed many of the benefits and conveniences of life in a large and established community. I was close to family and friends, had easy access to basic services such as education and health care, and had an almost unlimited selection of entertainment and retail options. In those blissful days of my youth, I had everything I needed within a distance of a few short kilometers.

My situation changed somewhat when I started my career. For the first time I found myself joining thousands of others in a daily commute to inner Sydney. I’m sure I was not alone in feeling that the two hours of travel each day could be better spent in other pursuits, but like so many before me, I took it in stride because I believed it was the price to pay if I wanted to realize the Australian Dream.

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