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What We Can Learn from South Korea

I recently returned from Seoul, South Korea, where I gave the keynote address at the 2012 KISDI International Conference. My talk, “The Next Generation of the Internet—Revolutionizing the Way We Work, Live, Play, and Learn,” focused on the key trends shaping the next generation of the Internet and the implications for players in the ITC industry and government policy/regulation. However, based on what I observed in Seoul, much of the future has already arrived in South Korea.

Besides the ultra-modern skyscrapers of Seoul, South Korea has the highest domestic penetration rate of Read More »

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Private or Public Sector: Who Should Deploy Broadband?

By Howard Baldwin, Contributing Columnist

Google’s experiment in laying broadband fiber in Kansas City, Missouri revives the old question of who should deploy broadband technology: the public sector, the private sector, or an entity based on a public utility model?

Municipally deployed broadband (like its previous sibling, municipal Wi-Fi) continues to be somewhat problematic. A recent audit for the Utah Telecommunications Open Infrastructure Agency, the optimistically named UTOPIA in the Salt Lake City suburbs, shows that the consortium is still waiting for broadband to catch on in order to pay back its bonds.

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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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