In the wake of the debate around network management at the FCC, one of the issues that has been getting lots of attention is network capacity and speed.  Some of the commentary around the FCC’s decision in this case focused on the emerging issue of bandwidth caps and usage caps.  There was also lots of discussion about the importance of having more high capacity networks deployed.  The implication of many of these comments is that we have not made as much progress as we should in deploying high capacity broadband networks.

This is one instance where looking back historically at where we have been is instructive.  I have long believed that Internet connection speeds for consumers are linked with both applications and services and the capability of the devices that hook to the Internet connections, largely PCs at present (although we are certainly going to see more and more new digital devices – like TVs – hooking up to broadband networks too).  If you look back at the historical development of broadband, applications/services, and PCs, you do see a synergy and linkage that is undeniable.   It is clear that broadband providers do respond to market demand as more capable PCs are marketed and more robust and complex applications and software emerge. This is happening now as video surges on the Net and as more and more video presentations are uploaded. 

To take this history tour, I first went back and looked at my past experience connecting to the Internet.  I had one of the early PCs, made by Timex, and went on to own Commodore’s, Radio Shack machines and a wide variety of PC clones.  I loved Macs but our company never went for them so I stuck with PCs.   I connected to online services (I started with Prodigy and then migrated to AOL) using dial up modems sometime in the early 1980’s. 

Broadband networks emerged in the late 90’s built around ADSL and cable modem technologies.  This was somewhat surprising to some of us as we had been involved for some time with ISDN technology which many saw at the time as the future broadband technology.  The telcos were often criticized for not rolling out ADSL as quickly as cable companies deployed their own version of broadband.  The criticism was that ADSL was developed and then “sat on the shelves” gathering dust.  Going back and looking at the history, however, reveals that we had been using ADSL for three or four years before the advent of the World Wide Web.  We were adapting it for on demand video which at that time was thought to be the underpinnings of the “Information Superhighway”.  Once we saw the web, ADSL was repurposed for web access but we had “proved it in” during our on demand video trials of the early 90’s.

The history of any industry can get hazy with time.   The tendency to view “then” through the prism of “now” usually happens spontaneously, without our awareness.    I think it is important to understand just how far we have come because we can make mistakes in policy by misremembering the facts.    

So, as a reminder of how much has changed and how fast, here is the table I’ve put together about the history of Internet access and broadband.  My thanks to Larry Plumb on my staff for helping me fill in the gaps in this chart:

Unimaginable Change in Just 3 Decades

The chart tells the story of how advances in information and communications technology have given rise in under 30 years to a trillion dollar, world-wide industry from a starting point of virtually zero.  

The world’s first consumer email service was launched in 1979, in the U.S.  The content was text and numbers only.   No images, sound or movement.  The email service was provided by a new breed of “information service providers.”  The service was reached with the use of a primitive personal computer and a 300 baud modem over a phone line provided by the Bell System monopoly.  No one had a cell phone; such things didn’t exist.  And only 18 million U.S. homes were wired for cable TV in 1979.   

Today . . . . 60 million U.S. households wired with broadband, and more than half by cable companies.  Broadband connectivity has grown more than 300% in four years.  Wireless broadband coming on fast, from multiple providers.  Huge online businesses with hundreds of billions of dollars in market capitalization, like Amazon.com, eBay and Google. Hundreds of new gadgets and consumer devices with more on the way. 

And what may amaze some is how broadband speeds have continuously advanced.   If you do the math, speeds have nearly doubled every 20 months or so.   I didn’t realize it when I did this analysis but Jakob Nielsen first suggested that broadband speeds would increase by 50% annually (and therefore approximately double every two years) in a piece he did way back in 1998 (and has since revised and updated).  Of course, not everywhere can get our FiOS 50/20 meg service but I have little doubt that what we are doing is driving cable and other providers to respond.    And our 50 meg service is actually more than double what cable had offered as its top end service just the year before.

“Virtuous Circle” has Taken Hold

It took about eight years for U.S. broadband penetration to reach 18 million households after Netscape’s IPO in 1995 and the arrival of point-and-click access to the content on the World Wide Web that was enabled by its browser.  More than two-thirds of those 18 million connected via the cable broadband lines that were deregulated during that time.  But it’s taken less than four years to add the next 40 million households following complete broadband deregulation in 2003.

Meanwhile, the deployment and penetration of broadband has been a major factor in the success of U.S.-based companies like Google, Amazon, YouTube and eBay.  As InformationWeek put it, “What many had dreamed would happen during the go-go days of the Internet boom in the late 1990s is being realized now: the creation of viable IT-based businesses that exploit the Internet platform. Back then, investors pumped billions of dollars into Net-based ventures only to see their equity evaporate into the ether of the dot-com implosion. Now, with tens of millions of consumers having broadband access, and open-source tools such as XML and Really Simple Syndication, businesses that were a mere pipe dream five years ago can become viable.”

The growing demand for broadband driven by today’s increasingly video-intensive applications, coupled with public policies that encourage network providers to respond to this demand, has spurred investments in network deployment and advanced broadband in local networks to grow 40% in the last four years in the U.S.   This country is now benefiting from the largest infrastructure deployment made in recent history.   The demand for the capacity offered by fiber to the home technology in the U. S. is growing and the U. S. is one of the leaders in fiber networks.      

I have argued – and others have reiterated the point – that capacity alone will not solve all problems for consumers online.   But is sure helps solve many of them.  It is important that we continue to see advances in network capacity and speed on a steady basis.  I believe our FiOS deployment is helping to drive the market for broadband and is setting the pace for the future.  We’ve already seen remarkable advances in applications and online services as the broadband uptake has reached mass market levels and as speeds have increased.  FiOS provides a platform for even more advances, especially in services that require high levels of upstream capacity such as advanced telemedicine and educational services.  To me, these applications are where some of the important payoffs for society will take place.  As these broadband platforms become widespread, we will see more and more applications like these emerge.