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The Narrowing of Broadband

Week of April 2, 2002
The party's almost over.

1.5Mbps? You're about to lose it. It's part of the way providers finance your connection.

The push to DSL has been massive - nearly half of all connections today are broadband - and users are currently experiencing far better response times than with their dialup modems, but a part of the speed comes from the fact that the rest of the world is still on dialup. Once everyone moves to DSL, response times will come back down to where they used to be - or even worse.

DSL providers multiplex their lines at untenable use ratios. Voice relied on 1:8 or 1:10 - only one of every eight or ten users make a call at a given point in time - but DSL providers got very cynical very fast. They're losing their shirts on voice service, and all because of dialup Internet access. This led them to:

  1. install as much heavy duty dialup equipment as possible; and
  2. convert as much of the voice infrastructure to VoIP as possible.

Which saved them millions on CO switch ports.

But then along came DSL, which required another expensive capital outlay. The problem is that local phone service is expensive. Long distance service is where the money is made, or was - with Sprint offering 5 cents a minute, everybody is hurting these days. But still, long distance has a higher profit margin than local service. This is why RBOCs push voice mail, caller ID, etc. - it increases profits for a minimal outlay.

But DSL is a different matter. It requires an ATM infrastructure, and ATM is expensive. Most carriers have run ATM for years, but now ATM is required on a much larger scale - out to the edge, not just across the backbone. DSLAMs aren't cheap. Engineers who understand TCP/IP and IP networking aren't cheap either. The RBOCs saw their debt load getting worse.

The easy way to cut corners is with the use ratio. 1:8 and 1:10 have been abandoned. Today most use 1:36, and many are moving to 1:48, while some are even looking at 1:60.

So your blistering 1.5Mbps won't be around much longer. You'll have 144Kbps and not much more, and you'll be sharing that broadband line with twenty to thirty other increasingly frustrated users.

Of course you'll be able to get your precious 1.5Mbps back again, if you submit to yet another price hike.

The party's almost over.

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