I got an email today from a friend of mine decrying the state of broadband competition in our county. Here's her comment (I've masked the named providers - it doesn't matter what names you put in there, this probably applies to your area):
So like most people I despise **** and ******* with a special level of passion that words cannot describe. The problem is that they hold us hostage for internet service. I'd love to find a way around them, but I want to make sure I'm not short-sided and wind up calling them in 6 months.
Well said.
If you have high speed Internet at home, you are probably getting it from either your local phone company (telco) or your local cable provider. Those are your two choices (unless you are opting for commercial service - we will deal with that later). While they seem to be competing for your business, in reality, there is no competition.
Why is this?
In a blog post named "The case for community broadband", Thirdpipe contends that any competition that might have existed between the national telephone companies and the cable companies has fallen by the wayside as the telcos have shifted their focus to wireless offerings. Basically, the cable companies are able to provide much higher bandwidth through their network than the telcos are able to provide. Since the telcos are unable to compete on bandwidth, they diversify into wireless.
So at this point, your choices are:
- the local cable company or
- a questionably committed telco.
This is bad, particularly when companies like Comcast plan to throttle their customers' usage. As services such as online backup (pretty important, in my mind), various other cloud services and streaming video are ramping up, the Internet service providers are choking down data usage - effectively preventing some pretty useful stuff from getting broad distribution.
What about wireless?
Great question! As mentioned, the telcos are diversifying into this space. Good news, right? Not so fast.
First, two of the same telcos that are unable to compete with the cable companies also operate the two largest wireless networks. The second largest network (AT&T) is currently in the process of trying to absorb the fourth largest (TMobile)... which would make it the largest. This means less competition, less competition means less innovation and higher prices.
Second - wireless providers, concerned about their own profits, are increasingly introducing bandwidth caps; ostensibly to keep the bandwidth available for everyone. In fairness, AT&T famously drew a lot of fire for not being able to serve their iPhone customers - people who brought a whole new dimension of cell phone usage to AT&T's aging network.
Smart phone users are indeed a breed apart - they have caused AT&T to complain about its own customers. If you add home usage to a network that was unprepared for just the iPhone's unique usage you will have connection problems of massive proportions. It's possible that cell networks simply aren't prepared for the load - or if they are, the wireless providers are creating an artificial shortage of bandwidth.
The latter would be short sighted, but would make sense in a world where the telcos are unwilling or unable to provide a real alternative to cable companies. Like most businesses, they are trying to squeeze as much out of their technology investment as they can. It's understandable. However, the company's business model is based on renting out that technology. As impossible as it sounds, they have to keep up with the demands of their clients. The network should be designed for capacity.
One bright spot - Sprint, currently the #3 wireless provider, is looking to provide competition via partnership with either Clearwire or LightSquared (but most likely LightSquared). The bad news is, this is still in the works - it's nothing tangible for the question posed today.
But what about the commercial offerings?
There is a lot more competition for commercial customers. Unfortunately, these offerings are usually not up to the same data speeds as the national providers' residential plans and they end up being more costly. However, if you use them at their strengths (bundling telephone and Internet - sometimes with other services) you may find much better customer service for a comparable price.
Locally, we have (in alphabetical order) Blue Rooster Telecom, Norcast Networks, Telepacific and Utility Telephone.
The commercial offerings provided by the national companies often have a different support group assigned to them, so the customer experience (particularly when problems arise) can often be somewhat better than their residential counterparts.
In the end, I told my frustrated friend that she would have to go with one or the other of the major national providers. She is not looking for a commercial offering, this is exclusively for her home. Understandably, this news was met with disappointment. Until real competition shows up we will all continue to be frustrated.
Wednesday, October 26, 2011 at 11:15PM 