When Akamai missed earnings estimates yesterday, they not only cited a slowing economy but also U.S. broadband bandwidth as a reason for poor earnings and forecasts. This brings up the serious issue of broadband infrastructure in the U.S. and the repercussions of ignoring a system that needs to be upgraded.
Akamai CEO Paul Sagan stated that unless broadband speeds increase, growth will taper off because consumption will have no room to grow. And according to a study conducted by Nemertes Research in 2007, US broadband will reach maximum capacity in 2010 unless there is a 60%-70% increase in infrastructure investment. It’s really surprising that none of our leaders actively speak out on the subject since it has the ability to weaken the role of the U.S. in the world economy.
From this map of average broadband speeds by country, we can see where the U.S. lies when it comes to global broadband speeds.
As you can see, average broadband speeds in the U.S. are around 5 megabits per second, compared to 1st place Japan, which is around 60 megabits per second. Even Canada, a country much larger than the United States in regards to land area has a faster average connection. So, why the mediocrity when it comes to average broadband speeds, especially considering it’s the most prosperous economy in the World?
The first reason could be attributed to the leap frog concept. The United States was one of the first countries to lay down internet infrastructure, so now it will be the oldest. Countries who have more recently adopted newer broadband technologies will have the edge when it comes to speed and bandwidth. The second reason could be contributed to influential leaders and politicians not comprehending the severity of broadband infrastructure in the country right now. For example, neither presidential candidate considers broadband policy a major part of their campaign platform.
Serious investment into broadband infrastructure will be needed or else more companies like Akamai will start complaining about not being able to grow domestically because of bandwidth constraints, and look for other markets.
I don’t quite get it. How will increased bandwidth increase consumption?
i never thought that this could weaken the U.S. in the world. but you make a valid point.
@AK In Akamai’s case, the lack of bandwidth is directly effecting the amount of content they can get out to consumers. If bandwidth was increased, you would see an increase in consumption due to the fact that supply will then equal demand.
Is it really that straight-forward? Couldn’t one argue that online consumption would come at the expense of ‘offline’ consumption?
I do get that increased bandwidth would hugely benefit Akamai and the entire web-industry in the US and wlsewhere (which isn’t a bad thing)
Isn’t it true we’ve already paid for more bandwidth that was never delivered? Didn’t the phone companies strike a deal with the the US government to keep the fees from their add-on services like caller ID, call waiting, etc. in exchange for them using that money to expand the broadband network? I heard about this several years ago on a PBS show like Front Line or similar.
50-100meg speeds in the US are only 12-18 months away.