For several years, policy wonks have debated the merits and demerits of two competing broadband policies, the “facilities-based competition” policy we have the U. S. and the “wholesale unbundling” or “open access” policy the Europeans favor. For a long time, it was thought that unbundling would yield lower prices at the expense of ongoing investment while robust facilities-based competition would yield better quality at higher prices.

Things are roughly going that way, but there’s an additional issue in terms of value for money. The average cell phone/broadband bill is lower in the  EU, but the quality is so much lower that the value per dollar tilts in favor of the U. S. even though the bill is a little higher. Americans consume four times as many cellular minutes and twice as much data usage over mobile networks than Europeans. We also have faster speeds.

On the wireline side, our speeds are higher than those all all but three EU nations: Latvia, Sweden, and the Czech Republic. Prices for middle tier broadband packages are lower in Europe, but the high-speed plans we have in the US on cable and FTTH networks aren’t available to most Europeans at any price.

So the Euros went for low prices and a semblance of competition over ADSL lines, while we went for ongoing network improvement.

It wasn’t obvious until recently, but the U. S. has won. Half of Europe still has no cable, and the only prospect for fiber in most EU nations is a massive subsidy program that most nations can’t afford. Europe can’t even upgrade their ADSL networks the way AT&T and Century Link are upgrading theirs to VDSL in the U. S., since shortening the copper loop when a dozen small ISPs are connected means a coordinated move.

That’s quite some dead end Europe has painted itself into.

•  The U. S. has picked up one place in the “Average Peak Connection Speed” that’s the best measurement of network capacity, rising from 14th to 13th as the measured peak connection speed increased from 29.6 Mbps to 31.5 Mbps.
• In terms of the “Average Connection Speed,” widely cited by analysts who don’t know what it means, the U. S. remains in 8th place world-wide. but we’re no longer tied for it as we were in the previous quarter; Sweden is right behind us on this one.
• In terms of “High Speed Broadband Adoption”, the proportion of IP addresses with an Average Connection Speed greater than 10 Mbps, we remain in 7th place, but now we’re tied with  Sweden.

Another notable trend is the continued increase in mobile traffic, about which Akamai’s partner Ericsson says: “the volume of mobile data traffic doubled from the fourth quarter of 2011 to the fourth quarter of 2012, and grew 28% between the third and fourth quarter of 2012.” This is a global figure.

The primary author of the Akamai report, David Belson, wrote a very helpful blog post last week explaining what the metrics mean, and I would commend it to any researcher who cares to understand what Akamai is measuring: it’s titled Clarifying State of the Internet Report Metrics. First, Belson explains the most widely misunderstood metric:

Average Connection Speed: As noted previously, this metric is calculated by taking an average of all of the connection speeds calculated during the quarter from the unique IP addresses determined to be in a specific country or U.S. state.  There are, however, a number of factors that can influence the average connection speed measurement:

• Parallel Requests: According to the latest figures (4/1/2013) available from the HTTPArchive project, the average Web page requires 90 requests for content.  As such, a browser will likely open multiple connections to Akamai for various pieces of content, such as the base HTML page, a shared Javascript, or one or more advertisements.  Given that these requests are all competing for a limited resource (the Internet connection’s bandwidth), each of these requests gets just a fraction of the overall resource, ultimately lowering the observed speed associated with each request.  (While these requests maybe sent over a single persistent connection from a browser to an Akamai server, they are each logged individually by Akamai.)
• Small Files: Many of the components that make up a modern Web page (such as images, CSS files, Javascript files, AJAX responses) are relatively small in comparison to software downloads and media files.  As such, the connection used to download these smaller files is often short-lived enough that it doesn’t exist long enough to reach maximum throughput rates.  (Think of it as being similar to driving on multiple short trips around your neighborhood on local roads vs. going on a multi-state roadtrip on the highway.)
• IP Address Sharing: In this increasingly hyperconnected world, a single user may have multiple Internet-connected devices, and an average household today certainly does, from smartphones, tablets, televisions, and gaming systems to thermostats and refrigerators.  If multiple devices behind a single Internet connection (unique IP address) are all consuming content simultaneously, then as highlighted above, each device will ultimately have access to just a fraction of the whole connection, ultimately lowering the overall speed calculated for each request to Akamai.  (Obviously, this is also true on a much larger scale for business connections, where requests from hundreds of users may appear to be coming from a single gateway IP address.)

One implication is that locales where highly concurrent browsers are widely used will show lower Average Connection Speeds even while users experience faster page loading. This is because newer browsers permit more connections. Here’s a comparison of some popular browsers:

What’s the point of this? The number in the right-hand column is a divisor that cuts your total network capacity down to the unit that Akamai measures in “Average Connection Speed” for browser sessions. So if you have a 50 Mbps connection (nice round number that represents what I have) and you use Internet Explorer 9, Akamai will observe an Average Connection Speed (ACS) for your IP address as low as 1/35 of the pipe’s capacity when you’re loading some web pages. In fact, it can get even lower than that if you’re loading small files that don’t last long enough for TCP to graduate from Slow Start (all TCP connections begin at an artificially low rate) and also if you’re sharing the IP address with other users, as you typically do at home and at work.

While some people argue that ACS is representative of “user experience,” Akamai’s description doesn’t say that at all: the concurrent connections are “competing for the same resource” in order to make the page load faster, but the more connections, the lower the measured speed. Hence, user experience is actually measured better by Average Peak Connection Speed (APCS) because it’s generally going to reflect a low divisor, probably one, while a long file transfer is going on.

I’m saying two things:

1. Akamai doesn’t measure page load times, only the load times of specific elements in a web page.
2. Fast page loads will show slower Akamai ACS scores with some browsers, especially Internet Explorer.

As more people gravitate to Firefox and Chrome, the ACS number will become more meaningful.  Firefox has already followed Chrome’s lead in limiting the number of parallel transfers, and IE is becoming more reasonable, although it has a way to go yet as it allow nearly twice as many parallel requests for pages that get content from multiple hosts (not uncommon for pages with ads.)

The APCS score is easier to understand; here’s what Belson says about it:

Average Peak Connection Speed: As noted previously, to calculate this metric, an average is taken of only the highest connection speed calculated from each unique IP address determined to be in a specific country or U.S. state.  Within the report, we note that we believe that the average peak connection speed is more representative of Internet connection capacity.  By using the fastest measurement observed from each unique IP address, we are capturing just those connections that reached maximum throughput rates.  Often, though not always, these connections are associated with the download of larger files, such as desktop applications, games, or software updates.  Furthermore, these connections are likely occurring late at night, or during some other period of lower usage, so while closer the theoretical maximum capacity of the connection, the measurements are unlikely to be representative of true throughput during normal conditions.  Furthermore, as an average, it will also mitigate the impact of the extremes – while there may be users connecting at Gigabit speeds in a given country, there will also be users connecting at dial-up, satellite, or DSL speeds.

How much this figure degrades during periods of high usage depends in part on the network technology in use; SamKnows finds that fiber and cable don’t degrade much at all, while DSL can degrade as much as 15%.

I continue to believe that High Broadband Connectivity is Akamai’s single most important measurement for policy purposes. Here’s what it means per Belson:

High Broadband Connectivity: As noted within the report, this metric represents the percentage of connections to the Akamai platform, from a given country or U.S. state within a given quarter, which connected at speeds of 10 Mbps or more.  In order to “qualify” for inclusion in the rankings within the quarterly report, more than 25,000 unique IP addresses from a given country needed to make requests to Akamai at speeds above 10 Mbps in that quarter.  This threshold was instituted to prevent much smaller countries, with significantly fewer unique IP addresses making requests to Akamai, from artificially outranking larger countries with more Internet users.  Note that the High Broadband threshold speed was 5 Mbps from 2008-2011, and changed to 10 Mbps starting with the 1st Quarter, 2012 State of the Internet Report.

So this number tells you what portion of the user population is able to enjoy commonly used high-speed applications.

So that’s all you need to know in order to understand the Akamai reports.

Predictions

I’d like to add some predictions based on recent developments in broadband services. Comcast recently doubled the speeds of their mid-range broadband plans and cut the price of their highest speed plan in half, so the 20% or so of American consumers who use Comcast will clock in at higher rates in 2Q 2013, two SOTI’s from now. Another item is the ongoing high rate of conversion from long-loop ADSL to the fiber-backed short loop VDSL2+ services provided by AT&T and Century Link, and yet another is higher speed versions of Verizon FiOS. All of that is on the consumer side, but the connections that Akamai looks at include the commercial ones as well, and that’s the market where the impact of new fiber optic services is most pronounced. So we’re not done yet.

(Cross-posted from High Tech Forum.)

There’s an ongoing debate about the number of Americans with meaningful choice among broadband providers. The answer depends on how you define the terms; it can range from less than half all the way up to 98 percent, although the low numbers demand some creative exclusions. If we limit broadband to wired systems provided by major providers, the answer the National Broadband Map provides is 85 percent, but this depends on a fairly loose definition of “broadband” in some cases. If you’re willing to include fixed wireless, you would have to count WISP connections and Clearwire, but there aren’t any good data on them. If you include mobile broadband, the number goes up to 98 percent, but you’re including service plans that currently have usage caps of 2 – 4 GB/month, which makes them challenging for video streaming but acceptable for web browsing and email. Throw increasingly capable satellite in the mix (Wild Blue now offers 12 Mbps over satellite for a low intro price of $50, but there’s a data cap) and we’re at 99 percent.

The FCC’s Internet Access Services: Status as of December 31, 2011 report issued in February, 2013, illustrates the slipperyness of the data. On page nine, the report shows a graph of wired/fixed wireless competition.

According to this finding, 94 percent of Americans have access to two or more providers offering 3 Mbps or more, just barely enough for Netflix, but only 32 percent have a choice for speeds greater than 10 Mbps, a nice speed to have.

If we expand the pool to include mobile networks, the picture changes quite a bit, as we see on the next page.

In this scenario, 85 percent of Americans have a choice of three or more providers at 3 Mbps and higher, and 47 percent have two or more providers at 10 Mbps and higher.

Note the date of the data: December 31, 2011. How much LTE was there when this data was captured? Most of it was MetroPCS’s pioneering build and the early stage of Verizon’s build. Today there is probably twice as much LTE that can go 10 Mbps and higher. But those data caps are still in place, so you have to take this with a grain of salt.

So how much competition and choice to America’s broadband users have? Clearly, it depends on how you define the terms, but there’s not really any way around the fact that we have more facilities-based competition than any other country, and that’s what counts. Selling access to an aging DSL network with no upgrade in sight – the norm in much of Europe – is more profitable than investing in fiber backhaul to shorten the copper loop, but not helpful in the long run.

In the 3¹/₂ years after false rumors started that the Obama administration was giving free cellphones to poor people — and six months after a racially charged video about it went viral — a once-obscure phone service subsidy is getting renewed scrutiny on Capitol Hill.

There are growing calls in Congress to end or drastically cut back Lifeline; later this month, the House Energy and Commerce Committee will hold a hearing that could help determine its fate.

“The program has nearly tripled in size from $800 million in 2009 to $2.2 billion per year in 2012,” the senior Republicans on the Energy and Commerce Committee wrote in a March 26 letter to the Democratic minority. “American taxpayers — and we as their elected representatives — need to know how much of this growth is because of waste, fraud and abuse.”

Lifeline was begun not by President Obama but under Ronald Reagan. It expanded to include cellphone service during the presidency of another Republican, George W. Bush.

The Lifeline program is a good and necessary thing. It was started under President Reagan because it’s necessary and reasonable to provide the poor and the infirm with basic telephone service even when they can’t afford it for reasons of health and safety. Poor people need the ability to report crimes, sick people need the ability to call ambulances, the elderly and isolated need the ability to stay in touch with family, the unemployed need the ability to seek and gain employment, and all people of limited means need the ability to contact emergency services during weather-related crises and when power goes out. These abilities benefit society as a whole, and they’re basic responsibilities we all share for those of our fellow citizens who are less well off than most of us.

There is no rational reason to limit Lifeline to wireline phones, and doing so will in fact delay the phaseout of Plain Old Telephone Service (POTS) and impair the transition to the Internet of the future.

All the rationales for Lifeline are enhanced if the program is shifted from wireline phones to mobile ones, especially those related to emergencies; the original Obamaphone was actually a Bush Katrinaphone, after all.

None of this is to say that that the program shouldn’t be scrutinized for fraud; it should, and there’s every likelihood that mobile Lifeline is being gamed by unscrupulous parties of several types. But there should be no question that basic communication capability is vital to the health, safety, and economic development of the nation.

We shouldn’t confuse Lifeline with the high-cost fund component of Universal Service, a program of rural subsidies that transfers money from telephone users in cities where living costs are high to rural areas where they’re low, without regard for the incomes of the parties involved. The high cost fund literally transfers money from the urban poor to the rich owners of Aspen ski lodges, an inexcusable subsidy. It’s perfectly sensible to apply some form of means testing for high cost fund subsidies, if not to absorb it wholesale into the Lifeline program. Advances in technology make it cheaper to provide telecom services – however we define “telecom” these days – in rural areas, and subsidies should reflect these advances. There has been an understanding for some time now that Lifeline should grow as the High Cost Fund shrinks.

The growth of the “Obamaphone” fund is one example of of this transition. Let’s not confuse poor people who use use basic 21st century communications services with welfare queens. There is no shortage of genuinely poor and needy people in America who need a little help from the rest of us, and we have an obligation to help. So by all means, attack the fraud but don’t turn America into a nation of insiders and outsiders in which the well-off spend their time abusing the needy.

Broadband, the Internet, telecom, media censorship and the other issues within the jurisdiction of the FCC are certainly important issues, and if they weren’t, organizations like ITIF and a host of others would not devote the time and trouble it takes to conduct painstaking research into the facts that define them. But to compare these issues to the civil rights movement is to trivialize the suffering brought on people of color in the American South by populist bullies and thugs such as Bull Connor, Lester (“Axehandle”) Maddox, George Wallace, and the KKK during the Jim Crow era and to reduce the heroism of the leaders of the Civil Rights movement to the status of bargain shoppers at the Dollar Store.

The synopsis of the speech goes like this: “I want to be chairperson of the FCC, but I would be a controversial nominee because the telecom companies don’t like me. I want 100 Mbps symmetrical broadband to every home in America, paid for by your tax dollars. President Johnson told Martin Luther King he couldn’t have a Voting Rights Act unless King could force LBJ to make it happen. You must force President Obama to put me in charge of the FCC so you can have broadband no faster than it is today but for a lower price.” See the video for yourself or read the transcript.

Martin Luther King is turning over in his grave at a high rate of speed at this very moment. I can only hope Congressman Lewis and the Evers and King families do not hear about this.

UPDATE:  See Randy May’s post on Crawford’s speech on the Free State Foundation blog. May highlights Crawford’s pretzel-like definition of the market for broadband services that she uses to justify her claim of a cable company monopoly:

Even though Professor Crawford may think otherwise, for most consumers, telephone company-provided high-speed broadband services provide a satisfactory alternative to those of cable operators, even in areas in which fiber technology is not employed.

In her Denver speech, Crawford made a very rare – for her – move of citing a number. This is unusual for her because factual assertions can be checked, while more mushy assertions such as her claim that Koreans regard the U. S. as a rural country can’t. Here’s the claim she made according to the transcript:

When it comes to wired internet access, cable has a lock – .2% of new high-speed Internet access subscriptions in the last three quarters of 2012 went to the local cable monopoly.

I think she means to say that only .2% of new subscriptions went to phone companies, and the other 99.8% went to “monopoly cable,” her usual claim. However we read it, it’s false. We covered the subscriber churn issue in The Whole Picture, and this is what we found:

The third quarter results show that cable is not growing at the expense of DSL as much as adding customers who previously were non-adopters. Cable added about 575,000 subscribers in the quarter, but telephone companies added a modest 5,000 new customers as well.

More interesting than the overall growth rates of cable and telephone-based broadband is the nature of the technologies that telephone-based broadband subscribers are choosing: AT&T and Verizon added 749,000 fiber-intensive subscribers (for U-verse and FiOS) in the quarter, while losing 799,000 DSL subscribers. Many of CenturyLink’s 44,000 new subscribers use a service similar to U-verse, although the data aren’t detailed enough to show the precise number.(page 37)

So cable is adding more subscribers than phone companies are, but there are more new fiber-based subscribers signing up at phone companies than there are new cable subscribers. For someone who touts the benefits of optical fiber (to an unreasonable degree, of course) the new fiber adds are the important item.

While the book presents a fascinating history of these amateur hackers and the efforts by Ma Bell to catch and reign them in, it also provides an important insight into STEM education. For these phreaks phone hacking was not something they were doing to be anti-social (at least most of the time), or something easy they were dabbling in in their spare time, it was a technically complex task they were passionate about; in fact in most cases, obsessive about it. Yet, they all had pursued this passion in spite of their formal education. For the education system provided them no space to follow this passion, despite the fact that many of these individuals became self-taught highly skilled network engineers.

It’s no different today, large numbers of young people are passionate — ”phreaks” if you will — about some aspect related to STEM, but like the original phone phreaks they must pursue these passions outside of formal schooling, where virtually all high schools and many colleges impose a daunting array of requirements and core curriculum based on the notion that they know best what students should learn, even if the students simply don’t care to learn it. This is likely why the High School Survey of Student Engagement found that two-thirds of American high school students are bored every day in class. Do we honestly think that people will learn STEM when they are bored?

As a result, fixing STEM education is not going to come from web campaigns to make it cool, from better qualified teachers, requiring more science courses, or from subjecting high schools to the creativity-killing regime of No Child Left Behind. It will come from embracing educational innovation and letting many many new models of education emerge, most built around the core principle of following student passions.

The Brits are taking some stick from European critics who wanted Ofcom to produce a more comprehensive ranking against the entire EU-27 and especially speed merchants Latvia, Netherlands, Bulgaria, Romania, and Sweden. In Ofcom’s defense, the report does include an appendix that provides data on the rest of the EU.

The report is especially interesting as it comes on the heels of our report, The Whole Picture: Where America’s Broadband Networks Really Stand, on the ranking of U. S. broadband versus other nations, especially those in the EU and the OECD.

The UK is the only nation other than the U. S. to publish SamKnows data on broadband speed, so the limited data it has on performance is directly relevant for us. As readers of our report will know, there are many methods of measuring broadband speed, each with its own pitfalls. For purposes of international comparisons over time, the only dataset worth consulting is the one gathered for Akamai’s quarterly “State of the Internet” reports, so we relied heavily on it for our report.

The Akamai data are not without ambiguity, however, as they report substantially different values for Average Peak Speed and Average Connection Speed. The first is the mean of the top speeds of all IP addresses they measure, and the second is the average speed across all connections made by all IP addresses. According to Akamai, the Average Peak measurement “is most representative of Internet connection capacity” and Average Connection Speed provides the best insight into user experience while performing a range of activities on a shared connection. In the most recent period, Akamai reports an Average Peak of 29.6 Mbps for the U. S., and an Average Connection Speed across all TCP sessions of 7.2 Mbps.

In contrast, the FCC’s SamKnows data (pages 5-6) shows U. S. has an average speed of 14.6 Mbps, right in the middle of the two Akamai measurements:

During the testing period for the August 2011 Report, the average speed tier was 11.1 Megabits per second (Mbps);  for this Report, it increased to 14.3 Mbps, an almost 30 percent increase in just one year. Because ISPs also did a better job in the testing period for this report of meeting or exceeding their advertised speeds, the actual increase in experienced speed by consumers was even greater than the increase in advertised speed—from 10.6 Mbps to 14.6 Mbps—an almost 38% improvement over the one year period.

The Ofcom report says that the UK’s average broadband speed, by the same SamKnows system the FCC uses, was 9.0 Mbps in May, 2012 and 6.8 Mbps in May, 2011. Over the same period, the U. S. increase was 38%, and the UK increase was 32%. American broadband networks are not only faster than those in the UK, they’re also improving more rapidly, or “getting faster faster.”

Source: SamKnows / Ofcom

The Ofcom reports shows that the UK leads the EU-5 in terms of “standard speed” broadband deployment, mobile deployment, Internet usage, and competition between both wired and mobile networks. It’s particularly noteworthy that the UK leads competitors in “regularly accessing the Internet,” and “buying goods or services” online. In terms of creating an ecosystem that can support continued Internet growth, these are key factors. Spreading the cost of networks across a large and engaged user population also helps keep end-user prices low.

The UK falls behind its rivals in the “superfast” network deployment and adoption, which the report defines as 30 Mbps. Despite the fact that the UK has moderately good cable modem deployment – 75 percent can buy it if they want – the market for higher speeds hasn’t developed.

Pricing doesn’t seem to be the problem, as Ofcom says 30 Mbps broadband is cheaper in the UK than in the rivals, but availability is, as it ranks third out of five in 30 Mbps deployment. The greater experience with the use of actual Internet services plays into this result as well, since we can’t ignore the fact that Britons are more sophisticated Internet users than the French, Germans, Spaniards, and Italians. Perhaps cost-conscious Brits don’t see the upgrade from 10 to 30 Mbps as valuable at any price. This reflects a pattern we found in global pricing, where the average price of the 5 – 20 Mbps tier is less than $2/month higher than the sub-5 Mbps tier. If consumers perceived greater value in higher speeds, we’d expect a greater disparity.

The market concentration figures are also noteworthy: America’s broadband gadflies tell us the market for wired and mobile broadband in the U. S. is dominated by monopolies, but our markets are actually less concentrated than those in Europe.

• America’s two leading mobile brands (Verizon Wireless and AT&T) control 32% and 30% of the market respectively, and in wired broadband the leading brands are even more dispersed, with Comcast at 23% and AT&T at 20%.
• In the UK, the leading mobile company has a 33% share and the leading wired company has 31%.

While the UK has the most competitive markets in the EU-5, U. S. broadband markets are even more competitive.

Competition doesn’t always lead to high speeds, low prices or high usage, despite another claim our gadflies like to make. The appendix shows that the lowest broadband prices in the entire EU are found in nations with very little Internet use, such as Lithuania, Romania, Latvia, and Bulgaria.

Source: VDMC / EC, Broadband Internet Access Cost, 2012.

The nations with low prices and low usage also tend to have high speeds, as you would expect. With the exception of Czechoslovakia, there was no cable TV in the Soviet satellite states, so the broadband infrastructure in the more Westernized parts of the former USSR is heavily weighted toward new networks with a lot of fiber. If the infrastructure is new but few use it, performance will be high and prices will tend to be low in order to induce new users to come on-board. The exception in this picture is Sweden (SE) where a new fiber net serves Stockholm high-rises for very low prices. There’s nothing like vertical living and government subsidies to keep that monthly bill low.

So what’s the UK going to do about its dismal standing in high-speed broadband? Some things are already moving:

• Virgin Media began a programme upgrading all its customers to higher-speed packages offering headline download speeds of 20, 30, 60 or 120Mbit/s;
• Openreach introduced FTTC plus VDSL technology that allows speeds of up to 80Mbit/s. It also introduced FTTP lines that allow up to 330Mbit/s. BT Retail, TalkTalk, BSkyB and a number of other retail providers are exploiting these; and
• Subsidized superfast broadband has been deployed in Northern Ireland, which has the highest proportion of premises in rural areas in the UK. Since 2009, the Northern Ireland Department of Enterprise, Trade and Industry and BT have invested in the rollout of superfast technologies to Northern Ireland so that they were available to 95% of premises in 2012, but only 11% had taken them up.

So that looks like the same blend of intermodal competition we have in the U. S. between cablecos and telcos, coupled with subsidies for a single provider in rural areas, all powered by technology that’s getting faster and cheaper every day. It’s worth noting that the UK practices “broadband unbundling” where the incumbent (BT) is required to make its wires available to competitors at prices set by the regulator. Despite this practice, which is urged on the U. S. by gadfly Susan Crawford and others, the UK broadband market is still more concentrated than the U. S. market.

The figures on uptake in Northern Ireland raise eyebrows, however: If 95% can get “superfast” broadband and only 11% want it, something is seriously wrong. Either the standard broadband is pretty darn good and doesn’t need replacing, or the Dep’t of Enterprise, Trade and Industry isn’t doing a good job promoting the benefit of super-fast speed. Maybe we should lend our speed demons to Northern Ireland to have them drum up some interest.

The demand for super-high speed broadband in the UK would seem to be held up by the same factor that holds it up in the US: People who use the Internet every day for commerce and all the rest of the applications don’t see the need for “blazing fast downloads” just yet. Perhaps the answer is to build the application that needs them and then see what it does for demand.

Our figures on the pricing of entry-level plans come from the survey conducted by the International Telecommunication Union (ITU,) “Measuring the Information Society 2011.” In 2008 and 2010, ITU collected responses from 165 nations that place the U. S. 2^nd in 2008 and 4^th in 2010 in low prices for entry-level broadband plans as a percentage of average income. This price point is important because it shows how low the barrier is for getting poor kids online (without exposing them to fast food.) We’re not the first to highlight America’s low prices for basic service; Yochai Benkler’s Berkman Center report “Next Generation Connectivity,” accepts that the U. S. has low prices for basic service as well. It’s not a controversial finding in the research community, even if it clashes with urban legend.

Oddly, our claim that the average network speed in the United States is 29.6 Mpbs come from the very source that Ars uses in rebuttal, the 3Q 2012 State of the Internet Report from Akamai.  The disconnect here is that Akamai says the best way to evaluate network performance is with the “average peak connection speed” metric rather than the “average connection” metric. In Akamai’s own words: “In contrast to the average connection speed, the average peak connection speed is more representative of Internet connection capacity” (page 13.) This figure corrects for IP address sharing and is in fact 29.6 Mbps across all IP addresses in the U. S. We also use the Akamai figures on high-speed broadband adoption. We believe Average Peak is the better measure even though the U. S. ranks 8^th in the world on average speed and 12^th in average peak. We rank 7^th on high speed adoption, so in any case we’re a Top 10 nation in two of the three speed metrics Akamai offers. We agree with Ars on one thing, however: Akamai is the best source for broadband speed data.

UPDATE: In their update in response to this response, Ars claims that a spokesman from Akamai agrees with their view but doesn’t offer any of Akamai’s words on the matter:

Ars contacted Chris Nicholson, a spokesperson at Akamai, who agreed with us that the “average connection speed,” of 7.2Mbps represents the actual, real-world average. As any Internet user can attest, real-world speeds fluctuate quite a bit, and an “average peak connection speed” is hardly the same as “average connection speed.”

They also attribute our quote from Akamai above to us. To clarify, this is what Akamai says in the report, not an ITIF argument:

“In contrast to the average connection speed, the average peak connection speed is more representative of Internet connection capacity” (page 13.)

You can believe the Akamai report or you can believe Ars Technica, your call.

/UPDATE

Our figures for the adoption rate for homes with computers come from the OECD’s usage data on “Households with access to home computer (2010.)” Computer ownership is a broadband prerequisite, and ITIF has been promoting policies to increase it for years. It’s important because it relates to our biggest broadband issue, the relatively low use of the Internet by Americans who are poor, have low levels of education, are elderly, or are uncomfortable with technology. We believe it’s the right measure for adoption in broadband studies, since it helps to isolate adoption issues to the network, not to factors ISPs can’t control, such as poverty and lack of education.

Regarding the other issues Ars raises, we agree with New America’s Ben Lennet that America is “a big country” that needs fiber all over, not just in residential neighborhoods. It makes no sense to bring ultra-fast fiber to the each home until the backhaul, distribution, and core networks have the capacity to handle the traffic ultra-fast home connections can carry. America installed 19 million miles of new fiber in 2011 primarily to deal with capacity issues in the infrastructure.

The last mile itself has more capacity than most realize and does not represent the ultimate bottleneck (cable has an upside of several gigabits per second, and the next generations of DSL and LTE will reach 100 Mbps in many instances.) This is a fact of engineering, not an opinion.

When and where we’ll get higher speeds to the home for lower prices is a question that competition policy will answer. Our  “intermodal” competition policy means Verizon, Time Warner Cable, AT&T and Comcast compete on the basis of speed as well as price, which explains why full-fiber FiOS and mostly fiber U-verse are still adding subscribers faster than cable despite (what we hope is) a transient lull in deployment to new areas. When consumers show a taste for speed, ISPs generally supply it, not just in Sebastopol but across most of the nation, where 100 Mbps technology is available, if not fully utilized.

Regarding Ars’ claim that LTE “is not here yet,” our point was not to say LTE is a general substitute for wire as much as to point out that its deployment contradicts the assumption that American ISPs don’t care about speed. We also suggest that rural residents will need higher data limits than those that the common Verizon and AT&T rate plans currently offer; Sprint already offers such plans. The larger point is that LTE is only a rate plan or two away from replacing DSL in rural America, and that’s a relatively easy problem to solve.

Ars also compares nationwide networks in the U. S. with high-speed, low priced network service packages in cities such as Hong Kong, Riga, Seoul, and Tokyo. We discuss the geographic and policy reasons that American broadband is more expensive at the high end than comparable services in more compact areas. The bottom line is that it’s much more expensive to serve our expansive geography and dispersed population than the dense urban centers in many international cities. Our nationwide ISPs offer uniform pricing regardless of costs, an issue that small scale providers in Hong Kong, San Francisco, Seoul, and Sebastopol don’t need to worry about.

There’s an interesting policy argument behind America’s broadband pricing policy in which high speed, urban users pay charges that exceed costs while rural and low-speed users pay well below cost. The nations with the fastest networks have subsidized them quite heavily, and it’s not obvious at all that a similar exercise would make sense in America because of our high cost factors and the generally rapid pace of network improvement.

UPDATE TWO: Ars quotes Harold Feld on an electronic textbook program in Fairfax, VA that was cancelled due to lack of “affordable Internet access” in that wealthy city, but the Washington Post tells a different story:

The online math textbooks quickly hit several snags. Teachers said that many students did not have access to computers at home.

That’s ITIF 2, Ars 0 for those keeping score at home

/UPDATE TWO

How many teachers would you fire to subsidize a multi-gigabit network in Boring, Oregon or Uncertain, Texas?  For most Americans the answer is “none,” but Ars Technica is free to differ.

UPDATE THREE: See this article in The Register for an explanation of the strange, factually challenged response from Ars Technica: Official: America now a nation of broadband whingers: It’s no utopia, but at least you don’t get shot for chewing gum. On another factual note, “whinging” is British slang for “whining.”

We’ve previously written and filed FCC comments on cell phone mandates in the 700 MHz band, explaining the reasons that the Verizon and AT&T branded iPhones and Androids aren’t fully interoperable; we’ve also suggested things the FCC can do to increase the range of handset choices for subscribers to small, rural cell companies. Technology mandates amount to under-the-table subsidies paid by the customers of big cellular companies and received by the customers of smaller ones and therefore aren’t desirable as they simply rob Peter to pay Paul.

Adding support for additional bands and channels in a cell phone adds to the recurring cost of hardware in the form of additional circuits and antennas, increases power consumption, increases size and weight, and exposes the phone to more interference, especially from TV channel 51. If there were a regulatory requirement for interoperability among all phones sold by all carriers, consumers would not only pay more for their phones, they would also wait longer for upgrades, as each new phone would need to undergo a much more lengthy and costly test and certification process before it could be made available to the market.

The folks who design the leading smart phones for Apple, Samsung, and Motorola Mobility know this, and therefore build in some specialization. Instead of one super phone that’s all things to all people, they produce a small number of variations on a basic design that will work well on specific networks. The cell phone isn’t simply an adjunct to the cellular network as the rotary dial handset was for plain old telephone service, it’s an integrated component of the network. The smartphone’s transmitter and receiver perform the same functions that the transmitter and receiver on a cell tower perform. Neither works without the other, and both need to perform to specification for the network to work.

In case you’re wondering whether the race for smart phone leadership is going to be won by Apple, Samsung, or Motorola in 2013, you’ll need to consider the new entrants: House Democrats Anna Eshoo, Ed Markey, Mike Doyle, and Doris Matsui are taking on the role of smart phone designers as well. Their letter to the FCC asks the Commission to impose a “single technology mandate” in the lower 700 MHz band that would primarily affect LTE phones sold by AT&T for their network in the B Block, but not the LTE phones sold by Verizon for the 700 MHz C Block. So this single technology mandate isn’t really what it says it is, and is in fact arbitrary in its scope.

If it actually were a single technology mandate, we’d be able to analyze it according to the results of Europe’s “single technology mandate” that makes all networks run GSM. Like this Gang of Four, European regulators decreed that cross-network roaming was more important than all other factors and forbade operators from adopting advanced technologies as they came out of the lab. The result? The United States leads the world in LTE adoption, and Europe is a mobile broadband backwater that undergoes a recurring regulatory crisis around each generation of smart phone technology. Nokia, the European company that was once the world leader in smart phones, is a shell of its former self that can no longer sustain its own software platform, for example. It adapted to the dysfunctional European cellular market and lost its ability to compete in the wild.

So single technology mandates are not good, but I doubt the Gang will ever agree to this, regardless of the facts. Some policy positions are immune to facts that are hard to prove, but they shouldn’t be immune to logic, which is designed for proof, after all. If the lawmakers genuinely believe that a single technology mandate is good in the lower 700 MHz band, why stop there? Surely the same logic applies in the upper 700 MHz band, in the 850 & 1800 MHz bands as well as in the 2.5 GHz band and the all-new, super-shareable 3.5 GHz band, doesn’t it? In for a penny, in for a pound.

I suspect that the lawmakers didn’t go for an across-the-board technology mandate because they know that no serious case can be made for one. So the fall back is a divide-and-conquer strategy that imposes additional costs on the purchasers of the more expensive B block licenses in 700 MHz, while providing free benefits to the purchasers of the less costly A block licenses.

This mandate is technically unsound, but more than that it’s arbitrary and superfluous. I’d really like to see the lawmakers withdraw this ill-considered notion before it becomes a precedent that sets the US on the road to a European-style, innovation-killing mobile regulation regime. But maybe they just want to see the FCC get its wings clipped in court again. Whatever the motive, the Congressional proposal seeks to micro-manage a perfectly functional market, and for that reason alone it’s unnecessary.

Beyond the lively exposition of the hearing, the book relies on a series of anecdotes and strained historical analogies – and precious little hard data – to make a case for Crawford’s pet policy prescription, “broadband unbundling.” Unbundling would be a new status quo, reducing broadband service providers to the smallest possible role in communications services, that of a wiring plant maintainer lacking the power to move a single bit on its own. This would put both the financial and the technical bases of broadband in a severe bind, of course. Experiments with unbundling have shown that it can reduce consumer prices only temporarily, at the expense of ongoing investment in upgrades to network wiring and electronics. Deferred investment creates a series of deferred crises that can only be resolved by repeated taxpayer intervention on an uncertain schedule dictated by political factors.

The book illustrates the pitfalls inherent in communicating through ink and paper in the fast-moving broadband world: Since the book was committed to print, the Europeans that Crawford holds out as models of the benefits of unbundling are reported to be raising prices for wholesale broadband to stimulate investment in faster networks in order to catch up with the U. S.:

Only 2 percent of the households in the European Union have access to broadband download speeds of 100 megabits per second or greater. In the United States, by comparison, at least 50 million homes, or nearly half, are connected to networks with speeds of at least 100 megabits per second. By 2020, the commission’s goal is for half of E.U. households to have access to this service. Meanwhile, only half of E.U. households have service at 30 megabits per second. By 2020, the commission wants all E.U. households to have this as an option.

This comes as no surprise, given that European telecom operators sought to sweeten the 2012 WCIT treaty with fee-capturing features to stem their financial losses. At the urging of equipment vendors, Europe is also considering the outright abandonment of unbundling in favor of the facilities-based competition policy we have in the United States:

In the latest interview, [Alcatel-Lucent CEO Ben] Verwaayen said a number of factors would need to change to enable Europe to get up to speed with the U.S. and other regions in terms of telecom technology…

“We need to bring competition to where it really matters and that’s in choice and at the moment the regulator decides my choice and I don’t think that’s great,” he said…

He added that Europe lacked an ability to harness competition and talent and this was leaving it in the slow lane.

One of the issues the Europeans have discovered is the difficulty of deploying next-generation 100 Mbps Vectored DSL over unbundled wires:

[Deutsche Telekom] has lost billions on expansion into Greece, just wrote off eight billion from T-Mobile USA, and has huge losses, easily five billion and probably more, expanding into computer services (T-Systems). DT is demanding an end to unbundling, claiming it’s technically impossible to vector if some lines are unbundled.

Vectored DSL raises issues similar to the ones that arise for unbundled cable: Bit transmission is highly dependent on the behavior of adjacent channels or wire pairs in a cable sheath, so inserting a service firewall slows access for everyone. Competition between networks bound to particular cable plants (DSL vs. Cable DOCCIS) is feasible, but sharing a cable plant between multiple ISPs requires a very high degree of technical and regulatory coordination, which is increasingly infeasible as DSL and cable technologies benefit from Moore’s Law become more sophisticated. As with wireless, we can have sharing or we can have high performance, but we can’t have both.

Crawford argues that cable has achieved a monopoly position over DSL by virtue of higher speed, but also claims that cable isn’t fast enough. She’d like to see each American home equipped with fiber optics providing 1 Gigabit/second in both the upload and download directions, something Google doesn’t even offer in Kansas City:

In most of Comcast’s market territories, it was the only high-speed access provider selling services at speeds that would be sufficient to satisfy Americans’ requirements in the near future. But the access Comcast sold was less useful than it could have been because the network had been designed to be contested among users in the same neighborhood (making speeds unreliable) and favored passive consuming uses (downloads) far more than active uploads. Meanwhile, the service that all Americans would need within five years (truly high-speed Internet access ranging from 100 Mbps, or megabits per second, to gigabit speeds over fiber-optic lines), the service that would allow symmetrical (same-speed) uploads and downloads and extensive use of online streaming video for a host of educational, medical, and economic purposes, was routinely available in other countries but could not be purchased at all in most parts of the United States. [Crawford, Susan P. (2013-01-08). Captive Audience (Kindle Locations 50-57). Yale University Press. Kindle Edition.]

Crawford is clearly incorrect in asserting that the service she wants to see is “routinely available in other countries,” of course. Even worse than the wishful thinking is her studied refusal to describe the actual applications that would be enabled by symmetrical service at gigbit speeds that can’t be used today.

There’s clearly no shortage of streaming video on the Internet today, as most studies find that video streaming represents half the traffic on the American Internet during prime time today. We’ve had gigabit networks in offices, homes, and campuses for nearly ten years now, and we haven’t seen any new applications too demanding for common 100 Mbps networks but happy with gigabit connections.

In real life, the requirements of video streaming are many times more modest than Crawford imagines: Netflix reports that their average streaming rate over Google’s gigabit Kansas City network is a meager 2.5 Mbps, a figure that’s well within the capability of all but the poorest DSL connections and no problem at all for Verizon’s FiOS, cable’s DOCSIS, AT&T’s and Century Link’s VDSL+, and even 4G LTE wireless.

Consumers in most parts of America can in fact purchase 100 Mbps service over FiOS and cable today, and should be able to buy it from Vectored DSL services in fairly short order, but they’re still bewildered about what they’re going to do with it. The likely answers will come from corners that aren’t too hard to imagine, such as high-resolution multiparty video calls, virtual classrooms, and even holographic conferencing. But these aren’t pressing concerns today and they won’t be for many years to come; they’re certainly unlikely to jump to the top of consumer concerns within five years, but if they do, we have the technology to address them on the networks that are currently installed.

American broadband policy does need to be continually reviewed, updated, and revised. The rates of computer ownership and literacy are still too low, consumer awareness of the benefits of broadband is still too narrowly distributed, broadband service in rural areas is still too spotty, and it may be too difficult  for upstart broadband suppliers to obtain access to rights of way (although metro Ethernet doesn’t seem to have much of a problem with it.)

Policies that were considered, tried, and discarded fifteen and twenty years ago won’t alleviate these problems, however, and by now Crawford should know that. It’s particularly disappointing that Crawford refuses to acknowledge America’s leadership in the adoption of next generation wireless LTE. She sneers at mobile as an inferior substitute for cable without giving any credit to the benefits of mobile computing. It’s as if she doesn’t want her foreordained conclusion perturbed by mere facts.