The Broadband Gap

In general, I have found that network bandwidth requirements increase between 50-100% every year. With the prevalence of high speed broadband options to the home, user expectations have increased. Now that 6Mb cable modem service to the home is common, business class services shared among many users can at times seem inadequate.

There is a quantization that appears in network services. You can start with T1 or E1 circuits at 1.5Mb and bond them for more bandwidth. This works until you get to about 9Mb, at that point you generally need to start looking at options like a fractional DS3. The problem is that when you make that jump the cost increase significantly. To deal with the circuit you need a more expensive router, and the costs for the circuit and installation jump. Then to deliver more than 45Mb you need to jump up to OC3s which substantially increase the cost.

When you look at the consumer options like cable and FiOS and even DSL it is often hard for people to understand the different classes of service and the associated costs. There is a cost that comes with the reliability, low latency, committed bandwidth and service levels that come with business class service. The question remains, is that service and reliability commensurate with the cost.

When I look at the growth rate for bandwidth consumption, and what the options are for businesses, there really is no good option. We are already hitting that wall. The services are too expensive for a business to absorb, but the demand for bandwidth is far too great.

In many ways it is easier to run fiber out to the residential customers than it is to run it out to the businesses. In the suburbs you only need run a cable over a pole or dig a hole in someone’s yard. In the city you have to get building permits, redirect traffic, jackhammer through pavement, etc. So it remains to be seen whether business class service can keep up with residential offerings. The only thing I know is the providers have a long way to go, and the zombie mob of bandwidth hungry users are clawing at their door, so they better get started.

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