http://www.businessweek.com/technology/content/jun2010/tc20100622_203653.htm
Sorry Fiber Fans, I've Got Some Bad News
Fresh research suggests that consumer demand doesn't support faster broadband speeds. What's needed: tantalizing new apps, such as 3D television
More than 70 percent of U.S. broadband customers are happy with their overall service, ranking it between 8 and 10 on a 10-point scale, according to Leichtman Research Group. A mere 3 percent scored their service with a 3 or less on the recently conducted survey, while just 26 percent said they're "very interested" in receiving faster speeds at home. In other words, big, bold fiber efforts, such as Verizon's FiOS, aren't yet supported by consumer demand.
Leichtman Research Group surveyed 1,600 broadband-enabled U.S. households to get its data, which will undoubtedly be used to tout the current broadband status quo, especially after the Federal Communications Commission earlier this month released similar findings. And if 77 percent of people don't know exactly what their broadband speeds are, and 44 percent aren't interested in them getting any faster, as Leichtman has concluded, then these data are another nail in the coffin for faster broadband speeds.
From an ISP's perspective, there's no real need to invest in expensive fiber-to-the-home deployments or even cheaper DOCSIS 3.0 upgrades if the demand isn't there. The lack of demand and quick subscriber take-up is one of the reasons Verizon has halted its deployment of FiOS fiber-to-the-home service and instead focused on achieving a 40 percent penetration rate among those homes that already have access to it.
Chicken-and-Egg Problem
Unfortunately, this satisfied consumer mind set will likely continue until demand for 3D television, home telepresence, or some other application that requires faster speeds becomes so ubiquitous and cool that people realize what they're missing. No one will build such a service if only a small percent of the population with big broadband can watch it, a conundrum I discussed back in February, when I asked the tech community to build something so big, so wonderful, that it would help drive demand for faster broadband. Fundamentally, fatter pipes are necessary to drive further technology innovation and reap the benefits of Web-based services, so this apparent lack of demand at the last mile is a big problem.
In the meantime, the Leichtman data also offer even more good news for ISPs. Fewer than 1 percent of all households that are interested in getting broadband yet don't have it cite cost as a reason for not subscribing. Taken together, that means consumers are finding a lot of value in their current broadband pricing and packages. For ISPs, it looks like broadband pricing and speeds aren't broken, so there's no need to fix them. Maybe Google's planned experimental fiber-to-the-home network can shake things up a little.
