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broadband
This
page looks at broadband (ie high-speed access to the net),
touted as a driver for electronic commerce, on-demand
content, e-government, e-medicine and substantial GDP
growth.
It covers -
introduction
Broadband services provide net connections that are at
least five times faster than earlier dial-up technologies,
enabling users to play online games and download music
and videos, as well as share files and access information
much faster and more efficiently than before.
Some sense of the 'need for speed' is provided by John
Steele Gordon's A Thread Across The Ocean: The Heroic
Story of the Transatlantic Cable (New York: Walker
2002) which notes that transmission of a 99 word message
to US President James Buchanan from Queen Victoria via
the ill-fated 1858 transatlantic cable took 16 hours.
150 years later downloading a Hollywood feature film over
a 56k modem might
require a whole day.
Greater bandwidth encourages 'always on' use and "positioning
the home computer as a multimedia entertainment device",
with faster surfing, game and file sharing, video and
virtual reality applications.
It also encourages a range of interactive or other applications
for the delivery of services and content by business,
government, medical and cultural institutions, including
vendors of
adult content. And it has become the focus of post-bubble
cargo-cultism, associated with extravagant claims about
productivity growth, social inclusiveness
and cultural development (often from hardware vendors
bleeding from the 2000 collapse of telecommunications
spending).
The January 2003 report
on Australia's Broadband Connectivity by the
federal Broadband Advisory Group thus stated that
Harnessed
effectively, broadband connectivity will be a key driver
of Australia’s Gross Domestic Product (GDP), jobs
and wages growth. Broadband technologies will be the
roads and railways of the 21st century, generating the
next wave of economic expansion.
Just as transport opened up new economic horizons in
the last century, advanced communication networks will
pave the way for productivity gains across global economies
in the new century.
What quantum of productivity gains might be possible?
Accenture estimates that next generation broadband could
produce economic benefits of $12 billion to $30 billion
per annum to Australia. This assumes that broadband
is adopted as universally as the telephone over the
next 25 years. A policy of encouraging widespread broadband
adoption could deliver accelerated economic value within
years rather than decades.
The International Telecommunication Union (ITU), echoing
Andrew Odlyzko's perceptive 2003 paper
The Many Paradoxes of Broadband, more cautiously
comments that
in
many markets, increased competition among broadband
service providers has also triggered lower prices for
consumers, boosting demand and making broadband access
more affordable.
Claimed
benefits include -
-
speeds are significantly faster than previous technologies,
making it faster and more convenient to access information
(eg permitting video on demand), to conduct online transactions
and to engage in new/enhanced services such as online
gaming
- economic
gains, typically identified as use of a single standard
phone line for both voice and data services, obviating
the need for an extra phone line to the home
More
problematically it is claimed that
Broadband
enhances existing Internet applications, while paving
the way for new solutions, which were too expensive,
inefficient or slow to consider in the past. This may
include everything from new e-government services, such
as electronic tax filing, to online health care services,
e-learning and increased levels of electronic commerce.
Higher
performance comes at a cost (or merely provides an opportunity
to leverage assets by charging broadband access as a premium
service, as highlighted in Richard Ewell's 2001 Splinternet:
Cable Providers Attempt to Divide and Conquer High-Speed
Access to the Internet paper).
As we have noted in considering the shape of the Australian
telecommunications
industry, access to broadband has fuelled debate about
the operation of major telecommunications carriers and
calls for government funding of infrastructure into remote/regional
Australia.
definitions
Typically 'broadband' describes connections that range
from 5 times to 2000 times faster than that from a 26k
modem. Definitions of broadband are contentious and the
ITU aptly notes that broadband is not synonymous with
a
particular speed of transmission or a certain set of
services, such as digital subscriber loop (DSL) or wireless
local area networks (wLANs).
The ITU comments that
the
term broadband does not refer to either a certain speed
or a specific service. Broadband combines connection
capacity (bandwidth) and speed.
Recommendation I.113 of the ITU Standardization Sector
defines broadband as a "transmission capacity that
is faster than primary rate Integrated Services Digital
Network (ISDN) at 1.5 or 2.0 Megabits per second (Mbits)
ADSL
(Asymmetric Digital Subscriber Line) is a technology that
uses the copper network to enable delivery of broadband
via a dedicated line from the customer (typically a residence)
to a telephone exchange. ADSL is a high bandwidth downstream
service, coupled with a lower bandwidth upstream service.
ADSL2+ is a high speed service that extends the capability
of basic ADSL.
infrastructure
A range of broadband technologies are in place in Australia
and overseas or being vigorously promoted by particular
vendors. In describing the infrastructure we're reminded
of Albert
Einstein's apocryphal response to a request to explain
radio -
You
see, wire telegraph is a kind of a very, very long cat.
You pull his tail in New York and his head is meowing
in Los Angeles. Do you understand this? And radio operates
exactly the same way: you send signals here, they receive
them there. The only difference is that there is no
cat.
The
main infrastructures are -
-
Cable modems
- Digital subscriber lines
- Fibre
- Wireless
Cable
modems leverage existing cable
television networks, such as those in the metropolitan
US, Canada and parts of the EU. Those networks, developed
for the delivery of subscription pay-tv services (or for
access to free to air broadcast services in 'black spot'
or other areas where reception is poor) include internet
traffic alongside television channels. Typically one 'channel'
is reserved for data from the internet, with another channel
for data from users back to the net. Examples in Australia
are the Optus network in Sydney and Melbourne and the
Transact network in Canberra.
Digital subscriber lines (DSL) are the most common broadband
technology, leveraging traditional copper lines owned
by telephone companies. DSL uses different frequencies
to split voice and data services using the same standard
phone line, enabling user access to voice and internet
traffic at the same time via a single line. It offers
higher speeds and greater quality when transmitting voice,
data and images. In general it is only available for subscribers
within 4 to five miles of an exchange in Australia, meaning
that many consumers - including those in major metropolitan
centres such as Canberra, simply miss out.
DSL is a dedicated service, with bandwidth and service
speeds not varying because of the number of subscribers
in a particular area. The main difference between DSL
and cable is that all cable modem subscribers in a small
area share the same channels to send and receive data.
As a result, the amount of bandwidth and the resulting
service speeds each user experiences depend on how much
bandwidth neighbours are using at the same time.
Fibre - in its ideal form characterised as 'fibre to the
toaster' rather than 'fibre to the kerb' - uses lasers
to transmit pulses of light down extremely fine strands
of silicon, with a cable potentially carrying thousands
of times more data than either traditional copper wireline
or radio. Fibre can theoretically provide nearly unlimited
bandwidth potential, so this solution is often used for
either high bandwidth connections between cities or heavy
bandwidth areas within cities.
The cost of installing fibre previously made it prohibitive
for connecting small communities or homes, but prices
have fallen to the point that in some economies users
can now connect via fibre at speeds 20 times greater than
the fastest DSL and cable modem connections.
Some governments (such as Sweden, Iceland, Japan and Singapore)
are deploying fibre infrastructure in the expectation
that it will eventually be cost effective to install fibre
connections into the home. Amsterdam more ambitiously
announced plans in 2004 to roll out fibre to every household
and business. In Australia fibre has essentially stopped
in a neighbourhood (for the domestic market), with traffic
carried to the kerb and then into the home by wire.
Wireless Local Area Networks
(WLANs) and Wireless Fidelity (Wi-Fi) use the electromagnetic
spectrum rather than wireline to transmit and receive
data over short distances. Mobile devices access the network
by connecting, via radio, to a wireline access point that
passes traffic back and forth over the network. WLANs
are an effective way to share wireless Internet access
from a broadband connection within a distance of 100 metres.
They are also increasingly used to provide broadband access
over long distances in rural areas and developing nations,
of interest as a mechanism for reducing some digital divides.
Wi-Fi, discussed on the following page of this guide,
is the most common type of WLAN technology. It is however
not synonymous with WLAN and other WLAN technologies include
802.11a, Home RF2 and HiperLAN2.
Enthusiasts and vendors have hyped alternate technologies
such as broadband over powerline (BPL) or digital powerline
communication (PLC), discussed
in a supplementary note elsewhere on this site.
An overview of the Australian infrastructure as of early
2001 is provided by the Telecommunication Infrastructures
in Australia 2001 report.
The US Computer Science & Telecommunications Board
Committee on Broadband Last Mile Technology Broadband:
Bringing Home the Bits (Washington: National Academy
Press 2002) is particularly valuable.
global uptake of broadband
Definitional disagreements mean that figures on the global,
regional and national uptake of broadband are problematical.
The ITU in September 2003 suggested that approximately
one in every ten subscribers worldwide (around 5% of the
total installed base of fixed lines worldwide) has a dedicated
broadband connection, with a larger online population
having broadband access through a LAN at work or at school.
Broadband subscribers in South Korea, often characterised
as the global benchmark, account for 94% of that nation's
total subscribers (21 broadband subscribers for every
100 inhabitants, followed by Hong Kong with nearly 15
broadband subscribers per 100 inhabitants).
As of 2003 broadband was commercially available in around
85 out of 200 economies worldwide, with significant growth
in subscriber numbers over the preceding five years (often
attributable to rollout of infrastructure during the late
1990s telecoms bubble).
Perspectives from North America and Asia are provided
by Izumi Aizu's 2002 paper
A Comparative Study of Broadband in Asia: Deployment
& Policy, Sharon Eisner Gillett & William
Lehr's 2000 paper
Availability of Broadband Internet Access: Empirical
Evidence, Tom Downes & Shane Greenstein's 2001
Universal Access & Local Internet Markets in the
United States (PDF)
and the 2000 TPRC paper by David Gabel & Florence
Kwan on Accessibility of Broadband Telecommunication
Services by Various Segments of the American Population
(PDF)
or other works highlighted at the beginning of this guide.
In some markets broadband is forecast to become one of
the fastest growing consumer communications services,
with predictions that in the US it will reach the 25%
penetration mark more quickly than adoption of mobile
telephones or personal computers. Global growth during
2002 was estimated by the ITU at 72%, to approximately
63 million subscribers.
Differing regulatory regimes and infrastructures mean
that there is significant variation across the globe in
uptake of broadband by domestic, business and institutional
users ... sometimes characterised as 'the broadband
gap'. As of mid-2003 most home users access the rnet
via dial-up or narrow band services.
The ITU suggests that during the three months to the end
of September 2002 the number of online households (generally
a minority of all households) with access via broadband
was
77%
- Hong Kong
48% - Canada
30% - Netherlands
28% - United States
26% - Japan
25% - France
24% - Sweden
20% - Germany
19% - Spain
13% - UK
9% - Australia
9% - Italy
Costs
and the availability of infrastructure - despite claims
to the contrary, geographical location and distance still
matter - mean that consumer broadband users in Australia
and elsewhere tend to be young and have tertiary qualifications.
The ITU notes the importance of normalisation, commenting
that
for
small and medium-sized businesses in particular, broadband
brings the advantages of high-speed, high-capacity communications
that may have not been affordable before. However, even
larger businesses may start to shift to broadband, which
could reduce costs one hundred fold, as compared to
some of today's private corporate networks.
driving uptake of broadband
Critical factors in domestic uptake of broadband have
been characterised as the Four C's -
Convenient
connectivity
technologies such as satellite
mean that in principle most parts of the globe have
potential access to broadband. In practice demand is
conditioned by the convenience of access, in particular
the availability of wired or wireless infrastructure
that is stable, easy to use and readily affordable.
In parts of Asia, North America and the EU the catalyst
for roll-out of broadband has been cable television
providers. That has not been the case
in Australia, where cable has essentially been restricted
to a handful of major metropolitan centres and regional
cities, with few plans to extend that infrastructure
on a large scale.
Cost
Australian and overseas experience suggests
that cost of installation and ongoing access is a key
determinant in uptake of broadband, particularly among
domestic and SME consumers who do not have substantial
exposure to broadband and thus cannot see "what
all the fuss is about". Competition in provision
of infrastructure and service has been important in
reducing prices; it is an issue in regulation of dominant
infrastructure operators such as Australia's Telstra
Compelling content
For many users the dominant use of the internet is sending/receiving
email. Some are uninterested in gaining access to other
content (including games, audio and video). Others -
particular those with some exposure to broadband - are
interested but are inhibited by concerns about cost
or security.
Consumer confidence
Confidence in using the net and e-commerce appears to
be a significant factor in domestic consumer and SME
demand, including concerns about management of viruses
in 'always on' connections and the integrity of payment
systems.
uptake of broadband in Australia
By September 2002 domestic use of broadband in Australia
has increased from a low base to 9% of home users (ie
under 5% of all households). Uptake rose by 80% in the
year from September 2001.
Broadband uptake by Australian businesses was biased towards
major enterprises and metropolitan centres. In discussing
internet metrics this site
notes estimates that as at June 2002 some 72% of Australian
businesses with employees (around 474,000 enterprises)
had a net connection, albeit one that often was not on
for much of the day.
Among that cohort an estimated 86% went online via dial-up
services, 7% via DSL, 7% via cable modem, 4% via ISDN
and 2% via other high speed services. Only 45% of online
businesses with 100 or more persons accessed the Internet
via dial-up services, compared to 88% respectively for
micro businesses (1-4 persons), businesses employing 5-19
persons and 74% for online businesses employing 20-99
persons.
By late 2008 the Australian Bureau of Statistics was reporting
that 4.3 million households - ie 52% of all households
- had a broadband connection. 6.2 million households (over
75%) had access to a computer. 5.5 million households
had some form of internet access.
The ABS estimated that metropolitan areas had higher proportion
of broadband connections (57%) than other areas (43%),
households with children under 15 had higher broadband
access (67%) compared to households without (46%) and
- consistent with discussion elsewhere on this site about
digital divides - those households with an income of $120,000
had substantially higher rates of access (81%) than households
incomes of less than $40,000 (38%).
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