Cable Still Rules US Broadband
The report is a mandatory biannual reckoning of high-speed (200 kbit/s or faster) connections in the U.S. It's also got some geographical breakdowns, including figures that reveal which states have the highest and lowest numbers of high-speed connections. (Answers at the bottom; no peeking!.)
Most of the numbers aren't surprising. The number of U.S. broadband connections grew 55 percent last year, to 19.9 million. Cable continues to outnumber ADSL, at 11.4 million connections, compared with ADSL's 6.5 million as of December 2002 (see FCC Posts High-Speed Net Info).
Summary: Both sides are growing steadily, but cable's still outpacing ADSL 2 to 1. And that gives ADSL advocates another chance to rail against the fact that cable isn't regulated like DSL is.
"The FCC numbers show how well the FCC is doing their job at constraining the DSL market," quips Gary Bolton, vice president of marketing for DSL equipment provider Catena Networks Inc..
Help could be on the way, although it might not arrive in time to affect the 2003 figures, Bolton says. For one thing, the Bells got their broadband wishes granted with the Feb. 20 FCC ruling -- although it's debatable whether that's going to catalyze spending (see Will RBOCs Spend More on Broadband?).
Even if it does, Bolton notes that carriers are still waiting for the text of the decision before unlocking the capex flood gates. "You never know how many maggots are in that text," as he tastefully puts it (see New FCC Rules: 600 Pages? ).
Other pending decisions include the debates on whether ADSL is an information service or a telecommunications service (with different legal implications on either side) and whether DSL is a "dominant" service. Given the FCC numbers, Bolton argues DSL is clearly not dominant, which should lift some regulatory obligations from service providers.
"As the handcuffs start coming off and the playing field starts to level, you'll start seeing capex start to take off," he says.
That's nice for Catena, but why would it help DSL's popularity? Because increased spending could improve service availability. Specifically, it could address another finding in the FCC stats: Cable clobbers DSL in "advanced" services -- defined by the FCC as service that offers more than 200-kbit/s speeds in both directions.
Now, a lot depends on what's considered "advanced." For example, Verizon Communications Inc. (NYSE: VZ) is offering residential DSL subscribers 1.5 Mbit/s downstream and 128 kbit/s upstream -- which would feel pretty darned nifty to a lot of users but doesn't count as "advanced" in the FCC's tally. Still, the numbers imply that cable is more consistent about offering high-speed upstream access, which could be a key in pitching to business customers.
Increased spending could help here, because service providers can boost DSL speeds by putting facilities closer to customers. This happens in the form of digital loop carriers and similar boxes, provided by the likes of (gee, surprise!) Catena, as well as competitors including Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Calix Networks, Marconi Corp. plc (Nasdaq/London: MONI), and Occam Networks Inc. (OTC: OCCM).
ADSL also has to contend with trouble zones in the telephone infrastructure, due to bridge taps that degrade performance or lines that just plain suck. There are ways around that as well; chip makers are upping the ante on their signal-conditioning capabilities, trying to make ADSL more resilient (see TI Beefs Up DSL Chip).
As for that state-by-state breakdown -- not surprisingly, California tops the list with 3 million high-speed connections. New York ranks a distant second with a paltry 2 million -- no, wait, it's not even 2 million: a paltry 1.997 million connections.
The state or territory with the smallest number of connections? That would be (drum roll) Wyoming, with 14,696. South Dakota is second, around 18,000, while North Dakota and Montana rank barely above 20,000. (Caveat: Figures for Hawaii weren't included, to protect the confidentiality of the few service providers working that state.)
The FCC report, titled "High Speed Services for Internet Access," can be downloaded at www.fcc.gov/wcb/iatd/stats.html. For now, it's available under the "Recent Reports" link.
— Craig Matsumoto, Senior Editor, Light Reading