Connect with us

Broadband's Impact

The Cost of Connectivity: An Analysis of the Open Technology Institute Report Cited by the White House

Published

on

WASHINGTON, January 14, 2015 — The White House’s recent report on “Community-Based Broadband Solutions” relies heavily on an Open Technology Institute report from the fall that compared the quality and cost of U.S. broadband Internet with the rest of the world.

The third annual Cost of Connectivity report from OTI, the technology program of the public policy institute New America Foundation, compared the prices, speeds, data caps and other fees of both home and mobile broadband in 24 cities from around the world.

“Our findings remain consistent: the majority of U.S. cities included in our report lag behind their international peers,” according to the report.

The report is consumer-facing, focusing on what consumers would actually pay for the advertised speeds in the respective cities. Other broadband reports analyze market trends, differences in economic and political systems, levels of federal and private investment, and compare advertised speeds to actual speeds. The findings of this report simply show the current state of broadband in cities across the globe.

As Business Insider quickly pointed out, OTI’s reported showed that San Francisco has the slowest speeds of any major U.S. city, coming in 20th out of the 24 cities. Yet the ISP Webpass offers a plan with 200 Mbps symmetrical connection (equal download and upload speeds) for $30 a month. The cost of that plan makes San Francisco the most affordable city in the U.S. for fast broadband for under $40.

Vice used the report to generalize about the poor state of broadband nationwide after it first compared Los Angeles and Seoul, saying “the internet in Los Angeles is half the speed of the internet in Seoul, and yet we pay ten times as much for it. The only cities in America that can even hold a candle to places like Seoul are Kansas City and Chattanooga, Tennessee, where the internet is fast but still twice as expensive.”

These reactions are understandable, as the findings of the report seem to be in line in line with the general sentiment that Americans have been reading about for months, even years: that U.S. broadband is not only slower than its international peers, but the cost to connect is also much higher in the U.S. However, Kehl made it clear that the report findings should not be generalized to a nationwide level.

“We make it clear that it is a city comparison,” Danielle Kehl, one of the experts behind every Cost of Connectivity report told Broadband Breakfast. “It tends to get covered much more as the U.S. is lagging behind the rest of the world and a country comparison. We are very conscious of the fact that it is a city comparison and that its not U.S. versus Germany, but Washington, D.C. versus Berlin.”

The report also notes why a city-to-city comparison was used. “We compare specific cities in an attempt to address population density challenges that often skew comparative assessments of broadband in the U.S. vs. other European and Asian countries.” The significance of population density is tantamount, as it is an “important variable that helps dictate broadband speeds and prices.”

 

Rank

City

Continent

Population (City)

Land Area (mi sqaured)

Pop Density of City (people per mi squared)

1

Paris

Europe

2,249,975.00

40.7

55,281.94

2

Seoul

Asia

10,442,426

233.67

44,688.77

3

New York City

North America

8,175,133

302.60

27,016.30

4

Taipei

Asia

2,693,672.00

104.94

25,668.08

5

Delhi

Asia

11,007,835.00

431.09

25,534.89

6

Bucharest

Europe

1,883,425.00

88

21,402.56

7

Mumbai

Asia

12,478,447.00

603

20,693.94

8

Sao Paulo

North America

11,895,893.00

591.78

20,104.00

9

Jerusalem

Middle East

890,428.00

48.32

18,426.59

10

Hong Kong

Asia

7,234,800

407

17,775.92

11

Copenhagen

Europe

579,513.00

33.28

17,413.25

12

San Francisco

North America

805,235

46.69

17,246.41

13

London (Inner London)

Europe

3,335,438.00

198.40

16,811.89

14

Tokyo

Asia

13,185,502

844.66

15,610.43

15

Mexico City

North America

8,851,080.00

573.00

15,446.91

16

Madrid

Europe

3,236,344.00

233.89

13,837.03

17

Boston

North America

645,966

48.42

13,340.89

18

Amsterdam

Europe

813,562.00

64

12,711.91

19

Dublin

Europe

527,612.00

44.40

11,883.15

20

Chicago

North America

2,695,598

227.2

11,864.43

21

Zurich

Europe

383,708.00

33.93

11,308.81

22

Toronto

North America

2,615,060.00

240.00

10,896.08

23

Washington, DC

North America

646,449

61.40

10,528.49

24

Berlin

Europe

3,517,424.00

344.35

10,214.68

25

Shanghai

Asia

24,150,000.00

2,448.10

9,864.79

26

Los Angeles

North America

3,884,307

503.00

8,282.00

27

Prague

Europe

1,243,201.00

192

6,475.01

28

Riga

Europe

701,977.00

117

5,999.80

29

Lafayette, LA

North America

120,687.00

49.1

2,457.98

30

Kansas City, MO

North America

459,787.00

314.95

1,459.87

31

Bristol, VA

North America

17,835.00

13.2

1,351.14

32

Chattanooga, TN

North America

173,366.00

135.2

1,282.29

33

Kansas City, KS

North America

145,786.00

124.811

1,168.05

Cities in regular fonts were used in the original report, bold and italic cities were added for comparison

Using this logic, the best comparisons are between or among cities with comparable densities. Seoul’s population density is so much greater than any other city in the report that it is an outlier. A better comparison would be between Los Angeles and Berlin, or among Amsterdam, Zurich, Los Angeles, Berlin, Dublin and Prague.

Best Home Broadband Deals Under $40

 

City

Provider

Monthly Broadband Price

Download

(Mbps)

Upload

(Mbps)

Density

Berlin TeleColumbus

$37.18

64

3

10,214.68

Dublin UPC

$36.59

60

6

11,883.15

Toronto Teksavvy

$36.25

30

5

10,896.08

Los Angeles Sonic.net

$39.95

20

2.5

8,282.00

Zurich UPC

$32.37

20

2

11,308.81

Prague O2

$37.41

20

2

6,475.01

Los Angeles seems to be holding up just fine against the cities with comparable densities. It should be noted that the data used for Los Angeles and New York in this comparison is not the same as used in the official report. Two simple Google search revealed that Sonic.net and RCN provided faster speeds than what was used in the chart. For the most part, cities with comparable densities have similar speeds and prices.

City to City Data

While the Cost of Connectivity helps to fill in the gaps left by other more technical reports, the report does not include mobile phone data plans, only home broadband and mobile broadband from USB dongles and Wi-Fi hotspots. The cost of those plans frequently include non-broadband related services like voice and text.

“There is a lot value in that research and we’d love to do it or see someone else do it,” Kehl told Broadband Breakfast. “In terms of the scope of this report, we decided to focus it on [accessing the Internet on a personal computer or tablet].”

While the Open Technology Institute report did not include mobile phone plans in their comparison, it did include the connection prices and speeds of mobile broadband of portable Wi-Fi hotspots and USB dongles. Examining the available dataset shows that 3 of the 4 US carriers lack any upload and download speeds. OTI told Broadband Breakfast that the data for the speeds was not publicly available. While the websites of AT&T, T-Mobile and Sprint do not display speeds, a live chat with a customer support representative quickly provided some missing details.

Missing data was not limited to U.S. carriers. Data on Canada’s Bell mobile broadband network can be found on their website Two out of the five Hong Kong carriers lacked data on speeds, and three of five Dublin carriers lacked that information.

American Trends

The report surveys relatively few cities with the highest tier of broadband. Other incumbent ISPs, regional ISPs and municipal ISPs nationwide have been building out fiber and increasing the speeds. CenturyLink announced seven new cities in which it will offer 1 Gbps upload and download speeds to residents in addition to the three cities — Las Vegas, Salt Lake City and Omaha — where it already provides the service.

New entrants like Google Fiber have sparked the competition to provide faster and cheaper broadband speeds. When Google announced it was bringing its fiber service to Austin, Texas, incumbent AT&T announced GigaPower service, which will increase the top home broadband speeds from 300 Mbps to 1 Gbps, to match Google’s speeds.

While not many U.S. cities can boast 1 Gbps up and down for around $40 or less like Hong Kong and Seoul, the U.S. is a substantially larger any other country surveyed in the report. In addition, many smaller cities and rural areas are getting the gigabit treatment. Residents of Brentwood, CA, which is right outside of San Francisco, are getting 1Gbps + voice for $40 a month from ISP Sonic.net, and will be expanding to San Francisco in the future. Verizon Communication’s Fiber Optic Service recently announced its move to provide symmetrical upload and download speeds on all of its plans.

A New Hope

Demand for faster, more reliable broadband is not only growing in the U.S., but it will be necessary in order to take advantage of newer, broadband-dependent technologies in the realms of education, health and business. This demand has drawn both private and government investment in laying fiber and building the infrastructure necessary for future-proofing American broadband. Coalitions such as the Schools, Health and Libraries Broadband Coalition have been formed to advocate for more federal funds, to help bring together ISPs and communities and to overall help the expansion of next generation networks. In rural and suburban communities where competition seems to be lacking, municipalities have worked to create affordable alternatives.

These efforts have not been in vain, as the Federal Communications Commission has made changes in the agency’s plan to increase the E-rate fund for schools and libraries. Now, President Obama’s push to support community-led Gigabit Networks could open up new super-fast options for cities in the United States.

 

Broadband's Impact

Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units

What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?

Published

on

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”

Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?

Panelists:

  • Sandra Howe, Board of Directors, Minim
  • Pierre Trudeau, President and Chief Technology Officer, Positron Access
  • Other Guests have been invited
  • Drew Clark (moderator), Editor and Publisher of Broadband Breakfast

Drew ClarkEditor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Continue Reading

Education

National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap

EducationSuperHighway is signing up partners and will launch November 4.

Published

on

Evan Marwell, founder and CEO of Education Super Highway.

WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.

On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.

The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.

The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.

The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.

The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.

“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”

Over 120 regional and national carriers have signed up for the initiative.

The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.

Continue Reading

Broadband's Impact

Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services

The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.

Published

on

The author of this Expert Opinion is Steve Lacoff, general manager of Avalara for communications

The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.

Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.

Cloudification is a game changer

This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.

Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.

The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.

In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.

Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”

Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.

Don’t let communications tax take you by surprise

One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.

Here are some of the key pitfalls to keep an eye on:

  • Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
  • More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
  • Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail.  They must be filed in a timely, accurate cadence to avoid additional audit risk.

Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.

It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.

Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending