National Broadband Plan: A Look at Chapter 3

Editor’s Note: This is the second in a series of articles written by BroadbandBreakfast.com staff summarizing each chapter of the FCC’s National Broadband Plan.

WASHINGTON, March 29, 2010 – The third chapter in the Federal Communications Commission’s National Broadband Plan focuses on the current state of the broadband ecosystem. It sets out to show that the actual state of the broadband network is not just about availability and the physical network but also consumer choice and usage.

The current state of the internet is the result of a decreasing cost of fiber and the expansion of fiber optic networks. The innovation fueled by this expansion allowed for new companies and products to be created thanks to this network and the overall adoption of these new technologies by consumers.

A recent Nielsen study shows that home broadband use has increased from one hour per month in 1995, to more than 15 hours per month in 2000, to almost 29 hours per month today. While the overall usage of the internet has expanded greatly, the amount of data that an individual uses varies greatly. In another study, the FCC shows that investment in information and communications technologies accounted for almost two-thirds of all economic growth attributed to capital investment between 1995 and 2005.

In regards to availability, the FCC cites U.S. Census data showing that 95 percent of the U.S. population has access to fixed broadband that is capable of speeds of up to 4 megabits per second. The largest gap in availability occurs in the middle part of the country while the coasts and high population areas have over 80 percent access. However, there are gaps in availability – most notably for rural health clinics and schools.

In the next section, the FCC tackles an issue which many consumer groups have been talking about for years – differences in actual vs. advertised network speeds. The FCC has found a large gap between the average speeds consumers actually receive and the advertised speeds. Internet service providers generally claim that their speeds grow by 20 percent annually.

The average download speed most Americans currently can get ranges from 6.7-9.6 mbps with an average of about 8 mbps; upload speeds however are around 1 mbps.  However, looking at the actual download speeds, most Americans can only get about 3.1 megabits per second, which is 40 percent to 50 percent lower than the advertised speeds. The same holds true for upload speeds, with the actual being closer to 0.5 mbps.

This disparity however depends on the type of technology. Cable seems to have a better ratio of actual vs. advertised of digital subscriber line (DSL) and satellite has slightly higher differences.  This problem is not unique to the United States. In the United Kingdom, studies found that actual speeds were typically about 57 percent of the advertised speeds.

The next section of the plan goes into mobile broadband availability. Many studies have shown that mobile broadband has become the predominant way for minorities and low-income individuals to connect, but the FCC chooses to focus on terrestrial-based connectivity since it provides the highest speeds.

Citing data from American Roamer, it looks like 60 percent of the U.S. land mass has 3G service. This constitutes about 77 percent of all the U.S. population. Twelve percent live in an area served by two providers while 9 percent live in an area served by one.

The expansion of 3G services soon will be ending as most mobile phone providers are looking to move to the faster 4G services such as long-term evolution (LTE technology) or WiMax.

Verizon Communications plans to cover over 285 million people with 4G by the end of 2013 while Sprint plans to use OneMax through its subsidiary company ClearWire.  AT&T, along with Metro PCS, also plans to adopt LTE technology and start deployment in 2011, when LTE users will be able to more easily switch between networks.