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Aug 19 2009   6:03PM GMT

Fast Internet, pricing policies and the middle mile



Posted by: Tom Nolle
usage caps, DOCSIS 3.0, cable, middle-mile

Rogers Cable showed how different Canada and the U.S. are with its new DOCSIS 3.0-based offering. The service is 50Mb/2Mb, which is more asymmetrical than the U.S. market would typically offer, and furthermore it has a 175 GB/month usage cap.

In Canada, the notion of usage caps doesn’t generate the hysteria it does here in the U.S., but we believe that the only way caps would be avoided here would be by increasing the oversubscription levels of the middle-mile network, which would mean that users with “fast” Internet wouldn’t get proportionally higher effective speeds.

There is no way to legislate profitability or to set effective speed standards; Congress would never consider the moves, in our view. A realistic usage cap would benefit consumers by helping insure that they gained a real advantage from what’s likely to be an access speed war between cable and telcos.

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Aug 13 2009   4:00PM GMT

Internet regulatory policy and the “middle mile”



Posted by: Tom Nolle
Broadband, regulation, FCC, middle-mile

The notion of a government-subsidized Internet is enormously appealing to many, and nearly everyone in the media, so it always gets a lot of hype. There are, in fact, some programs to provide broadband subsidies, ranging from the limited U.S. rural subsidy program to the incredibly ambitious Australian new broadband network initiative.

We see few signs of any real trend toward general subsidization, however. Both the U.S and Australian programs are aimed primarily at dealing with the challenging economics of broadband where economic density is low. In the U.S., the FCC’s just-issued Notice of Inquiry (NOI) on the annual broadband report to Congress suggests that while the Commission is looking deeper into what broadband is and who has it, the changes are tiny steps not likely to generate revolutionary results any time soon.

We believe that in any event, the complexity of defining the real performance of broadband Internet services (which depend on access speed, oversubscription in the metro network and Internet peering performance, among many variables) will make it difficult to provide any meaningful subsidies. We wonder if either the U.S. or Australia has considered this “middle-mile” question adequately.

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