BROACHING BROADBAND: The future of fat pipes

An introduction

• The broadband market is currently embryonic. Even in the most advanced territories, penetration does not yet exceed 50% of internet-enabled homes.
• At end 2001, just over 1% of UK households had broadband internet access. This is one of the worst performances in Europe; the equivalent figure for Sweden is 10%.
• Out of the OECD?s total of nearly 22 million broadband internet access subscribers, over 18 million are accounted for by non-EU territories.

Broadband advantages and technologies

• There are currently six principal types of broadband connection: ADSL, cable, satellite, LAN, mobile wireless and fixed wireless.
• Broadband internet access does not tie up the phone-line; it is ?always-on?; and software can be installed or upgraded over the web.
• In practice, broadband speeds depend on the number of people using a particular service provider?s offering and on the capacity of the internet?s infrastructure.

Broadband adoption factors

• The key factors influencing broadband take-up include the proportion of active internet users in different territories; the availability and cost of broadband access and the extent of government intervention.
• The UK?s low broadband penetration is arguably due to a small proportion of active internet users; low availability of cable modems and/or DSL lines; the lack of broadband subsidies; weak governmental commitment to telecommunications deregulation and the high price of broadband access.

Forecasts

• The territories with the highest future broadband growth potential are the USA, Canada, South Korea, Sweden, Denmark and Germany.
• While 41% of US households are likely to have a broadband internet connection by 2006, the EU as a whole is unlikely to exceed 25% penetration by 2005.

Developing broadband content

• Broadband is likely to be an environment in which consumers will be prepared to pay for premium digital content and services. Apart from the enhanced internet experience itself, these could include: media downloads, streamed audio, network gaming, consumer ASP services, teleworking; IP telephony, streamed video; and home networking.
• Broadband penetration appears to have grown to date on the simple appeal of fast internet access. The lack of dedicated broadband content is mainly due to the cost of acquiring or creating it, difficulty of controlling quality of service for streamed media across the open internet and concerns over copyright theft.
• The benefits of broadband are not confined to owners of high-bandwidth content. Beneficiaries could include healthcare, financial services, distance learning and travel service providers whose offering requires a high level of trust. Low-bandwidth assets can be re-valorised through the addition of high-bandwidth components.

The publisher?s viewpoint

• Broadband matters to publishers because the internet is likely to become the digital content transmission medium; and broadband internet access enables a plethora of new applications.
• Large conglomerations of textual and graphical content will also benefit from broadband, since downloading becomes easier and faster.
• Gaming could be a killer app. The emergence of the ASP model could entail the eventual abolition of the CD-ROM.
• Broadband signals a shift in thinking away from the provision of packaged media towards the availability of networked content.
• Publishers and the content community in general must either reversion existing assets or come up with original content designed specifically for this new environment.