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America Spends More Money on Slower Internet

This article was in Bloomberg: U.S. Internet Users Pay More for Slower Service.  I've read many pieces like this, but can't help myself.  The problem is familiar.  But each time, I hope to read that a solution is brewing somewhere.  After having lived and traveled in Asia, it was disheartening to see the state of broadband here.  Discovered that my Internet in Hawaii was half the speed and much more expensive than what I enjoyed in Taipei, Taiwan. 


In 2004, the Lafayette utilities system decided to provide a fiber-to-the-home service. The new network, called LUS Fiber, would give everyone in Lafayette a very fast Internet connection, enabling them to lower their electricity costs by monitoring and adjusting their usage.

Push-back from the local telephone company, BellSouth Corp., and the local cable company, Cox Communications Inc., was immediate. They tried to get laws passed to stop the network, sued the city, even forced the town to hold a referendum on the project -- in which the people voted 62 percent in favor. Finally, in February 2007, after five civil lawsuits, the Louisiana Supreme Court voted, 7-0, to allow the network.

From 2007 to mid-2011, people living in Lafayette saved $5.7 million on telecommunications services.

Since Lafayette went down this path, other communities have followed. According to the Institute for Local Self-Reliance, a group that advocates for municipal fiber networks, these community-owned networks are generally faster, more reliable and cheaper than those of the private carriers, and provide better customer service.

. . . All Americans need high-speed access, just as they need clean water, clean air and electricity. But they have allowed a naive belief in the power and beneficence of the free market to cloud their vision. As things stand, the U.S. has the worst of both worlds: no competition and no regulation.

The "municipal fiber networks" idea was new to me, so I had to look up the organization mentioned in the story: Institute for Local Self-Reliance - Broadband Initiative.  I'd be curious to know if there are similar programs or projects underway in Hawaii.

South Korea (see NY Times article) is a notable example of a country whose government has made high-speed Internet a national priority.  Start-ups and entrepreneurs could launch ambitious web projects if they had ubiquitous, fast Internet.  Building the infrastructure could provide a platform for innovation.

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Comment by John on January 31, 2013 at 6:52pm

Here's two interesting pieces on why calls for more bandwidth are overdone.

Comment by Brian on January 25, 2013 at 8:46pm
Oceanic cable is mediocre. I'd love fiber to the curb. It's easy for people to shill Oceanic when they've never had better connectivity. The "why would I need that" argument is pretty weak. Faxes and telexes worked great at the time too. Along with horse drawn buggies.. etc
Comment by Chris Runnells on January 18, 2013 at 12:08pm

I also think that you're coming from a place of actually having a fast internet connection. There are still a lot of places (the rest of the state, not just O'ahu) that don't have access to Oceanic internet. I can list a half-dozen people who don't even have access to DSL, and are using Dialup or a slow 3G connection. I'm in South Kona, on HawaiianTel DSL, and while it's fairly quick during the day (~1.5mpbs up on a good day) it absolutely goes to shit at night, because HT won't invest in better equipment to serve all of their customers in the area. 

I dream of being able to stream Hulu and Youtube after 7pm, even at the lowest quality.

Comment by Alex on January 7, 2013 at 4:11pm

But do you really not see it: if you use your bandwidth at top speed, increasing that top speed would enable you to do what you faster and more efficient? If you upload HD video, surely you know that you are waiting a long time to make the upload fixed. Sure you CAN do it on a regular BB, but you also CAN upload that vid using your 56kb just takes longer. 

Another point to this that waiting for us to actually run out of bandwidth leaves you hanging. For Hawaii it is especially critical since increasing bandwidth to the island is a whole different effort than running a cable from new York to new Jersey

Look at what Ian Livingstone, life president of video game publisher Eidos said: ″What we need is super-speed broadband,″  Pointing to the gaming industry move from product to service...forecasted to growing from $50b to $90b by 2015. If you want industries to establish themselves you have to be part of that push.

Faster broadband doesn't immediately get soaked up, but it does lead to greater investment in bandwidth-intensive services, and that will increase usage and expand the economy. The functions are sometimes a bit  intangible, but they are definitely there, and in this high speed broadband is a fundamental axiom for success.  

So people please participate in my study :-) Participate in the Future of Broadband in Hawaii study 

Comment by John on January 1, 2013 at 10:06pm

David, thanks for the thoughtful feedback.

All of those things are valuable but most of the broadly applicable ones you can accomplish today with an Oceanic connection

- I work from home and all the other guys who work with me work from home. And it's great and we do it will cable modem connections.

- We upload HD videos all the time for reports / training we do for our members - again through generic cable modem connections.

As for ohana familes, that I don't know. Maybe they need more bandwidth. I can't speak for them.

The other things that need more bandwidth - HD videoconferencing, telehealth imagery scans, telescopes - are fairly niche applications. 

What's the killer app that the mass market says, 'Hey cable modem isn't enough?"

Comment by David Lassner on January 1, 2013 at 9:22am

John - Not sure if this will resonate for you, but here's the opening of a piece I wrote almost 4 years ago when I was trying to understand this.

Imagine high-definition videoconferencing enabling you to participate in office meetings from home so you can avoid traffic and reduce your carbon footprint. Imagine your father consulting from home with his physician about early-onset Alzheimer's, with the physician able to see confusion on his face. Imagine your son uploading the high-definition video he just finished editing to complete his high school capstone assignment. Imagine your daughter remotely operating a telescope located at the top of a mountain, while watching the massive amounts of data being collected in real time.

(The full piece is at:

A few key elements of the thinking that drives action in places that view broadband as critical infrastructure for society rather than purely as a product:

• It serves multiple users in the home/office at once rather than just one person/application.  This is especially relevant in Hawaii, where we have a high proportion of multi-generational households.

• It provides high-speed upload capabilities, ideally symmetric.  At a workshop one day I heard from a local freelance journalist that he had problems uploading large videos to national outlets like CNN, even with Business Class broadband.  Other examples include HD videoconferencing (which requires low latency), sending telehealth imagery scans from home, and experimenting with server-based services.

• As Alex noted, new capabilities drive innovation.  Colleges and universities were some of the first sites to make the leap to "always-on" full-speed Internet-connected Ethernet ports for all, and it shouldn't surprise anyone that fast networks helped incubate the ideas that became Google and Facebook.  It would be great if people could start and run tech-based companies that produce and distribute content, as well as consume content, from home.

By the way, for context in thinking big, some people consider files of hundreds of MBs to be small.  As one local example, the Pan-STARRS telescope on Maui already generates over 2TB per night and will be doubling that with next year's upgrade.


Comment by John on December 31, 2012 at 7:51pm

I don't have much waiting at all. To the extent there is a delay, it's no longer bandwidth related but processing on the server and client side.

As for large files, I mean hundreds of MBs. Like most users, I download far more often that I upload. Even when I upload large videos, even if it takes a few minutes, it runs in the background while I work on other things.

For me, there is no clear productivity gains that I could get from higher bandwidth. And I have tried super fast connections (100Mb/s or 1Gb/s symmetrical) and I found little practical difference for what I do.

And I work from home all the time, so it's not blocking me from 'saving a drive'.

I am still waiting to hear the specific high value applications higher bandwidth will enable beyond what can be done with the entry level Oceanic connection.

Comment by Alex on December 31, 2012 at 7:45pm

Definitely fair to ask why. It is the same game now that it was a while ago. You still have to wait. Anytime you wait, you lose productivity. Higher bandwidth yields a lot of different dynamics, in addition to productivity. How about not having to drive to work everyday. Sure many people can already do parts of their job from home, but not having a long drive would lead to a significant potential increase in productivity.

You can also look at it as a future planning effort. Knowing what we do know about how the demand will be in the future planning now is probably something that can be good in terms of not be the state that ends up like the last holdout with dialup on the street.

What do you mean is a large file? What is your ratio? Can you upload that same file in the same time? If you are transferring a lot of data, back and forth upload is as important. 

Comment by John on December 31, 2012 at 7:25pm

There's diminishing marginal utility to all goods. For example, do most consumers really need faster CPUs on their PCs today? Not really. 10 years ago of course that was different. People regularly felt the pain of a super slow PC.

When I was on dialup, I absolutely felt the pain - from waiting for pages to load, and worse if I needed to download anything.

Now on my Oceanic cable modem connection, I can download even huge files in minutes, I never have any issue with bandwidth to watch Hulu or Youtube, etc.

If we are going to complain about not enough bandwidth, I think it's fair to say specifically what you could do with more.

Comment by Alex on December 31, 2012 at 7:18pm

I am quite sure people on dialups said the same thing some years ago. :) Does then the bandwidth drive the new services or does the services drive bandwidth demand? It is probably a mix, but surely you'd see the problem for a billion dollar service like youtube to exist given a demand using only dialup services? It is also about more than bandwidth...issues like reliability and recoverability are huge for an economy that increasingly is dependent on bandwidth. 

I think we'd easily discover the potential in higher bandwidth if we had it.


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