Government planners often are too optimistic about what their proposed programs can achieve. In the case of broadband, they have tended to be too modest. The U.K. government launched in 2010 an effort to enable superfast internet access across the country. Keep in mind that a year earlier, the government said it wanted a 2 Mbps minimum speed across the country.
In 2011 the goal goal was bumped up 24 Mbps per household by about 2015. To be sure, there is a difference between a minimum floor and a maximum aspiration. But past experience with speed increases--even in 2010--should have prompted lawmakers and policymakers to aim higher.
Speeds increase at Moore's Law rates, one can argue, at least for some suppliers, such as the cable companies.
Comcast has doubled speed every 18 months, for example. In 2010, typical Comcast speeds already were up to 100 Mbps. Few customers bought the fastest-available service, of course. But the minimum speed of about 12 Mbps grew to about 50 Mbps by 2015. Using the Moore’s Law doubling in 18 months would have produced speeds in excess of 100 Mbps by 2015, which is what happened.
This example from the Australian National Broadband Network actually is too conservative. Extrapolating from 1985, it suggests typical internet access speeds “should” have grown from about 10 Mbps in 2009 to perhaps 100 Mbps by 2015.
When at least some suppliers are doubling speeds every 18 months, most targets and goals set by government are going to be eclipsed very quickly, no matter how ambitious the goals seem at the moment.
The point is that although government goals will tend to focus on minimums, as for universal service, aspirational targets need to incorporate what we know about Moore’s Law and its application to internet access bandwidth.
With or without any specific government policies (other than staying out of the way), typical and minimum speeds would double about every 18 months to 24 months. So, one might argue, the U.K. government goal quickly was surpassed by commercial supply that did, in fact, increase at Moore’s Law rates, as did computing.
Most rational observers would have argued that physical networks could not improve speed so fast, as labor intensive and capital intensive as outside plant remains. Perhaps few thought Moore’s Law rates of progress were possible for outside plant. On the other hand, few probably believed Moore’s Law would apply to computing hardware, either.
The most-startling strategic assumption ever made by Bill Gates was his belief that horrendously-expensive computing hardware would eventually be so low cost that he could build his own business on software for ubiquitous devices. .
How startling was the assumption? Consider that, In constant dollar terms, the computing power of an Apple iPad 2, when Microsoft was founded in 1975, would have cost between US$100 million and $10 billion.
The point is that the assumption by Gates that computing operations would be so cheap was an astounding leap. But my guess is that Gates understood Moore’s Law in a way that the rest of us did not.
Reed Hastings, Netflix founder, apparently made a similar decision. For Bill Gates, the insight that free computing would be a reality meant he should build his business on software used by computers.
Reed Hastings came to the same conclusion as he looked at bandwidth trends in terms both of capacity and prices. At a time when dial-up modems were running at 56 kbps, Hastings extrapolated from Moore's Law to understand where bandwidth would be in the future, not where it was “right now.”
“We took out our spreadsheets and we figured we’d get 14 megabits per second to the home by 2012, which turns out is about what we will get,” says Reed Hastings, Netflix CEO. “If you drag it out to 2021, we will all have a gigabit to the home." So far, internet access speeds have increased at just about those rates.