AI is a General-Purpose Technology, Will Tend to Create Abundance in Place of Scarcity

The recently-settled strike of Hollywood writers, in substantial part related to the anticipated impact of artificial intelligence on writer employment and participation in residuals, is likely to be replicated--in concern about AI impact on employment and market value--in many other industries. 

Any examination of key technology developments over the past 30 years would suggest such an outcome, based on the impact lower marginal costs of personal computer, internet, mobile, and cloud computing industries have had on economic growth, productivity, the rise or fall of segments of the economy, jobs, value and income of workers in industries affected by the lower marginal cost of those technologies. 

Marginal cost declines have led to lower prices for products and services, which has increased consumer spending and boosted economic growth. But since one participant’s cost is another participant’s revenue, for every winner there is a loser. 

This has made these products and services more affordable for consumers, but reduced revenue and profits for suppliers. On the other hand, falling prices have the expected effect of higher usage. Lower costs of AI will encourage its wider use. And it would be hard to find examples of widespread new technology usage that did not affect supplier (and workers are suppliers of labor) prices. 

For example, the price of personal computers has fallen by more than 90 percent since the 1980s, and the price of internet access has fallen by more than 95 percent since the 1990s (price per unit), even using conservative assumptions about “average” or “typical” speed. Cost per Mbps of performance is therefore somewhat overstated by 50 percent or so in 2023, for example. 

Year	Typical speed (Mbps)	Absolute cost ($ per month)	Cost per Mbps ($ per Mbps)	Assumptions about median or average speed
1990	0.1	400	4000	Assumed that the typical speed in 1990 was 0.1 Mbps, based on the fact that the first commercial dial-up internet service was launched in 1990 and had a maximum speed of 0.144 Mbps.
1995	0.5	200	400	Assumed that the typical speed in 1995 was 0.5 Mbps, based on the fact that the first commercial DSL service was launched in 1995 and had a maximum speed of 1.5 Mbps.
2000	1	100	100	Assumed that the typical speed in 2000 was 1 Mbps, based on the fact that cable internet was widely available in 2000 and had a typical speed of 1 Mbps.
2005	5	60	12	Assumed that the typical speed in 2005 was 5 Mbps, based on the fact that broadband internet was widely available in 2005 and had a typical speed of 5 Mbps.
2010	10	50	5	Assumed that the typical speed in 2010 was 10 Mbps, based on the fact that fiber internet was beginning to be deployed in 2010 and had a typical speed of 10 Mbps.
2015	25	40	1.6	Assumed that the typical speed in 2015 was 25 Mbps, based on the fact that cable internet was widely available in 2015 and had a typical speed of 25 Mbps.
2020	50	60	1.2	Assumed that the typical speed in 2020 was 50 Mbps, based on the fact that fiber internet was more widely available in 2020 and had a typical speed of 50 Mbps.
2023	100	60	0.6	Assumed that the typical speed in 2023 is 100 Mbps, based on the fact that fiber internet is becoming more widely available and has a typical speed of 100 Mbps.

Marginal cost declines have also led to increased productivity, to the extent one believes the productivity of an office or knowledge worker actually can be measured. 

Disintermediation has been a hallmark of the internet era, spawning any number of “direct to consumer” distribution models” e-commerce; video and audio streaming being examples. 

Additionally, the rise of cloud computing has led to the substitution of remote computing “as a service” for ownership and operation of computing hardware and software. This has drastically reduced startup costs for software firms, for example. 

The point is that AI is going to affect the economy, assuming it is a general-purpose technology such as roads, electricity, computers, cloud computing, the internet or home broadband. 

And all those prior technologies have led to new industries being formed, work processes and demand being altered, value created or lessened in different parts of the value chain. Hollywood writers fear AI will replace some of what they do, leading to lower wages and residuals. 

Whatever the immediate perceived results of the settlement, the long-term impact is not likely eliminated. Work, life, the economy all are likely to be reshaped by AI, and not always in ways people might prefer.

How fast Will Fixed Networks Be, by 2050?

How fast will the headline speed be in most countries by 2050? Terabits per second is the logical conclusion, even if the present pace of speed increases is not sustained. Though the average or typical consumer does not buy the “fastest possible” tier of service, the steady growth of headline tier speed since the time of dial-up access is quite linear. 

And the growth trend--50 percent per year speed increases--known as Nielsen’s Law--has operated since the days of dial-up internet access. Even if the “typical” consumer buys speeds an order of magnitude less than the headline speed, that still suggests the typical consumer--at a time when the fastest-possible speed is 100 Gbps to 1,000 Gbps--still will be buying service operating at speeds not less than 1 Gbps to 10 Gbps. 

Though typical internet access speeds in Europe and other regions at the moment are not yet routinely in the 300-Mbps range, gigabit per second speeds eventually will be the norm, globally, as crazy as that might seem, by perhaps 2050. 

The reason is simply that the historical growth of retail internet bandwidth suggests that will happen. Over any decade period, internet speeds have grown 57 times. Since 2050 is three decades off, headline speeds of tens to hundreds of terabits per second are easy to predict. 

source: FuturistSpeaker 

Some will argue that Nielsen’s Law cannot continue indefinitely, as most would agree Moore’s Law cannot continue unchanged, either. Even with some significant tapering of the rate of progress, the point is that headline speeds in the hundreds of gigabits per second still are feasible by 2050. And if the typical buyer still prefers services an order of magnitude less fast, that still indicates typical speeds of 10 Gbps 30 Gbps or so. 

Speeds of a gigabit per second might be the “economy” tier as early as 2030, when headline speed might be 100 Gbps and the typical consumer buys a 10-Gbps service. 

source: Nielsen Norman Group 

If consumers on every continent purchased service at equivalent rates, in 2050 one would expect Asia to represent nearly 60 percent of demand, Africa nearly 20 percent. Europe would represent seven percent of demand, South America nine percent, North America four percent. 

source: Chegg 

Most observers would guess Asia will do about that well, while Africa lags. Europe and North America likely will over index, while South America might do about what the population alone would predict. 

Though the correlation might be less than one might expect, fiber to home deployment should correlate with terabit take rates in 2050. The wild card is 8G mobile access. As mobile speeds likewise continue to increase, most consumers might prefer wireless access to any fixed connection. 

In mobility as in the fixed network, the theoretical headline speed is not matched by mass market commercial experience. Still, the pattern has been that each next-generation mobile network features data speeds an order of magnitude higher than the prior generation. 

source: Voyager8 

Assume that in its last release, 5G offers a top speed of 20 Gbps. The last iteration of 6G should support 200 Gbps. The last upgrade of 7G should support 2 Tbps. The last version of 8G should run at a top speed of 20 Tbps.

At that point, the whole rationale of fixed network access will have been challenged, in many use cases, by mobility, as early as 6G. By about that point, average mobile speeds might be so high that most users can easily substitute mobile for fixed access.

Regulators Cannot Keep Up with Pace of Change in Computing and Communications

It often has been said that regulators cannot keep up with the pace of change in computing, broadband and applications. That has proven to be true for regulators looking at home broadband performance. 

About 2010 or so Ofcom, the U.K. regulator laid out a national goal for “superfast” internet access of about 30 Mbps, at a time when the typical speed most consumers were able to use was about 6 Mbps.

Average actual U.K. fixed-line residential broadband speeds grew from about 3,6 Mbps in 2008 to about 15 Mbps in 2013. 

source: Ofcom 

In 2011, Ofcom warned of low interest in 50-Mbps services, for example. 

Ofcom also worried about low interest in 30 Mbps services as well. 

That same year, a 50-Mbps internet access connection (home broadband) cost close to $100 a month. 

The next formal goal will be gigabit per second access, which shows you just how fast improvements are coming in the home broadband business. 

That same degree of improvement was seen in the U.S. market as well. Back in 2010 average U.S. home broadband speeds were about 5 Mbps. By 2019 speeds had climbed to about 33 Mbps. 

U.S. median home broadband speeds were about 131 Mbps in October 2021.  

source: Nielsen Norman Group 

By 2050 the home broadband headline speeds are likely to be in terabits per second. Though the average or typical consumer does not buy the “fastest possible” tier of service, the steady growth of headline tier speed since the time of dial-up access is quite linear. 

And the growth trend--50 percent per year speed increases--known as Nielsen’s Law--has operated since the days of dial-up internet access. Even if the “typical” consumer buys speeds an order of magnitude less than the headline speed, that still suggests the typical consumer--at a time when the fastest-possible speed is 100 Gbps to 1,000 Gbps--still will be buying service operating at speeds not less than 1 Gbps to 10 Gbps. 

Though typical internet access speeds in Europe and other regions at the moment are not yet routinely in the 300-Mbps range, gigabit per second speeds eventually will be the norm, globally, as crazy as that might seem, by perhaps 2050. 

The reason is simply that the historical growth of retail internet bandwidth suggests that will happen. Over any decade period, internet speeds have grown 57 times. Since 2050 is three decades off, headline speeds of tens to hundreds of terabits per second are easy to predict. 

source: FuturistSpeaker 

Some will argue that Nielsen’s Law cannot continue indefinitely, as most would agree Moore’s Law cannot continue unchanged, either. Even with some significant tapering of the rate of progress, the point is that headline speeds in the hundreds of gigabits per second still are feasible by 2050. And if the typical buyer still prefers services an order of magnitude less fast, that still indicates typical speeds of 10 Gbps 30 Gbps or so. 

Speeds of a gigabit per second might be the “economy” tier as early as 2030, when headline speed might be 100 Gbps and the typical consumer buys a 10-Gbps service. 

source: Nielsen Norman Group 

AT&T Launches Commercial 2-Gbps Symmetrical and 5-Gbps Symmetrical Fixed Network Internet Access

As predicted by Edholm’s Law, internet access speeds continue to climb. AT&T, for example, just activated symmetrical 2-Gbps and symmetrical 5-Gbps service for 5.2  million locations across 70 U.S. markets, with plans to deploy across the whole footprint in 2022 and later years. 

Edholm’s Law states that internet access bandwidth at the top end increases at about the same rate as Moore’s Law suggests computing power will increase. 

Nielsen's Law, like Edholm’s Law, suggests a headline speed of 10 Gbps will be commercially available by about 2025, so the commercial offering of 2-Gbps and 5-Gbps is right on the path to 10 Gbps. 

source: NCTA  

Headline speeds in the 100-Gbps range should be commercial sometime around 2030. 

How fast will the headline speed be in most countries by 2050? Terabits per second is the logical conclusion. Though the average or typical consumer does not buy the “fastest possible” tier of service, the steady growth of headline tier speed since the time of dial-up access is quite linear. 

And the growth trend--50 percent per year speed increases--known as Nielsen’s Law--has operated since the days of dial-up internet access. Even if the “typical” consumer buys speeds an order of magnitude less than the headline speed, that still suggests the typical consumer--at a time when the fastest-possible speed is 100 Gbps to 1,000 Gbps--still will be buying service operating at speeds not less than 1 Gbps to 10 Gbps. 

Though typical internet access speeds in Europe and other regions at the moment are not yet routinely in the 300-Mbps range, gigabit per second speeds eventually will be the norm, globally, as crazy as that might seem, by perhaps 2050. 

The reason is simply that the historical growth of retail internet bandwidth suggests that will happen. Over any decade period, internet speeds have grown 57 times. Since 2050 is three decades off, headline speeds of tens to hundreds of terabits per second are easy to predict. 

source: Nielsen Norman Group, Future Speaker

 

Of course, the typical consumer customer does not typically buy the top-available speed at any given point of time. 

AT&T Fiber 2 GIG costs $110 per month plus taxes. AT&T Business Fiber 2 GIG costs $225 per month plus taxes. The “typical” consumer household probably now pays about $50 a month for internet access. 

AT&T Fiber 5 GIG: $180 per month plus taxes. AT&T Business Fiber 5 GIG costs $395 per month plus taxes. 

The point is not that so many consumer households will buy the top offers. The point is that--with higher “fastest” speed tiers, the typical buyer also tends to move up. As more customers buy the 2-Gbps or 5-Gbps services, a change in the adoption rate will happen when we hit about 10-percent adoption of either service. 

Adoption of 1-Gbps service now has passed the 10-percent point, so we should see accelerated adoption of gigabit services. Where half of U.S. consumers now buy services in the 100 Mbps to 200 Mbps range, we should see a shift of those buyers to higher-speed services over the next few years, as the top end also continues to move. 

Once 2-Gbps adoption hits about 10 percent of households, half of the rest of the market will start to move to speeds more in the range of 400 Mbps. Once 5-Gbps adoption hits about 10 percent, half the market will start a move towards gigabit service, history suggests.

Faster Home Broadband Just Keeps Coming, As Edholm and Nielsen Laws Predict

Google Fiber will launch 5-Gbps and 8-Gbps internet access service in early 2023. Both products will offer symmetrical upload and download speeds, Google says. 

Google Fiber launched gigabit service in 2010, 2-Gbps service in 2020 and (and is testing 20-Gbps service. 

The 5-Gbps tier will cost $125 per month, while the 8-Gbps tier will cost $150 per month. 

Separately, it seems increasingly likely that Comcast will begin to introduce service at speeds possibly in the 4-Gbps to 6-Gbps range in 2023. And those services might well be symmetrical, able to extend to 10-Gbps symmetrical. 

Those speed increases are predictable and expected according to two theorems. 

Nielsen's Law suggests that the top-end speed will grow 50 percent per year. Edholm’s Law states that internet access bandwidth at the top end increases at about the same rate as Moore’s Law, which is about a doubling every 18 months or so. 

That means the top-end home broadband speed could be 85 Gbps to 100 Gbps by about 2030. 

source: NCTA  

Nielsen Norman Group estimates suggest a headline speed of 10 Gbps will be commercially available by about 2025, so the commercial offering of 2-Gbps and 5-Gbps is right on the path to 10 Gbps. 

AT&T, for example, just activated symmetrical 2-Gbps and symmetrical 5-Gbps service for 5.2  million locations across 70 U.S. markets, with plans to deploy across the whole footprint in 2022 and later years. 

There is widespread expectation that the headline speed for home broadband, in many markets, will be 10 Gbps by about 2025. 

By other rules of thumb, that also suggests the "typical" home broadband customer will be buying service at rates between 1 Gbps and 2 Gbps, with a significant percentage buying service at 4 Gbps. 

Nielsen’s Law has operated since the days of dial-up internet access. Even if the “typical” consumer buys speeds an order of magnitude less than the headline speed, that still suggests the typical consumer--at a time when the fastest-possible speed is 100 Gbps to 1,000 Gbps--still will be buying service operating at speeds not less than 1 Gbps to 10 Gbps.  

source: FuturistSpeaker 

So top end speeds in the terabits per second are virtually inevitable by about 2050. The emergence of offers between 2 Gbps and 5 Gbps now is simply evidence that the trend continues. 

At the moment, top speeds in the U.S. market are in the 2 Gbps and 5 Gbps ranges.Comcast has introduced 3-Gbps services for business. Ziply has introduced symmetrical 2-Gbps service. Google Fiber has added 2-Gbps as well. 

Frontier Communications is doing the same. Verizon offers 2-Gbps Fios service. AT&T sells both 5-Gbps and 2-Gbps service. Many of those offers feature symmetrical bandwidth. 

Perhaps the greatest value change, though, is not the headline downstream speed, but the symmetrical speeds, as in the U.S. market asymmetrical services sold by cable operators have nearly 70 percent market share. 

Though the cable hybrid-fiber coax networks can be configured to support more upstream bandwidth, fully-symmetrical service typically requires switching to fiber-to-the-home platforms. 

To scale new capital investments, cable operators in many cases will choose to extend downstream speeds and lift upstream speeds, approaching or reaching fully symmetrical service with DOCSIS 4.0 before considering other measures such as switching to FTTH. 

If the “typical” customer buys a service operating at up to an order of magnitude less than the highest headline speed, we might infer that the typical home account--offered by ISPs with various speed plans--will be buying service at speeds between 500 Mbps and 800 Mbps in 2025. 

Keep in mind that Google Fiber’s footprint is quite limited, so not many households will be able to buy Google Fiber service, now generally available at either 1-Gbps or 2-Gbps speeds. In such cases, the headline speed and the median speed tend to be virtually identical. 

The real local market test will tend to be the 2-Gbps to 5-Gbps services sold by Comcast, which has the biggest home footprint, or AT&T, with perhaps the third-biggest footprint. But those services are marketed mostly to business customers, at this point.