Australia Broadband Access Plan Will Feature Open Access

Would-be bidders for the Australian broadband access upgrade now seem to be just two: Telstra, the incumbent, and a rival bidding group called Terria, lead by long-time foe Optus, remain in serious contention, according to the Australian. Final proposals are due on November 26. The project entails construction of a  national broadband network that will reach 98 per cent of Australians.

The network is expected to cost A$9.4 billion ($7.8 billion), and the Australian government will help fund about A$4.7 billion worth of the cost. 

Both bidders say they will (obviously) abide by rules requiring wholesale access to the network by retail competitors, though Telstra opposes any formal structural separation of the network, while the Optus-lead group thinks that is not a bad idea. 

Are Broadband Prices Rising or Falling?

It typically is somewhat difficult to measure price changes for a variety of consumer goods, in large part because the "product" changes over time, so nominal prices tell part of the story, but not the whole story. PC hardware, for example, has seen both nominal price declines and vast improves in functionality, all at the same time. That tends to be true in the software area as well, at least in terms of number of features and capabilities.

Multi-channel video service prices tend to rise over time, but the nature of the product also changes. There are more channels and features, even as the price rises.

In the voice area, one can note that mobile and fixed voice services now feature many more features and lower nominal prices, for the most part, though some prices, as in the case of text messaging, are rising. 

One might argue that when service providers increase bandwidth without increasing prices, something like that process of product improvement is at work. Still, recent data from the Pew Internet & American Life project suggests that broadband prices are a bit lower, while dial-up prices are rising. 

Broadband users reported an average monthly bill of $34.50 in April 2008, down from $36 in December 2005, researchers at Pew say. That has happened despite the fact that nearly one-third of home broadband users have a premium broadband

service that gives them a faster connection to the Internet, and for which they pay a higher monthly price. 

Dial-up users, on the other hand, reported monthly bills of $19.70, up nine percent from the $18 figure from December 2005.

The reported average cost of digital subscriber line service ($31.50) continues to be less than cable modem service ($37.50), Pew researchers say.

Given the fact that higher-priced, but higher-capacity products increasingly are available, the simple question "are broadband prices increasing or decreasing" cannot be answered very well. If users want more bandwidth, and buy plans that provide that access, but at higher prices, that is comparing apples and oranges. 

To get to an answer, one would have to compare prices over time for products of equivalent functionality. Aggregate prices alone will not provide answers. 

Wireless Backhaul: Big Bucks?

Mobile backhaul has been a big topic of discussion among service providers over the past several years. In part the interest is driven by the concentrated nature of the opportunity. With multiple new broadband networks being built, and upgrades required to virtually all the existing mobile networks,  providers have a few big customers who can order up thousands of links at a time.

And though it remains unclear just how much more backhaul bandwidth will be required, at least some observers think that once networks such as Clearwire get up to speed, and acquire some customer mass, the requirements at each base station might be as high as 2 Gbps. For providers used to selling T1 connections to mobile cell sites, that's a huge opportunity. 

At Least 96% of U.S. Households Can Buy Cable Modem Service

In Canada, virtually all households in urban centers and 78 percent of households in rural areas were within the broadband footprint at the end of 2006, says the Organization for Economic Cooperation and 

Broadband coverage is also extensive in the OECD’s second largest country, the United States. High-speed cable modem service is available to 96 percent of end-user premises in the United States. DSL coverage is in the high-70s percent penetration. 

Metered or Bucketed Usage Plans? Only One is a Problem

Looking at moves to bandwidth caps by Comcast and other service providers, some observers are concerned about the possible impact of what is termed "metered" usage on user behavior. It's a reasonable concern. Back in the old days of dial-up access, metered usage clearly depressed usage, which exploded in the U.S. market when AOL moved to "unlimited" packaging. 

So observers are right to worry about potential depressing effects on new user behaviors and applications. The concern probably is misplaced, however. There is a difference between "buckets," which feature a usage cap, and "metered" usage. The customer reaction also is quite different. 

Metered usage isn't welcomed by users, primarily because it introduces uncertainty. Users do not like to wonder what their bills will look like, so there is a clear preference for predictability.

But if the buckets are sized appropriately, and when users have some experience to gauge the appropriate buckets, usage does not seem to suffer. Strict metering undoubtedly would depress usage. Buckets will not, if constructed with reasonable parameters and when users have some way to predict and adjust their plans if needed.

The other issue is that lots of other services are offered on a strictly metered basis, and that can be good for light users. Light text message users benefit from a la carte, metered usage charges. Moderate usage quickly allows users to figure out that a bucket is a better deal.

And even metered usage is tolerated, if the prices are reasonable enough. Most users pay for water, natural gas or electricity on a simple metered basis. As long as users know roughly what to expect, and the rates are not outrageous, it does not seem to be a problem. 

Buckets of wireless minutes, buckets of usage that blur the distinction between "long distance" and "local" consumption clearly have encouraged usage. 

Telecom Professionals Say Wireless is Where the Action Is

A recent survey of telecom professionals confirms what industry professionals probably also agree on: wireless is where the action now is. Some 72 percent of respondents believe the biggest opportunities lie within three categories: wireless (40 percent), infrastructure engineering and manufacturing (16 percent), and mobile application development (16 percent). So make the votes ofr wireless 56 percent of the opportunity.

When asked about the immediate future of telecommunications, 70 percent of respondents said they believe the industry would grow or remain consistent, according to TelecomCareers, an online job board for telecommunications, media and technology professionals.

Does Chrome Matter?

Does Google’s new Chrome browser matter? Lehman Brothers analyst Douglas Anmuth thinks so, says Erick Schonfeld, Seeking Alpha commentator. Anmuth points out that Firefox having gained approximately 20 percent market share over the past four years. He thinks Google Chrome could be adopted faster, and gain 15 percent to 20 percent share within two years.

A lot of the attention so far has been on the possibility of Chrome being a Windows killer, by supercharging Web browsing and Web apps so you really won’t need desktop applications. Anmuth believes mobility might be the bigger play, if, as he expects, Chrome will be bundled directly on Android mobile devices. 

The other angle: Google Gears, used to synchronize online documents and data for offline use, might be quite valuable for mobile applications that must operate in a fluid access environment. 

And Google Gears can be very useful for Web apps on mobile devices, where network connections can be spotty.