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 

Definitions Matter

Minimums, median and maximum all are valuable indices in life, business and nature, including measures of internet access adoption or “quality.” It also has to be noted that constantly moving goalposts--changing our definitions--is a way of creating permanent problems.

That is not to deny the usefulness of revising our definitions over time. It is a truism that yesterday's power user is today's typical user. 

The percentage of U.S. customers buying internet access at the minimum speeds keeps dropping, as customers migrate to tiers of service that offer higher speeds at the same or only slightly-higher cost. 

But such definitions matter for both consumers and suppliers. Customers might sometimes buy services that actually are overkill. Most internet access customers buy what they believe is good enough to support their actual use cases, and rarely what is the “best” available level of service. 

Suppliers might imperil their business models by forcing investment in facilities that customers will not use, overprovisioning service in ways that raise sunk costs of doing business without providing capabilities customers actually buy. 

Those buying patterns also suggest why some ISP offers that are not state of the art can still be commercially viable. The reason is that, beyond a certain point, additional speed provides no tangible user experience benefit.  

And permanent problems are essential for those who claim to be in the business of “solving those problems.” That matters for education, health, disease, economies, social and economic equality, sports and just about anything else you can think of. In other words, one cannot marshall public policy support to solve a problem that does not exist.  

To be sure, our definitions of “broadband” have evolved, and will continue to evolve. 50 years ago, broadband was defined as any speed at 1.5 Mbps or faster. Once upon a time, Ethernet ran at 10 Mbps, while fiber to the home offered 10 Mbps. Today’s systems all run much faster than that. 

But it also makes a difference to “problem solvers” that definitions are revised upwards. Doing so always creates a “bigger problem.” 

Changing the minimum definition of broadband would shift the size of the “underserved” population or locations, for example. Today, perhaps 20 percent of U.S. buyers of fixed network internet access purchase services at the minimum speed of 25 Mbps. 

Changing the definition to 100 Mbps would increase the size of the underserved locations to nearly half of all buyers. Again, we will keep increasing both minimum levels of service, customers will keep changing the speed tiers they purchase and internet service providers will keep supplying faster speeds. 

The point, however, is that changing minimum definitions does not change the number or percentage of tiers of service customers purchase or that ISPs supply. Already, we find that the percentage of customers buying the fastest-possible speeds (at least 1 Gbps) is in mid single digits. 

More to the point, the typical buyer prefers a service offering 100 Mbps to 400 Mbps. Changing “minimum” to “average” has consequences, arguably distorting our understanding of “good enough” levels of broadband speed. 

Benchmarks are valuable when trying to measure “progress” toward some stated goal. A minimum speed definition for broadband access is an example. But that does not obviate the value of knowing maximum and median values, either, especially when the typical U.S. internet access buyer routinely buys services significantly higher than the minimum. 

In the first quarter of 2020, for example, only about 18 percent of U.S. consumers actually bought services running at 40 Mbps or less. All the rest bought services running faster than 50 Mbps. 

source: Openvault

An analysis by the Open Technology Institute concludes that “consumers in the United States pay more on average for monthly internet service than consumers abroad—especially for higher speed tiers.” 

As always, methodology matters. The OTI study examines standalone internet access plans, even if that does not account for the plans most consumers actually buy. The figures do not appear to be adjusted for purchasing power differences between countries. Were that done, it might be clearer that average internet access prices are about $50 a month, globally. 

Global prices are remarkably consistent, in fact, when adjusting for purchasing power conditions in each country.  

Nor does any snapshot show longer term trends, such as lower internet access prices globally since at least 2008. A look at U.S. prices shows a “lower price” trend since the last century. U.S. internet access prices have fallen since 1997, for example. 

source: New America Foundation

The OTI study claims that, comparing average prices between markets with and without a municipal system shows higher prices in markets with government-run networks. Not all agree with that conclusion. 

“The OTI Report’s data, once corrected for errors, do not support the hypothesis that government-run networks charge lower prices,” says Dr. George Ford, Phoenix Center for Advanced Legal and Economic Public Policy Studies chief economist. 

“Using OTI’s data, I find that average prices are about 13 percent higher in cities with a municipal provider than in cities without a government-run network,” says Ford. 

Our definitions of “broadband” keep changing in a higher direction. Once upon a time broadband was anything faster than 1.5 Mbps. Ethernet once topped out at 10 Mbps. 

Today’s minimum definition of 25 Mbps will change as well. The point is that having a minimum says nothing about typical or maximum performance.

About 91 percent to 92 percent of U.S. residents already have access to fixed network internet access at speeds of at least 100 Mbps, according to Broadband Now. And most buy speeds in that range. 

source: Broadband Now

It is useful to have minimum goals. It also is important to recognize when actual consumers buy products that are much more advanced than set minimums. 

Good Outcomes Beat Good Intentions: How Dumb Are We?

Good intentions clearly are not enough when designing policies to improve home broadband availability in underserved areas. In fact, since 2021, more than three years after its passage, the U.S. Broadband Equity, Access, and Deployment (BEAD) program has yet to install a single new connection.  

It seems we were determined to make the perfect the enemy of the good, preventing construction until we mostly were certain our maps were accurate. A rival approach would have proceeded on the assumption that residents and service providers pretty much know where they have facilities and where they do not; where an upgrade can be conducted fast and easily, and where it cannot. 

And perhaps (despite the clear industry participant interests that always seem to influence our decisions) we should not have insisted on the “fastest speed” platforms. Maybe we’d have prioritized “good enough” connections that could be supplied really fast and enabled the outcomes we were looking for (getting the unconnected connected; getting the underserved facilities that do not impede their use of internet apps). 

This is not, to use the phrase, “rocket science.” We have known for many decades that “good enough” home broadband can be supplied fast, and affordably, if we use satellite (geostationary or low earth orbit, but particularly now LEO) or wireless to enable the connections. 

To those who say we need to supply fiber to the home, some of us might argue the evidence suggests relatively-lower speed (such as 100 Mbps downstream) connections supply all the measurable upside we seek, for homework, shopping, telework. The touted gigabit-per-second or multi-gigabit-per-second connections are fine, but there is very little evidence consumers can even use that much bandwidth. 

Study/Source	Key Findings
Distinguishing Bandwidth and Latency in Households' Willingness to Pay for Broadband Internet Speed (2017)	Consumers value increasing bandwidth from 10 to 25 Mbps at about $24 per month, but the additional value of increasing from 100 Mbps to 1 Gbps is only $19. This suggests diminishing returns for speeds beyond 100 Mbps.
Are you overpaying for internet speeds you don't need? (2025)	Research indicates that many Australians are overspending on high-speed internet connections they don't need. Most households can manage well with a 50 Mbps plan unless they engage in high-bandwidth tasks like 4K streaming or online gaming.
Simple broadband mistake costing 9.5 million households up to £113 extra a year (2024)	Millions of UK households are overpaying for broadband by purchasing higher speeds than necessary. Smaller households often need speeds up to 15 Mbps but pay for over 150 Mbps, wasting £113 annually.
ITIF (2023)	- US broadband speeds outpace everyday demands - Only 9.1% of households choose to adopt 250/25 Mbps speeds when available - Clear inflection point past 100 Mbps where consumers no longer see value in higher speeds
ITIF (2020)	- Average existing connections comfortably handle more than typical applications require - A household with 5 people streaming 4K video simultaneously only needs 2/3 of current average tested speed - Research shows reaching a critical threshold of basic broadband penetration is more important for economic growth than faster speeds
European Research (2020)	- Full fiber networks are not worth the costs - Partial, not full end-to-end fiber-based broadband coverage entails the largest net benefits
US Broadband Data Analysis	- Compared to normal-speed broadband, faster broadband did not generate greater positive effects on employment
OpenVault Q3 2024 Report	- Average US household uses 564 Mbps downstream and 31 Mbps upstream - Speeds around 500 Mbps sufficient for most families
FCC Guidelines	- 100-500 Mbps is enough for 1-2 people to run videoconferencing, streaming, and online gaming simultaneously - 500-1000 Mbps suitable for 3 or more people with high bandwidth needs

We might all agree that, where it is feasible, fiber to home makes the most long-term sense. But we might also agree that where we want useful home broadband speeds, right now, everywhere, with performance that enables remote work, homework, online shopping and all other internet apps, then any platform delivering 100 Mbps (more for multi-user households, but likely not more than 500 Mbps even in the most-challenging use cases) will do the job, right now. 

Good intentions really are not enough. Good outcomes are what we seek. And that often means designing programs that we can implement fast, at lower cost, with wider impact, immediately or nearly so. “Better” platforms that cost more and are not built are hardly better.

Europe, U.S. Markets On Track for Widespread 100 Mbps by 2024

Since 2010, regulators in the United States and European Union have called for dramatically-faster Internet access, both targeting speeds of 100 Mbps by about 2020, in the case of the EC.

The U.S. Federal Communications Commission’s National Broadband Plan calls for providing at least 100 million U.S. homes with “affordable access” to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second, without setting a specific time frame.

At the time both initiatives were launched, the goals might have seemed farfetched. In 2010, according to Akamai, typical U.S. and European access speeds were about 4 Mbps, though some studies showed higher speeds.

That we now have major Internet service providers talking about, and in some cases, building networks capable of supplying gigabit Internet access shows how fast supplier thinking has changed since 2010, and how fast higher speeds are being made available, despite a persistent sense in some quarters that progress is way too slow.

In 2002, most U.S. households did not even have access at 1.5 Mbps. By 2013, according to Akamai, typical U.S. speeds were about 10 Mbps, showing roughly an order of magnitude increase over a decade. By that metric, 100 Mbps should be what a typical user buys by about 2024.

The European Commission’s Connected Continent initiative reports that broadband availability now is 100 percent across the EC region, with consumers having multiple choices of service providers.

Access speed, though, remains an issue. People able to use 4G mobile Internet access also rose to 59 percent, up from 26 percent a year ago.

Fixed network Internet access operating at 30 Mbps or higher is available to 62 percent of the EU population, up from 54 percent  a year ago and just 29 percent in 2010.

Fast broadband is already available to 90 percent of homes or more in Belgium, Denmark, Lithuania, Luxembourg, Malta, the Netherlands and the United Kingdom.

As you would guess, the biggest problems are rural areas, where 18 percent of rural households have access high-speed broadband access.

The current objective is downstream speeds of 30 Mbps for everyone in the EC region and at least 50 percent of European households subscribing to Internet connections above 100 Mbps by 2020.

Those goals were announced in 2010.

Standard fixed broadband now covers 95.5 percent of EC homes, while rural coverage of standard fixed broadband was 83 percent at the end of 2012, to an EC broadband report reporting status up to July 2013.

Connections capable of providing at least 30 Mbps download cover 54 percent of EU homes. Cable has the highest coverage, at 39 percent of homes, followed by  very high speed digital subscriber line at 25 percent and fiber to the home at 12 percent of homes.

What in the United Kingdom is called “superfast” (30 Mbps or faster) access accounts for 20 percent of all fixed broadband lines in the EC, as opposed to 12 percent a year ago. Some 57 percent  of such connections are supplied by cable TV operators.

In fact, new entrants provide 77.5 percent of faster connections.

About two percent of homes buy fixed network service operating at 100 Mbps or faster.

About 15 percent of homes buy service at 30 Mbps or faster.

Though consumer behavior might have suggested there was little demand for 50 Mbps or 100 Mbps Internet access in the past, the primary reason for limited demand was the cost. As gigabit access network pricing has been redefined, to about $70 or $80 a month in the U.S. market, for example, demand is at least as high as for today’s more common 20 Mbps to 40 Mbps services.

How Much Does "Typical" U.S. Home Broadband Actually Cost?

One subtlety when assessing the state of U.S. broadband access is evaluating the real prices people actually pay, compared to posted retail prices. In the U.S. market, for example, perhaps 60  percent of fixed network customers buy internet access as part of a bundle.

That, in turn, means it is not possible to know precisely how much the broadband component costs, as two or more services are offered for a single monthly price.

It might be easier to track actual prices for internet access if more customers buy stand-alone internet access. In the first quarter of 2021, the percentage of U.S. broadband households with stand-alone broadband service increased to 41 percent.

These consumers pay $64 per month on average for stand-alone broadband service, up from $39 per broadband household in 2011, a 64 percent growth rate over a decade. In part, that is because customers are buying service operating at faster rates. 

In the fourth quarter of 2011, the average U.S. fixed network speed was less than 5 Mbps, as hard as that might be to believe. 

source: Statista 

About 9.6 percent of U.S. home broadband accounts now buy service at 1 Gbps, says Openvault. That is important because, historically, successful consumer products hit an adoption inflection point at about 10 percent adoption rates. In the colloquial, what happens is that “you buy because your neighbor has it.”

source: Openvault 

More significantly, about half of customers buy service operating at rates from 100 Mbps to 200 Mbps. Roughly a third of U.S. home broadband accounts offer speeds above 200 Mbps. We can safely predict that average speeds will continue to increase. Since average speed increased by two orders of magnitude from 2011 to 2021, we can assume roughly the same increase by 2031.

That suggests the typical home broadband service will operate somewhere between 1 Gbps and 10 Gbps in a decade.

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.