COMMENTARY | You know what Americans hate? Innovation. They hate it with a passion. All Americans wish they lived in 1700 and were still fending off disease with leaches and prayer.
Okay, so maybe that isn’t quite true, but, to hear Comcast CEO Irene Esteves and their cohorts talk about innovation, you would think that was the case. The cable company CEO this week declared that most American consumers don’t want or need 1Gbps Internet services such as those offered by Google Fiber and the Vermont Telephone Company.
Esteves’ sentiment was echoed by National Cable Telecommunications Association CEO Michael Powell, who called gigabit connectivity “an irrelevant exercise in bragging rights.”
That sentiment was mirrored by executive Vice President David L. Cohen who said that offering gigabit speeds would be pointless because “most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available to the home.”
Cohen conveniently forgets to note that Google Fiber providers router technology that delivers on the new technology. He also fails to note that one connection may not use higher speeds, but multiple WiFi and ethernet connections can eat through current data rates rather quickly.
Cohen believes 1Gbps internet service should emerge when real demand for the service is available. Cohen says, when a market is created for the higher speeds, then and only then will “a competitive marketplace of wired and wireless broadband providers will be ready to serve it.”
Of course, a market won’t exist for a new technology until that technology is available to the market.
Comcast’s real translation: We don’t want to invest in new technology until we don’t have a choice.
Could you imagine if Benjamin Franklin and Nikola Tesla simply said “this market doesn’t exist so let’s just wait for it to exist.”
AN INCREASING NUMBER OF DEVICES IN THE HOME
Comcast completely misses the point. This isn’t about a single device streaming Netflix to a TV. It’s about a society that is developing a hunger for technology. Hell, I can buy a toaster with Google Android attached to a WiFi network, and that’s just one more device connected to my network and using up valuable broadband data.
I live in a “zero TV” household which no longer relies on cable or satellite TV providers, and, at any given time, Netflix, Hulu, Amazon Instant Video, and other services can be streaming simultaneously. Those platforms are often streaming alongside two to three computer connections, my wife’s iPhone WiFi, and my Samsung Galaxy S3 connection, among other devices. A 15GB connection often means shared use pushes each device to just 3-4mbps.
As more Americans move towards connecting their lives in a more complete technology manner, the need for faster shared speeds continues to increase.
I already have friends paying Comcast and other providers hundreds of additional dollars per year because of data overages on their “high speed” data plans. In fact, a large majority of my friends are consuming more data than their plans allow.
AMERICAN CONSUMERS HATE THEIR ISPs
In the meantime, American consumers outright HATE the ISP services they receive from Comcast, Time Warner, and various other internet providers. The annual American Customer Satisfaction Index survey ranked Comcast with a score of 62 out of 100. Customers not surprisingly were unhappy with the internet plans offered by Comcast and the lack of high quality online streaming video from the service. It should be noted that it wasn’t Netflix or Hulu serving low quality feeds as other ISP’s ranked higher for video streaming quality, including Google Fiber.
FASTER INTERNET SPEEDS LOWERS THE COST FOR CONSUMERS
In the meantime, the average North Korean household has internet speeds 200 times faster that of the average American.
American’s also pay more for their slower internet and are met with more outages and customer service complaints of other sorts. Innovation lowers the cost of entry for slower speeds and that means American can move from 70 percent adoption rate for broadband internet to something closer to South Korea’s 94 percent adoption rate.
As faster internet speeds continue to breach the market, the cost of lower speeds will decrease. Just look at CPU costs over the last two decades. It use to be that any new processor from Intel would cost a small fortune, now new processors are quickly replaced with newer processors and costs are kept in check. Computers for $200? Sure no problem! A $25 smartphone? You can grab those too!
In the end, an increase in technology means better options for all levels of consumer wants and needs.
In the end, Comcast has fallen behind its competitors and the company doesn’t want to invest in building a competitive infrastructure. Perhaps that’s for the best, even the company’s older technology is prone to outages and other issues that often leave customers ranking the company with a failing grade. Could you imagine the problems that might exist if Comcast was to quickly roll out a competitive product with Google Fiber type pricing?