Friday, May 24, 2013

You're My Density

When George McFly uttered the words, "you're my density" in Back to the Future, it wasn't what he meant to say, in fact it had nothing to do with the conversation.  When it comes to broadband access and pricing, however, it should be a big part of the conversation because density IS destiny when it comes to access and pricing.  Population density is a crucial fact that is sidestepped by the would-be muckrakers who are concerned about monopolies and "lack of investment" in the broadband space.  

David Carr of the New York Times is the latest offender in his article titled Telecom's Big Players Hold Back the Future.  In the article, Mr. Carr sites Susan Crawford, a professor at the Benjamin N. Cardozo School of Law in New York.  Ms. Crawford recently wrote a book titled, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age”.  I'm not attempting to review her book, just the fact that she and Mr. Carr conveniently sidestep the issue of population density.  

Notice that anyone who argues the U.S. is falling behind in broadband access, speed and pricing likes to point to countries such as Japan, the Netherlands, and especially Korea.  What do these countries have in common?  Their populations are incredibly dense!  

Korea is the most often sited comparison to the U.S. because if it's ranking as #1 in broadband penetration. Population density (people per square mile) i1300 where in the US it's 89.  This means Korea is 15x more densely populated than the U.S.  What really drives the numbers is the city of Seoul which accounts for 20% of the country's population and a population density of...drumroll please.....44,000 per square mile.  In the U.S. we have cities like Dallas, Phoenix, and Los Angeles where we build out and cover large masses of land.  We don't build large residential towers the way they do in Seoul.  

Lack of density means our networks have to cover more distance, we have to dig up more streets and hang more fiber from poles.  When we terminate fiber to a home we may serve a single family whereas terminating fiber to a building in Korea using the same fiber strand and similar equipment and labor to the American home the result is several hundred potential customers.  Can anyone not see why it's more expensive to build and maintain network in the United States?  Ever traveled to the western US where there's even more distance between cities and homes?   

Pundit's are welcome to wag their finger at large telecom and cable companies but in finding support for their arguments they shouldn't site countries with population densities like Korea.  It makes them sound, well....dense.

1 comment:

  1. we have spent trillions on network that is inferior due to short term thinking. there was even a rate hike to the Ilec in tje 90s to pay for a ds3 to every home. read her book or om malik or new networks.