Comment: The bandwidth bandwagon

By Paul Trotter

Posted on 25 Nov 2005 at 11:45

Super-fast broadband speeds have never been so boring. Contrary to the digital divide that threatened to keep much of Britain in the slow lane five years ago, 99 per cent of the nation can now access the high-speed Internet from home. The only question being, can people in your area download quickly or very quickly?

Whereas having broadband access automatically meant 512Kb/sec a few years back, now it's a question of anything up to 8Mb/sec for large areas of the population, with the likes of BT and Wanadoo offering such services at very attractive prices. Next year, cable broadband speeds will reach 10Mb/sec across the board, while those driving ADSL2+ hope to complete successful trials of 24Mb/sec in the near future. The long-term goal is to get 100Mb/sec speeds to everyone in the country.

Such promises should be taken with a pinch of salt. Theoretical maximum throughputs - quoted in press releases and marketing brochures - are rarely achieved by customers. Wanadoo said the big push for 24Mb/sec ADSL2+ broadband would really only mean 8Mb/sec for people who didn't live right next to their 'local' exchange.

Nevertheless, those headline figures would have sounded exciting to the broadband hopefuls of 2001. Today, however, customers are rightfully becoming numb to such claims - an ISP seems to break the broadband speed limit every month. Of course, there's a certain type of person for which the snob value of a 4Mb/sec broadband connection is worth the extra money.

But the rest of us would rather save the pennies. Who needs anything more than a 1Mb/sec connection for browsing the Web and downloading the odd attachment?

At the moment, the answer is only a small minority of people. But we'll soon be demanding much more from our ISPs. The Internet is dramatically changing the way we interact with media in the home. IPTV - where TV signals are streamed across the Net to provide more interactive broadcast content to home users - is being touted as the future of the living room, while a number of other Internet applications have already reached the mainstream. Online music stores, VoIP and online games are just a small number of the web-based apps that have moved from geek to chic over the past two years. None of them is necessarily an enormous bandwidth hog when used in isolation, but in five years' time families are likely to have numerous people connecting concurrently.

It's no wonder the UK's biggest telecoms companies have been scrambling to get a bigger slice of the market over the last few months. ntl and Telewest finally merged, creating a cable broadband monster that's been in the making for years, while Pipex bought rival ISP Freedom2Surf to create a powerful ADSL provider to compete with BT.

Then Sky announced the acquisition of ADSL broadband provider Easynet. Finally, and as if evidence of a telecoms turf war were needed, traditional telecoms firms have announced plans to move into Sky's realm.

BT's TV services could be with us as early as next year, while ISP Wanadoo has revealed plans to offer video services over the Net in 2006. The company already offers such a service in France, where tough regulations on the placement of satellite dishes have aided uptake in Paris.

Such a flurry of investment has had some analysts predicting a second dotcom crash, five years after the first one put an end to the dreams of countless paper millionaires. The difference this time is that the so-called triple-play package these companies plan to deliver - Internet, VoIP and video-on-demand - caters for current demand. Customers are already paying for these services, whereas in 1999 dotcom chief executives wowed investors with PowerPoint presentations that laid out plans for the 'customer of tomorrow'.