Depending on whom you ask, you’ll get a much different answer to this question: If Japan can have 160 megabits-per-second over cable for $60 per month, why can’t we have that in the US?
Currently, the best one can do in the States is 50 Mbps for $140.
One technical answer to that question is distance. People are way more spread out in the US, in houses more than apartments, whereas the Japanese are 125 million people crammed on top of one another around the rim of an island the size of California. So it almost makes sense it costs just $20 per home to set up speeds like that.
Verizon’s chucking over $1,500 per home, which is really interesting considering how the company has argued in the past there’s no incentive to invest in the network.
Michael T. Fries
But that’s beside the point. Why so slow to upgrade? Michael T. Fries, CEO of Liberty Global, the company providing Japan with 160 Mbps for $60, suggests American cable companies especially have found themselves between a rock and a hard place.
Though they need to compete with phone companies offering ever higher speeds over fiber (the phone companies operating on their own build-out strategy of gradual upgrades, pricing schemes, and planned obsolescence), and though their networks may be capable of trouncing their phone company competition, they’re worried about falling broadband prices and losing cable TV subscribers.
From the New York Times’ conversation with Fries:
Other cable operators, he said, are concerned that not only will prices fall, but that the super-fast service will encourage customers to watch video on the Web and drop their cable service.
The industry is worried that by offering 100 Mbps, they are opening Pandora’s box, he said. Everyone will be able to get video on the Internet, and then competition will bring the price for the broadband down from $80 to $60 to $40.
As a result, the US will fall farther and farther behind in broadband and opportunities for innovation and competition speeds like that could provide are delayed until the providers-that-be decide it’s profitable enough for the public to have it.
