In January 1999, I wrote Parts 1 and 2 of "The Great Broadband Network Hoax". In those stories, I alleged that the hype over high speed Internet access was excessive. The reality, I said, was that high-speed residential Internet access for most residents would be many years away still.

In January 2000, I revisited the topic to see where things stand today, one year later.

ADSL as of January 2000
As of the end of 1999 in the U.S., there are instead an estimated 300,000 lines installed. An estimated 900,000 will have been installed by the end of 2000. In late 1998 and early 1999, the media hype over broadband access was off scale - you would think that everyone would have high speed access by the end of 1999. But the reality has been far more subdued.

There are about 103 million occupied homes in the U.S. About 80% or 240,000 of the ADSL lines are deployed to homes, with the rest going to businesses.  That means about 0.23% of homes now have ADSL. Or, 99.77% of homes do not have ADSL. Looking to the end of 2000, with an estimated 900,000 lines in place, that still means more than 99% of homes will not have ADSL service. More interesting, I think, is that as of the end of the calendar year 2000, the Yankee Group estimates that just 24% of lines will be capable of ADSL! (see http://www.zdnet.com/zdnn/stories/news/0,4586,2429937,00.html?chkpt=zdnnstop). That means that 2 years after I wrote the first Great Broadband Network Hoax article, 3 out of 4 homes still won't be able to get ADSL access.

Cable Modems
Cable modems are deploying much more rapidly than ADSL services. There are now an estimated 1.2 Million cable modems installed at the end of 1999, which works out to just over 1% of U.S. homes. 

Why Is Broadband Access Important?
In the 19th century, continuing into the 20th century, fortunes were made or lost based upon where the railroads were constructed. When the railroad bypassed your community, business went elsewhere and the economy suffered. Beginning in the 1950s, as the interstate highway system was constructed, cities prospered or nearly died depending on where the freeways were built. Towns that once had traffic travel down Main Street, were now bypassed by the new freeways. Business from travelers disappeared and many small towns have dwindled ever since.

As we enter the 21st century, the railroad and the freeway are replaced by the telecommunication system. You may have noticed that investment money is pouring into Internet and other electronic-based businesses. Economies will be made, or broken, by the deployment - or lack of deployment - of the new telecommunications infrastructure. Either your town gets wired, or it does not. If it does not, your economy will whither and permanently lag behind everyone else.

Unfortunately, residential telecommunications services are provided in the U.S., by businesses that have operated under a government grant of monopoly. This grant of monopoly frees them from normal competitive market forces. Under the old view, government bureaucrats thought that certain kinds of businesses were "natural monopolies".

Spokane, Washington Market
Spokane, Washington is the second largest market in the State of Washington, outside of the Seattle area. You'd think this area would have modern communications facilities. I do a lot of work from a home office. My correspondents exist in a world of high speed communications. I don't. They send me many megabytes worth of electronic data every day. I have to send a similar amount back out each day. Unfortunately, due to the lack of infrastructure here, I and many others are hindered in our ability to effectively compete in the modern era. I point this out so that you can understand how the lack of infrastructure will shape the areas that will be economically successful and those that will stagnate. Those of us who depend on this infrastructure are forced to locate our businesses elsewhere. Because of the lower cost way that US West wired our neighborhood (through a Subscriber Loop Concentrator), the fastest modem connections are just 26.4 kbps. And this is a metropolitan area, not one of the unserved rural communities we hear a lot about. If metro areas cannot get service, the smaller communities are faced with a hopeless situation.

In January 1999, I contacted  U.S. West and asked about ISDN and ADSL. The central office switch serving our neighborhood is equipped with both services. But US West refused to install ISDN saying that they simply could not do so. However, an employee of my internet service provider lives just blocks away and has ISDN. He notes that they told him the same thing for many months before eventually agreeing to install ISDN to his home. As to ADSL services, which were heavily promoted in the area, US West said to call back in January 2000 as they should have a better idea of deployment then.

As of January 2000, US West now says:

• it has no estimate on when ADSL service will really be available - as compared to being hyped by their advertising that seems geared more towards making regulators think US West is investing in Washington,
• U S West now tells us that they cannot even estimate if they will ever provide service to our community.
• It gets worse - US West also says that in case, say, I wanted to move to a new house to support my work better, they can not tell me if the new location would have ADSL services, that they have absolutely no way of knowing where ADSL is deployed and where it is not deployed. In other words, you can not make plans or decisions about running a modern business in US West territory.

Back to ISDN
I called US West three times in January, July and November of 1999 and each time I asked about ISDN.  Each time I was told that ISDN was not available and could not be installed. In January 2000, I spoke with my Internet Service Provider who again stated that ISDN should be available but that US West probably just did not want to install it. So in February 200, I called again and much to my surprise, US West now tells me that ISDN is available - and was unable to explain why it was not available last year. Pretty strange!

It should come as no surprise that the State of Washington is opposing the merger of US West and Qwest Communications on grounds that US West has a poor service record and is signficantly underinvesting in Washington's telecommunications infrastructure.

Cable Modems
Cable modems? In January 1999, AT&T Cable says that cable modems, which are being advertised then, may be available in 6 to 12 months. When I called them back in January 2000, AT&T Cable now says it is likely to be another 18 months! That puts the forecast for service into the second half of 2001!

An article in the Seattle Times in late 1999 said that AT&T Cable was hooking up just 90 customers per day in the Seattle market. At the rate of less than 500 homes per week, in a market of a few hundred thousand homes, you can do the math and see that it will be many years before half of subscribers have cable modem access.

The hype over residential broadband access remains years ahead of reality. For most of us, it will still be another 2 to 4 years. 

The countdown to fast access continues...