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Peter Cochrane's Uncommon Sense: Superhighway? What Superhighway?
Why have we lost the impetus while certain countries have forged ahead?

During the dot-com boom of the 1990s and up to 2001 the word on the street was that by now we would be enjoying the information superhighway. This was to be a single, high-speed pipe connecting every office, hospital, school and home. As I recall it was a certain US Vice President (Al Gore) who coined and supported the vision of the superhighway that would provide radio, TV, telephone, internet and just everything, past, present and future that entailed a digital network.

So where is it? Where is that high-speed optical fibre to every home and office? The answer seems to be: in South Korea and Japan, where 10Mbps is seen as pedestrian, 45Mbps the norm and 100Mbps the minimum future expectation - and all at a price of just $37 a month. And we're not talking about 20-40 per cent of the population with the facility - we're looking at 80 per cent penetration.

In the case of South Korea the data rate supplied has to be precisely what is on the box. There is no latitude for the watering down of the 10Mbps, 45Mbps or 100Mbps provision by the sharing of that bandwidth with other customers. The companies providing broadband service have to do what they say and provide full broadband connectivity.

So here we have two countries that started from the back of the pack, providing their citizens with a vision that none of us are currently able to share or access in the West. While they are able to communicate everything on a single pipe, we find ourselves limping along with bit rates as low as 250Kbps (that's 40 times slower) purporting to be broadband.

How come we are so far behind when we were the first off the starting block with the technology and the vision?

It would seem a case of market forces unable to do the job. Whereas the Japanese and South Korean governments stepped into the frame with the vision, plan and supporting legislation, Western governments did not. To be blunt, the Western governments have fumbled it.

Leaving it all to the market has seen virtually no progress by the incumbent network providers in terms of providing anything remotely close to the information superhighway. For most people 500Kbps or 1Mbps, possibly 2Mbps and certainly no higher than 6Mbps seems to be it and with that you have to be inside the envelope of the lucky 40 per cent of a given population. Worse, bandwidth in the West is generally shared between many customers and it is not unusual to see actual delivery rates as low as 56Kbps during peak usage times.

But in the disruptive technology wings we have the rapid spread of Wi-Fi, soon to be augmented by WiMAX, now seen as the great white hope. However, we shouldn't confuse WiMAX with Wi-Fi. The Wi (for wireless) is as close as they get in their relationship.

Wi-Fi was designed for local area network applications with a limited range of about 100m. WiMAX, on the other hand, is a point-to-multipoint service provision technology that does not share the same signalling or protocol. Its reach can be in excess of 45km with fastest transmission rates up to 70Mbps in the 2-11Ghz range.

This is a much required technology partnership needed to overcome the logjam of ancient copper cables and horded optical fibre capacity that none of us can access. With luck the first consumer units will be in our stores very soon and will circumvent market forces. We might therefore anticipate a future where private individuals and not companies provide the majority of networks.

Once a technology is usable, affordable and available people tend to just buy and use it. Wi-Fi has already weakened the dam and with WiMAX it will soon be breached. The level of technical expertise required with WiMAX is not great - it is on a par with Wi-Fi. A small tower, the side of a house, a tall building or just a belfry is all that is required to mount a modest antenna and a small amount of electronics to provide a hop - or two - to a broadband provider.

Everywhere I travel in the US I find Wi-Fi in abundance for zero cost or at a very reasonable price - say $9 per day for a 1.5Mbps connection. In stark contrast, Europe has providers charging prohibitive, frankly stupid prices that totally negate a potentially massive market.

At a conference in London last week the broadband supplier to the hotel asked the conference organisers for $450 per day for an all-delegate access deal. For public access the published rate was $9 for the first 15mins and $1 per minute for every minute thereafter. Surprise, surprise no one signed up. However, it wasn't long before delegates discovered free Wi-Fi access just a block away.

Is it an accident, I wonder, just this past week saw the most famous telephone company and system on the planet lose its blue-chip rating? Is it also a coincidence that telephone companies are now seeking to sell their switches and buildings? I think not.

It is always difficult to get precise numbers but there is no doubt about it: voice revenues (telephony) are on the decline and all efforts to regain high profit margins on the back of broadband services seem to have failed. At the same time it is clear that the necessary deals linking content to service provision aren't being made and as a result network providers, music- and movie-makers are all suffering.

In the end there will be no winners - this is a very destructive one-way ticket. Unless, that is, the network operators decide to change their provision and pricing policies to reflect the needs of the users and society. But it means accepting that the old days of double-digit percentage profits year on year have gone - providing bit transport is now a commoditised activity along with the provision of food.

In the meantime South Korea and Japan continue to forge ahead in creating a facility for education, healthcare and commerce that looks set to give them a significant market edge for the next few decades.

First draft compiled on AA174 flying Raleigh-Durham to London. Revised a week later on the London to Ipswich train and despatched to silicon.com from my home Wi-Fi network.