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Fast Internet for individuals and businesses?

By: Scott Bradner

On August 29th the Washington Post ran an article on "Japan's Warp-Speed Ride to Internet Future. (http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801990.html) The article painted a quite impressive picture of the current and future state of residential Internet service in Japan while not saying much good about what has been happening in the U.S. I expect that the pictures the article paints of high-speed Internet service for both Japan and the U.S. are a bit over rosy when it comes to what is actually going on for homes and significantly over rosy when it comes to business Internet options.

The core observation of the article is that competition enabled by government regulation has produced an environment where many people can get Internet services at far higher speeds than are available in the U.S. at a far lower cost. Non-fiber based broadband services tend to be 5 to 10 times faster than what the U.S. homeowner can expect and fiber-based services are 3 or more times faster. The article attributes the availability of these services to the fact that government regulators forged the local telephone company to unbundle the copper phone lines and offer anyone the opportunity to rent the copper wires into a home for about $2 a month. Congress in the US wanted to force the same type of unbundling but the FCC and the courts removed most of the regulations.

The distance between homes and telephone central offices in Japan is generally less than in the US and the speed of DSL services depends, to some degree, on the distance. The $2 per month fee for the connectivity enabled competitors to offer cheap ($22/mo) Internet service at a significantly higher data rate than in the US.

Verizon is offering the FIOS fiber-based service in some parts of its territory (http://www22.verizon.com/content/consumerfios/) but the highest speed service it offers is less than 1/3 the 100 Mbps service that NTT now offers in Japan.

The Post article did not talk about the specific features of the Internet services being offered in Japan but my guess is that they are the same as the telephone company (and cable company) residential services in the US -- they only offer half the Internet. You can download and upload at your whim but you cannot participate in offering Internet content. For example, the Verizon terms of service for subscribers of their broadband Internet service (which include both DSL & FIOS) (http://www.verizon.net/policies/popups/tos_popup.asp) cannot be used to "host any type of server whether personal or commercial in nature." So a subscriber cannot run a web server, email server or any other service that would make the subscriber a full member of the Internet community.

The lack of an ability to host servers is not all that big a deal for most current Internet users but can be critical for business users. For a lot more money, subscribers to Verizon's "Business DSL" service are permitted to host at least some types of servers. (http://www22.verizon.com/content/businessdsl/faqs/faqs.htm) Verizon's terms of service for Business FIOS (http://biz.verizon.net/policies/tos_policy.asp?version=fiber) does not clearly say that servers can be hosted but I would hope that they could be. Verizon has some very silly rules about mixing "business" and "non-business" services (http://www.complaintsboard.com/complaints/verizon-fios-internet-digital-tv-c2476.html) so it might be hard to get what you want for a home-based business.

But the biggest problem is that FIOS is unavailable in almost all of the country and the actual speed of DSL in most places is very slow, especially if you host servers. Maybe someday we in the US will get reasonable cost high-speed Internet options but it may be a while.

disclaimers: Despite the common impression, Harvard can be a reasonable cost option (http://www.hno.harvard.edu/gazette/daily/2006/03/30-finaid.html) but the University has not provided an opinion on the reasonableness of Internet services so I did instead in my own name.