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Broader Band on the Way

March 4, 2010 | Author: Ibex Marketing

Last month, two giants held forth the prospect of faster broadband Internet connections to the home. First, Google announced that it was going to build a trial fiber network designed to deliver 1 Gbps bandwidth to subscribers, about 100 times faster than most broadband services. Then the Financial Times reported that Cisco was also developing a 1 Gbps fiber network, working with existing clients such as AT&T and Comcast.

These are interesting developments. First, some may be concerned that Google may want to get into the ISP business, but I don’t think that’s the case. Google probably doesn’t want to be responsible for any more hardware than it is already (and that includes the massive server farms that the company has already). Instead, I expect that this is primarily a technology demonstration, intended to prod and pull other ISPs to provide higher speed network connections for their customers. Higher speed means more data transmitted, which could translate into more searches and more opportunity for Google to make money.

Cisco’s reported experiment makes more sense as a permanent venture. Cisco sells hardware: lots of hardware. The Internet depends on Cisco equipment for a lot of its operations. So a newer, faster Internet is likely to use Cisco hardware. By helping its major customers move to faster broadband, Cisco can assure some hefty hardware orders in the future.

In either case, I expect that this is good news for consumers, both for business and personal use. Within just the past two weeks, I’ve had a bunch of separate conversations with people who argue that the Internet doesn’t have the capacity for widespread HDTV programming distribution or other data-intensive applications. Increasing capacity 100 fold, however, would make room for a lot of movies. We can reasonably expect the Internet in general to get even better in the coming years.