This post by Steve Blum vividly presents the point that wireless (Satellite and Mobile) is not a true alternative to wired broadband service.
Steve draws on the data provided to the FCC on broadband services which, for the first time, included ViaSat’s satellite delivered internet service.
The good news is that ViaSat’s new satellite provides relatively high download speeds – and the rates actually exceed their advertised figures.
The bad news is that ViaSat charges by the GB of download (in step-wise bundles) which makes the use of their service for bandwidth hungry (think video streaming) applications prohibitively expensive.
This chart shows the dramatic difference in the actual usage of satellite subscribers versus Fiber, Cable and DSL
The same issue applies to cellular mobile services that sell by the GB and it is a concept that is often omitted when there is discussion of ubiquitous mobile broadband. The data rates are increasing (which is good), but if the service is priced by the byte, usage will be constrained and many valuable applications will never see the light of day.
A little of the math based on the ViaSat offering. ViaSat/s “Exede” service is 12 Mbps down and 3 Mbps up. They charge a $150 initial setup and $10/mo equipment rental. The packages are $50/mo for 10 GB (combined up and down bandwidth), $ 80 for 15 GB and $130 for 25 GB. You can by additional GBs at $10 per GB.
The “median” Cable broadband customer consumes 35 GB per month (fiber is higher). To get that amount of service on ViaSat would cost $230 per month. The 80th percentile Cable user consumes about 100 GB which would cost $980 per month on ViaSat!!! So much for affordable broadband.
Of course, ViaSat’s prices are cheap relative to cellular data. AT&T for example charges $10 per month for each connected device PLUS the following GB packages: 1GB at $40/mo, 4 GB = $70, 6 GB = $90, 10 GB – $120, 15 GB = $160 and 20 GB = $200 with additions GBs charged at $15/GB. The “average” cable user would have to pay AT&T Wireless $350/month (plus the device charges) for there 35 GB service while the 80th percentile cable user would have to pay $1,325 per month!!!
Very interested in disrupting these inhibitors to broadband access, which seem to be getting worse, and the consumer getting boxed in ever tighter. We’ve become accustomed to tech transformations disrupting business model for status quo…we are perhaps spoiled to think the “powers that be” won’t get the whip hand back.
I vote for Gary figuring this out for us, and we’ll support whatever he comes up with. =^)
Actually, it’s not a barrel of laughs with present trends as you point out.