Commentary

Problems You Want To Have

Although some insist that the telecommunications monopoly era is either re-formingââ?¬â??or never endedââ?¬â??a much more realistic take on the market comes in a short post by Steve Taylor and Jim Metzler, two technology analysts who contribute to Network World, in and item titled “Cable vs. DSL vs. dial-up vs. cellular – which to lose?” Although Taylor and Metzler’s comments address small office/home office markets (hence the call for redundancy) it’s notable that they believe that the latest question facing users is not which type of broadband access to buy, but which to drop. It’s not a question that can be posed in a monopoly market, which by definition has only one provider and no alternatives.

For the past several years, both Steve and Jim have been working in an environment where they felt like some form of backup for network access is mandatory. And, since customers can purchase both DSL and cable modem basic access for roughly the price of an ISDN line, it made all the sense in the world to simply use both. And if one fails you can switch the router (or switch) to the other service. However, as noted in the last newsletter, both services have become much more reliable and both services also have increased in speed (and, to a certain extent, price). So Steve found himself with three ISPs – DSL, cable modem, and a dial-up service – plus the possible need for a fourth, a cellular data service. So the question was how to decide what to do away with. Here are the results: 1) Getting rid of the dial service was a no-brainer if the cellular service would be available. 2) Cable vs. DSL was a tough call. Both work well. DSL won simply because it was a roughly equivalent price, and, for whatever reason, the performance seemed non-scientifically to be a bit better at the very high speeds. (Subsequent investigation has shown that perhaps a new modem was needed for the higher cable speeds.) 3) The cellular modem performed well, with throughput equivalent to a “lite” service from either ââ?¬â?? which was what was already in place for a backup. 4) The cellular backup could be used in a mobile environment as well as the primary fixed environment. 5) Even though this has not yet been an issue for Steve or Jim due to their good fortune, the cellular service is not dependent on physical lines or on line-power, making it usable in the event of a power outage (for as long as the notebook can stay charged.) Of course, the cellular modem is not without its drawbacks. The most significant ones for the moment are that Steve’s current carrier of choice has a maximum monthly data throughput of 5GB, with traffic counted in both directions (transmit and receive). Consequently, it is primarily a backup and mobile option. Nevertheless, with the increasing number of corporate workers who need always-on broadband connection from anywhere, including home, this provides a great option.

I’m particularly struck by the first point, which all but implies the obsolescence of narrowband wireline dial tone. That some homes and businesses sit in dead zones — isolated pockets of no service, is due more to the efforts of some communities to block wireless antenna placement than a lack of willingness on the part of service providers to expand coverage. If not for that, the authors say, wireline dial tone would be a white elephant. Last week I wrote that few missed wireline dial up service after Hurricane Ike blew through Houston, because cell towers were back up pretty quickly. This is what makes calls for ongoing subsidies of wireline dial tone so questionable, since the service is so expensive to build yet so limited in utility. Overall, however, Taylor and Metzger provide a compact summary of the relative value of various broadband options. There is choice. No one “controls” the market.

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.