The Bandwidth Buildout

WHY IS THIS IMPORTANT? The ability to transfer large amounts of data is largely determined by bandwidth, the carrying capacity of the connections, or the "size of the pipes," between the sender and receiver of the data. Greater bandwidth allows faster transmission of larger amounts of data, which in turn will facilitate not only the development of vastly more valuable and compelling online services, but also the convergence of all forms of electronic data transmission, from email and basic text documents, which require relatively little bandwidth, to full-motion, real-time video applications, which will require a great deal of carrying capacity. To determine our progress toward an information infrastructure where such services are feasible, it is important to look at the availability of high-bandwidth ("broadband") services.

THE TREND: () Broadband services have only recently begun to be deployed and they are still relatively expensive. Moreover, most people are still not on the Internet, and there are too few indispensable Internet applications requiring high bandwidth to make broadband services a necessity. These factors help explain why in 1997, while cable companies could claim nearly 10 million U.S. homes "passed" with services allowing high bandwidth Internet access over cable television wires, only somewhere in the neighborhood of 100,000 homes-approximately eight percent-actually subscribed. Similarly, by the end of 1998, some nine million homes are projected to have access to new asymmetric digital subscriber line (ADSL) services, which allow high-speed Internet connections over copper telephone lines, with 68,000 homes projected to subscribe. But by 2005, according to a conservative estimate, over five million homes are projected to subscribe to ADSL services and 14 million homes are expected to subscribe to cable services. Thus, within seven years, close to 20 million households in the United States-approximately 20 percent of all households-will likely have high-speed data capacity. And it's likely the numbers will be even higher. In the near future, most American consumers should have a choice of either cable or ADSL service available to them. Analysts at UBS Global Research project that the Regional Bell Operating Companies will have 22.2 million lines capable of supporting ADSL service by the end of 1998. Prudential Securities has estimated that total consumer subscriptions to high-speed services will reach 25 million in just the next four years.

THE DATA:

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Productivity Paradox | Knowledge Economy
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