We never should discount the power of disruptive changes in the Internet access or any other telecommunications market.
Consider what it might mean if new low earth orbit satellite constellations, use of unmanned aerial vehicles, untethered balloons or expedited infrastructure builds by mobile service providers, plus new sponsored consumption or other measures, are widely adopted across much of South Asia or Southeast Asia.
In the Philippines, just one innovation--allowing mobile users to use Facebook for a time without paying any data charges--allowed mobile Internet access adoption to double in a short period of time.
Such changes in competitive environment can come quite suddenly. Consider Comcast, the U.S. Internet service provider, which now has promised to supply 1-Gbps consumer services across virtually its entire customer base by the end of 2015, with 2-Gbps available to 18 million consumer locations also by the end of 2015.
In most locations, that will mean an immediate potential speed leap from perhaps 105 Mbps or 505 Mbps up to 1,000 Mbps or 2,000 Mbps. That is not to say most customers will upgrade.
The new tiers undoubtedly will cost more, and few consumers are going to notice any actual advantage beyond 10 Mbps per user.
But that is not the point. The salient change is that the leading U.S. high speed access provider has abruptly concluded it must now introduce gigabit speeds to all consumers, and 2 Gbps services for 86 percent of all of its customers, by the end of 2015.
That is not the only sign of rapid changes in the market context for high speed access.
A gigabit Internet access network serving “targeted commercial corridors as well as in residential areas with demonstrated demand is the goal sought by a consortium of 46 Connecticut cities and towns.
In the end, the municipalities are likely to get what they want, either because incumbents step up, to protect their existing businesses, or because new suppliers, able to operate with lower operating costs, enter the markets.
For incumbents, skinnier profit margins are likely, one way or the other. For at least some would-be attackers, it might be possible to gain entry into the Internet access market.
But a fierce response might be coming. In that instance, the municipalities will succeed in their goal of stimulating investment in faster Internet access. Comcast, which operators in Connecticut, already has said it will upgrade virtually all of its networks to gigabit speeds by the end of 2016.
Whether other major Internet service providers will go that far, or not, is not yet clear. But it would be reasonable to suggest upgrades to hundreds of megabits will be forthcoming, especially where the municipalities really want it: commercial corridors and some residential neighborhoods willing to pay more for higher speeds.
Ignore for the moment the fact that, today, speeds available per user beyond 10 Mbps have negligible to zero additional utility. That is a matter of science. “Gigabit” is about marketing, perceived economic advantage for communities or states and perceived advantages for anchor institutions.
A betting person would guess those demands will be rather swiftly met by firms that face clear threats.
That is not to say most consumers will notice an improvement in experience. Beyond 10 Mbps per user, the advantages of faster local access connections is very slight to non-existent. It certainly would be reasonable to argue that even a multi-user household “does not need” bandwidth beyond 105 Mbps to achieve the best possible Internet experience that the local access connection can deliver.
The rest of the user experience is dictated by far-end servers and wide area network, device limitations or app architecture, not the actual end user circuit.
For marketing purposes, none of that matters much. As the Comcast decision indicates, disruptive change can come suddenly in the Internet access business.
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