The cost of 'free' broadband

open2.net

The recent launch of a number of ‘free’ broadband services may prompt questions like “is this really free?” and “what’s the catch?”. Closer examination will yield a set of more thought-provoking questions, “what’s broadband?”, “is this broad enough?”, as well as “what’s next?”.

"free broadband is conditional on you buying other services"

By mid 2006 a number of providers such as Sky and TalkTalk were promising domestic customers high speed internet access, packaged along with something else, such as tethered phones for national and international telephone calls (TalkTalk), or digital television (Sky). The broadband element of the package is said to be free, but the ’free’ broadband is conditional on you buying the other services too.

In essence these companies are offering a package which cable companies like ntl:Telewest have been able to offer cable TV subscribers for many years. Their package features the so-called triple play of broadband, TV and telephone.

What’s the catch?
These offers are undoubtedly better value for people who do not have access to cable and have been paying separately for a telephone line, landline telephone calls, and broadband internet access. They will also look attractive to those considering broadband internet who’ve previously been paying for much slower dial up internet access.

However, there is a lot of small print to consider. First, none of these packages are available to everyone. Only about five million homes have cable TV at present and the technology of the other packages relies on you living close to a telephone exchange to which your supplier has access.

You can learn more about broadband in what is broadband? But there are two further complications you need to consider:

* your broadband provider will be sharing your data stream with up to 50 other users
* the connection is asynchronous: inbound and outgoing data rates provided by the service are different – with much higher speeds available for receiving than for sending data

If you often post your holiday snaps on Flickr, or you provide a web server for your local community group and especially if you run an online business from home, the uploading speeds may seem slow. And should you and the others that share your data stream all start uploading files at the same time, you’ll probably feel nostalgic for the speeds that you used to get out of your old-fashioned modem.

What’s next?
There are ways of reaching households that aren’t near a telephone exchange and of avoiding the limitations of the copper wires of the telephone system. For example, wireless technology which avoids the expense of digging up the road to provide the optical fibre that is used for the network backbone.

The technologies of video and interactivity (broadcast and broadband) are converging quickly. Indeed it is worth remembering that the 16m+ households with digital TV through cable, satellite and Freeview are already receiving very high bandwidth content.

Meanwhile, BT, which now receives only a small proportion of its revenue from telephone calls, is set to become a provider of TV content. It launches internet protocol based IPTV in 2006 and along with Korean company Samsung plans trials later this year of high quality video broadcasts to mobile TV-phones.

"the future can be seen in Korea"

For many the future can be seen in Korea where 80% of households have very high speed connections, primarily by optical fibre. In Korea a combination of competition and government loans have lead to new and thriving technical and entertainment industries.

Those who advocate the undoubtedly greater expense of providing new infrastructure (in Korea’s case optical fibre) point to new forms of entertainment and hence revenue streams. These, alongside the industrial strength that results from being close to the leading edge, have served Korea well.

Article first published August 2006.