The Best-Laid Plans
While broadband connections are expected to double by year-end, two-thirds of all Internet users will still not access the Net through a high-speed connection. But citing price and availability as the primary obstacles to broadband adoption, as many studies have done, is like putting the omelet before the chicken or the egg. The driving factors behind high prices and low availability-namely, legislative paranoia, high costs of provider entry, constantly changing technology, unproven consumer demand, the current economic cycle, and lack of broadband-specific content-are issues that take time and courage to overcome. By most estimates, we are still a decade away from true broadband ubiquity. That is, true anywhere-anytime, high-speed Internet access.
With cable and DSL facing a difficult future, and satellite technology unable to gain a serious foothold, wireless is the leading contender to deliver the broadband future to consumers and to pave the way for the all-optical Internet. The fact that wireless service avoids last-mile infrastructure issues makes it the best bet to beat out cable and DSL for the lion's share of the market.
But until the last mile of bandwidth is bridged, we'll continue to see stagnation in broadband development. Next-generation content and services that rely on higher-speed access will have to wait for the market to develop; the same goes for next- generation hardware.
Nevertheless, the real promise of broadband is more than just speed; it is also about distribution and new kinds of content. Content providers have the luxury of sitting back and letting bandwidth come to them. Viacom, Disney, and Time Warner won't be rushing to create serious broadband content until there are enough consumers to justify their investment. The service providers, however, do not have such a luxury.
And so the convergence of voice, video, and data goes hand in hand with the consolidation of the communications industry itself. AOL picked up the second largest cable distribution network in Time Warner. Cisco has been snapping up optical networking firms to the tune of more than $10 billion over the past several years. And although Alcatel and Lucent recently called off merger negotiations that would have led to a $34 billion merger of broadband heavyweights, the M&A activity is just heating up-much more is to come. Even the clichés are converging: Only fools rush in, but he who hesitates is lost. Better safe than sorry, but the early bird gets the worm. The trick now is to be the first mouse and still walk away with the cheese.
Sidebar: An Optical Fiber Runs Through It
Following the R&D expenditures and the M&A activity is always a good way to track the next big thing. In this case, peering into the research labs at the likes of CIENA, Cisco, and Nortel, one will find major developments taking place in the field of microphotonics-a technology that could dramatically increase the speed at which information travels across broadband backbones. With the development of optical switches-which route information in the form of light rather than converting data to electrons-and the constantly expanding capability of optical networks to carry more and more information on a single fiber, all signs point toward the evolution of an all-optical Internet.
As fiber-optic switches replace slower, more expensive electronic switches within the fiber-optic backbones, voice, video, and data will truly converge, delivering data at speeds unheard of today. Nevertheless, many of the current roadblocks to full-scale broadband deployment remain.