E-Business Commentary -- Broadband As James Dean

Dec. 21, 2004
This technology without a cause desperately needs one.

If ever there was a technology that was a few light-years before its time, it's broadband. Broadband, in case your eyes glazed over at the mere mention of the word, generally refers to a faster Internet connection. The premise for broadband, sometimes called "next generation Internet," is that consumers need a faster pipe through which to suck all things digital into their homes, from movies to music to interactive video games. Investors and businesses sank billions of dollars in this belief, largely for naught. Vast, expensive networks were built, but relatively few customers ponied up hard cash to use them. The reason? There isn't one. No "killer" application for broadband, that is. It's a technology without a cause. Broadband is the James Dean of high tech, drag-racing over the Information Superhighway without being really understood or appreciated. "What's a broadband?" asks Craig McAllister, managing director and CEO of Local Information Networks Inc., a San Rafael, Calif., firm that helps communities create intranets. "It's not tangible. The technology needs a purpose." But the lack of a strong application doesn't mean broadband is going away. To the contrary. The State of California recently co-sponsored the opening of a Next Generation Internet Application Center at the University of California at Berkeley. "The slow pace of broadband deployment is slowing the growth of the high-tech industry and the growth of the Internet," says Thomas Kalil, special assistant to the chancellor for science and technology at UC-Berkeley. The university, in fact, has a research project on something called the "Access Grid," capable of connecting people from up to 200 locations around the world in a video conference via the Internet. Never mind that the people on the screens move in a herky-jerky fashion and their words are often garbled. The sheer connection is impressive. Broadband can take various forms, such as digital subscriber line, cable modem, wireless broadband, etc. Admittedly, most manufacturers aren't affected by the failure of consumers to embrace broadband, since large companies use more powerful T1 or other network connections to handle greater volumes of data. Broadband's failure to gain wide acceptance among consumers has brought many a large telecom provider to its knees. Some carriers already in bankruptcy court include Global Crossing, Teligent and Winstar. Others, such as Level 3 and Qwest Communications, are struggling. Even the long-term success of some products -- such as Microsoft Corp.'s Xbox game player, which comes with a broadband Ethernet connection instead of a conventional dial-up modem -- rests heavily on broadband's wide acceptance. To quote a recent article in a respected high-tech investment magazine, "Without a surge in broadband subscriptions, the technology industry, and possibly the economy as a whole, has little chance of recovery in 2002." Or, as Milo Medin, former chief technical officer for Excite@Home, and a member of the TechNet Broadband Taskforce, puts it, "We think broadband is critical for American productivity." The taskforce, an industry trade organization, recommends that the U.S. government set a goal of making broadband available to 100 million homes by 2010. The raw truth, though, is that 21st century humans have yet to figure out why they need broadband. "The problem is that people are waiting for the killer application for broadband Internet technology," observes Kathie Hackler, vice president and chief analyst at the Gartner Group. Most broadband vendors lost their fiber-optic shirts because consumers, who already had their hands full with cell phones, PDAs and DVDs, couldn't see the value in it. Plus, the overall cost of the broadband buildout -- running up in the tens, if not hundreds, of billions of dollars -- was just too much for most companies to stomach. I don't doubt that eventually, we'll have broadband, or something similar. Like progress, it's inevitable. Just don't hold your breath. Doug Bartholomew is an IW senior technology editor. He is based in San Francisco.

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