Bad Reasoning: We Don't Need More High Speed Internet Because People Don't Use Fast Internet Now

from the the-point-is-way-over-yonder dept

There’s been a lot of discussion lately about how far the US has fallen behind other countries when it comes to high speed broadband. And many are taking it for granted that high speed broadband is important to economic growth and viability. Yet Tim Worstall, over at Forbes, argues that “High Speed Broadband Doesn’t Matter A Darn” because a UK study showed that people don’t use super high speeds. He quotes a report (pdf) from Booz & Co.


But speed in itself is not enough to encourage usage. Ofcom (an independent regulatory authority for U.K.
communications industries) has noted that in 2011 superfast coverage of the U.K. was at 60 percent, but only 6.6
percent of all connections were taking advantage of the top speeds. This suggests that focusing on availability is
no guarantee of deriving full benefit from the investment.

Worstall then uses this to argue that speed isn’t an issue and we shouldn’t invest in faster broadband:


As should be obvious, it’s not the speed of the internet that produces the economic growth. It’s the people using the internet that does. And if only 6.6% of the traffic is using the speeds we already have then there really isn’t much of a case for throwing billions at making it all faster. So that, presumably, only 6.6% of the traffic will use that higher speed.

In fact, given the low numbers even bothering to use current speeds I’d say this is a very good argument for not spending a lot of money to roll out high speed broadband everywhere. The most important reason quite possibly being that I rather doubt that broadband is going to be the technology of choice for much longer.

This reasoning is faulty on many, many levels. First off, if you look at the full Booz report, almost every conclusion is exactly the opposite of what Worstall suggests. He seems to take that one paragraph out of context, and assume that because only a small percentage of people were taking advantage of “top speeds” it means that there’s no real demand for it and no economic benefit.

That’s making a big assumption. He’s right that “it’s not the speed of the internet that produces the economic growth,” and that it’s the people, but he ignores that part of what brings in those people are the services online — and new, better and more useful services are quite frequently enabled by higher speeds. It’s almost hard to imagine how much more can be done online as speeds pick up. A decade ago, the idea of so much video online was crazy. And yet, here we are.

Second, the fact that only a small percentage of people are using full broadband capabilities is meaningless. That’s a snapshot, not a look at the trend. What happens is that as more services offer up useful features that increase the number of things you can do with broadband, more people will use it. The last thing you want to do is get caught waiting — and then suddenly have all your users pissed off that the broadband can’t handle the latest and greatest applications and use cases.

Faster broadband doesn’t immediately get soaked up, but it does lead to greater investment in bandwidth-intensive services, and that will increase usage and expand the economy. Taking one quote out of context and then looking at a snapshot rather than a trend is not a particularly compelling reason to pull out on key infrastructure investment at a time when it’s needed most.

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Comments on “Bad Reasoning: We Don't Need More High Speed Internet Because People Don't Use Fast Internet Now”

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70 Comments
Machin Shinsays:

Re:

I hate to burst your bubble but streaming a single 1080p video is not necessarily using “top speed”. I know this as I sit at home quite often and steam a movie while other people in the house are streaming a different movie, then on top of that I will be in an online game AND downloading something else. This is on a connection that is only rated for max of 10meg.

So 2 HD videos and a online game will not max out a rather weak “high speed” and he is talking about much faster connection.

Now having said that, I think this guy is a moron for trying to say we shouldn’t put money into high speed. The faster the internet becomes the more useful it becomes. As the story pointed out, streaming video used to be just crazy. In fact, it was not that long ago sending a picture was considered a massive waste of bandwidth. Now days we do not even think twice about the load time of an image.

Re: Re:

You do realize that those “HD” video streams are highly compressed compared to the same video on a disc. To stream a 1080p video in Blu-ray quality would require bandwith in the order of 40Mbs just for the video (would be higher if you wanted multi-channel audio), and the video of a 480i DVD would require 8Mbs to stream. Most HD streams don’t go above 10Mbs in bandwidth which is only about half of the bandwidth used for OTA ATSC 1080p video, and HD cable/satellite only uses about 16mbs.

So. Yes–even if we don’t need it right now–we will need higher bandwidth to the home to get the next generation video streaming services off the ground. This is why Google is starting to roll out their 1Gbs fiber Internet, they have realized that you’re going to need a giant pipe into the home to get these services off the ground, and those services are where the profits are going to be in the future–not in providing the pipe.

That One Guysays:

So much for learning from the past

Think of what that line of thinking would have led to had it been applied before a large percentage of people had cars.

‘It’s useless to pave so many roads, as less than X percent of people do any significant amount of driving. And the idea of interstate highways in particular are better off ignored, given how rarely people travel out of state.’

Seriously though, who keeps hiring these idiots who are so incapable of looking forward to what could be, and most likely will be, and instead choose to only focus on the past and what has been?

Even worse, despite always looking to the past, they seem to constantly miss the fact that technologies change and grow, so only focusing on the state they are now isn’t going to do you any good long term.

Mesonoxian Evesays:

Those 6.6% are of the 1%…

…because they can afford the higher speeds.

The rest of us? We get mailers every month our bill comes in to drop another $75 for faster “up to” speeds (translation: as long as you’re online during the time all other customers are, you’ll be paying $75 a month for the same speed you have now).

anonsays:

Re:

If you include the fact that probably only 6% of the population really have access to unlimited high speed internet the whole argument just falls away and you start to realise that this guy knows nothing about what he is talking about.Even saying the internet is not going to be used as a technology in the future points to this guy actually knowing very little about what is going on around him every day.I thought it was only the people in the 80’s who were a bit confused about the internet.

Dan Barrattsays:

UBB

How can he completely overlook the effect usage based billing has on usage? The vast majority of consumers and business simply can’t afford to make full use of their connections because they’ve been capped far below what their connections could actually transfer. Providers can’t continue to declare their’s no need for improving their networks and then turn around and charge a premium to heavy data users under the guise of network congestion. Which is it? Are the networks congested or are they under-utilized? It can’t be both.

Anonymoussays:

what will make people use the ‘super fast broadband service’ is pretty obvious really.

a) sensible pricing by ISPs
b) access to more services
c) less intrusion by governments
d) less intrusion by companies
e) less restrictions by the entertainment industries and their fucking obsolete gate keepers
f) sensible pricing by the entertainment industries
g) the right for customers to format and time shift, as i believe is now available in Canada (hush my mouth) and should be available worldwide!

Anonymoussays:

Re: And This

“What exactly does he think is going to happen to it?”

The article doesn’t say this, so I’m just speculating, but he might be expecting LTE and other wireless technologies to supplant traditional broadband.

This is the strategic plan of the Verizon/Comcast cartel. They’ve stopped building out their fiber optic network so they can focus on selling high speed wireless access at MUCH higher margins.

Designerfxsays:

let's show just how bad this is

lets take this context and transport it into any other argument, just to show how bad it is.

on building roads (capacity/infrastructure):

“people don’t use the roads enough now, so we shouldn’t build for more”.
At what point does that even remotely make sense? I could point to the entirety of the US roads infrastructure where in some instances they do have that viewpoint, and if you ask any traffic engineer worth the title they will tell you that it’s 100% the wrong view to have and represents why US road infrastructure sucks. It’s not the only reason, but absolutely a part of it.

Additionally, if they really want to see people use high speed internet, they should start by LETTING THEM. UK caps on internet usage are abysmal, to say the least. They’re as bad as US mobile internet cap usages in plenty of instances. Is it then a surprise people hoard the crap out of it?

out_of_the_bluesays:

Masnick's nutty notion logically means we need jet-cars.

Cause we’re just not getting places fast enough.

To propose spending billions for some unknown future potential need is typical of Mike and his technocrat class who don’t worry about “sunk (or fixed) costs”: those are for someone else to pay; Mike was born to only get benefits without considering the limits of reasonable. — And bet your last cent that Mike doesn’t want Google and other huge traffic-users to be taxed to pay for it.

All hail Mike “Streisand Effect” Masnick!
http://en.wikipedia.org/wiki/Streisand_effect

Jeremy2020says:

Re: Masnick's nutty notion logically means we need jet-cars.

Are you daft? Google went out and has started creating a fiber network (and paying for it) because the other companies aren’t meeting the need.

I assume you’re referring that Google doesn’t want to pay for traffic of people who have already paid for their own traffic.

Google pays for their own bandwidth.

I use high speed every day

I work from home, doing tech support for a software company. I use high speed internet every day for my job because I use screen sharing software to see customer’s computers and it takes a lot of bandwidth to use it. I can always tell when a customer has high speed and when they don’t, the people that don’t have a severe lag loading the software and even for simple mouse clicks.

Sure, maybe the everyday use of super high-speeds wouldn’t be apparent, but 15 years ago everyone was saving software installers on their hard disks in case they needed them again. Today we just redownload the latest thing. Did anyone envision that 15 years ago?

What will we be doing with our computers in 5 or 10 years that we can’t begin to envision today? We need to continue to support those innovations with infrastructure.

Keiisays:

Re: UBB

The internet and connection speeds have a mutual relationship.
As connection speeds increase, the internet grows to fill in around the new standard speeds. As the internet grows, the connection speeds need to be increased. As they are increased, the internet grows.
You only need to look at what the internet was in the early 90s and what it is today.
When we had slow dialup modems, websites were mostly like Geocities. Pictures were smaller, lower resolution because nobody wanted to spend 2 minutes downloading a full page jpeg. Streaming music was in low end midi format.
As our speeds increased, so did our consumption. Webpages blew up, images blew up, music blew up, the dawn of streaming video came upon us.
Who knows what the future of the internet holds? We’ll never know if we don’t invest in improving our connection speed or if we try to lock it down with rules and regulations.

out_of_the_bluesays:

FULL of Mike's wrong assertions.

This one is even labeled:
“And many are taking it for granted that high speed broadband is important to economic growth and viability.” — Well, it ain’t, as the prior two hundred years show, along with the last ten years or so in which the economy is actually shrinking. — Just today, say goodbye to your Twinkies: 18,000 jobs are ending at Hostess. Don’t blame the union, blame management with a package of two Twinkies selling for over a buck locally!

“Faster broadband doesn’t immediately get soaked up, but it does lead to greater investment in bandwidth-intensive services, and that will increase usage and expand the economy.” — Nope. Nearly everything that can happen over the internet is re-distributive, zero-sum game, not actually productive. Games and movies and music don’t actually produce anything, as any economist knows.

All hail Mike “Streisand Effect” Masnick!
http://en.wikipedia.org/wiki/Streisand_effect

[BTW this once I’ll that I merely copy the link Mike put up yesterday, assume he wants “his” one glorious innovation trumpeted but is too modest to mention it more than twice in the last month that I’ve noticed…]

Keiisays:

Re: FULL of Mike's wrong assertions.

Damn Twinkies pirates, pirating their Twinkies, costing jobs and the collapse of the Twinkies industry. Without those pirates pirating their pirate Twinkies, the Twinkies industry would be thriving!
We must immediately pass a bill that makes it so Hostess can charge people for Twinkies licensing and live performance and distribution and mechanical and reproduction rights.
It wouldn’t hurt to have timed and region releases either, to create artificial scarcity and increase profits.
Oh dear if ONLY they had some sort of lobbying organization to champion the Twinkies worker’s rights. Won’t you think of the dear workers! Slaving away making Twinkies for everyone to consume.
If people don’t want to purchase Twinkies legally, then we must tax them for it. In fact, let’s make Google pay Twinkies for everyone someone searches for Twinkies related information.

Lord Binkysays:

Uhh…. WHAT?! You have major $$$ industries saying slow internet is holding them back!

http://www.dslreports.com/shownews/Game-Industry-Broadband-is-Holding-us-Back-121831

This is just holding the system hostage until they can figure out how to double/triple+ dip again.

This is holding other industries hostage is what common carrier laws were trying to prevent.

John Fendersonsays:

Two points

Hmmm, I thought that RIAA et al considered using a lot of high speed bandwidth to be evidence that they’re pirates. Is Worstall bemoaning that there isn’t enough piracy? /sarc

More seriously, as other have pointed out, it is impossible for most people to use a significant fraction of the bandwidth available to them because they’ll hit their usage caps very quickly. I suspect usage would be higher if if people weren’t penalized for using what they’re paying for.

Also, the percentage of users that use all available bandwidth is not even remotely an indicator of the economic value of the bandwidth. Which users are doing so, and what they’re using it for, is much more relevant than the absolute percentage of the population.

Where Would Jesus Download?

Even Jesus H. Christ prefers South Korean broadband for torrenting.

“Jesus LOVES file-sharing. The bible has long been shared for free. The pope has warned governments to lay off copyright enforcement against file-sharers. Jesus copied fish and bread for the poor knowing full well that He would later be crucified for it. The bible quotes Jesus, speaking of charity, saying that when you share with each other, you are sharing with Jesus. He says there is no greater way to serve Him. Seeding will put you on a fast track to salvation. In fact, right before posting this I prayed and Jesus confirmed that He is currently running a seedbox out of South Korea. I asked him ‘why South Korea?’ and He replied, simply, ‘better bandwidth’. I also asked Him why I should capitalize words like ‘he’ and ‘him’ when it’s not grammatically correct and that?s when He stopped answering Me.”

Azteciansays:

Faulty Reasoning or Non Reasoning?

After reading this morning’s batch of Techdirt insanity, I’ve begun to wonder if there isn’t some kind of secret rule that requires senior officials in government and business to be morons..at least in certain areas.

Around two decades ago after I noticed that everything I saw on the news relating to anything military, an area where I have considerable experience and expertise, was not only wrong, but space-case wrong. By “space-case wrong” I mean it wasn’t only inaccurate, it was breath-taking stupid. Then I read an article that claimed EVERYONE with any expertise in a given area thought the same thing about the news coverage of that subject–but thought the rest of the coverage was okay.

Hmmm. I interpreted that to mean all news in all areas was stupid, but we could only recognize that stupidity if we happened to have some expertise in the area. I stopped watching the news after that… and I think that alone left me better informed.

If the same thing is true about senior officials and the subjects covered here, I’m not sure what I can quit doing.

I suppose in this case it’s better to keep an eye on them than to just roll my eyes and shake my head. Maybe alcohol abuse would help. I’d pretend it was fiction, but it isn’t believable enough for fiction.

This is HARD.

themusicgod1says:

Napster

Maybe if people weren’t been extorted every time they used that ‘high speed bandwidth’ they may actually use it? There was a point of time that you couldn’t walk a city block without encountering a computer with Napster on it. And then what happened? Everyone seems to have got afraid, or forgotten the promise of allowing other people access to your files, combined with running out IPv4 space down to the nubs, we seem to have forgotten or left behind the promise of the 21st century internet.

Unhappyslowusersays:

Broadband

I hope that this guy and others like him have no influence. We should be outraged over SLOW internet. I have VirginMobile and it is so slow it’s ads are fraud. They say it will play a video, it will not and never has. Those of us who rent don’t always have choices. I have site’s I visit that the front pages won’t load at all. If any one should have fast internet it’s the USA.

bshocksays:

which logical fallacy is this?

Is this a loaded question, begging the question, or is there a better logical fallacy label for it?

People don’t use what doesn’t yet exist, therefore it’s not necessary.

For no good reason, this reminds me of an anecdote I once heard from science fiction author Barry B. Longyear. Longyear was talking about how a publisher had printed a relatively small run for one of his novels, something like 10,000 copies (I have the number wrong, but it will serve). Once these copies got into bookstores, Longyear soon noticed that they sold all 10,000 quickly. He called his publisher and pointed out that all 10,000 copies were sold. “Good thing we didn’t print more,” answered the publisher. “We only sold 10,000.”

Lokisays:

And if only 6.6% of the traffic is using the speeds we already have then there really isn?t much of a case for throwing billions at making it all faster. So that, presumably, only 6.6% of the traffic will use that higher speed.

That sort of sounds like going back to 2005 and saying Facebook isn’t a useful service because only a very small part of the population uses it. (of course there are those who still argue Facebook isn’t a useful service, but that is a different matter.

Or maybe a better analogy might be going back to when AOL was still pay by the minute/hour and saying they didn’t need to increase load capacity before offering an unlimited flat rate plan because not everyone was using the network all the time.

You know, today people are carrying around phones that are more powerful computers than the actual computer I had ten years ago. Ask the American steel industry what not planning ahead for the future gets you.

Keith Brownsays:

Also it ignores a few facts. Namely that on average UK internet connections blow US connections out of the water on speed, to where their norm is closer to our average top?end, or even faster yet.

Also the very top end of anything can only be afforded by a minority until price comes down (by then it no longer is the top end, and just replaces the lower level offerings). So rather than thinking “only 6.6% of brits have the fastest offered, so it means the others cannot get it for one reason or another” he takes it as “the majority doesn’t need or want it, thus not worth the effort to try and offer it”

iCloud and the Like

iCloud, Google netbooks and everything else that is trying to use horrible residential services like its a fiber feed connection will drive demand.

Look at what happens when your wife or kid flick iCloud on and their 5Gb of pictures start synching to the net? Other than your residential Internet services sucking (worse than usual) for the next 3 days while you push 5Gb at 1mbps. Consumption will increase dramatically as applications centralize in the Internet/cloud.

Competition will set us free. The FCC rolled over long ago.

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