Are today’s home connections approaching fast enough for broadband? That was the subject of a late November post of mine in the context of an FCC review of the US broadband standard. In 2020, I wrote a similarly entitled post, challenging the myth that universal fibre should be on national agendas.
According to Deloitte’s 2024 TMT Predictions, “In some parts of the world, some consumers may have all the bandwidth they need in 2024.”
Deloitte predicts the most commonly used applications (audio and video streaming, video calling, gaming, and home security) will not see any increase in the recommended bitrates. Indeed, Deloitte suggests that some applications may loosen bitrate requirements thanks to improvements in compression technologies.
The implication is that consumers may be reaching a ceiling for the speed of their residential broadband connections.
For 40 years, those of us who were online at home sought faster connections. I remember dialling into Bell Labs with my Hayes 1200 modem. I marvelled as my AT&T Unix PC painted the green screen so much faster than my old 300 baud acoustic coupler.
Deloitte predicts that consumers may focus less on headline broadband speeds and look more at factors such as reliability, bundles, indoor networks, or just plain value.
That said, consumer demand for higher speeds is only part of what drives network infrastructure needs for broadband providers. Globally, there are governmental incentive programs and regulatory requirements aimed at eliminating the digital divide with minimum speed requirements. These range from as little as 10 megabits per second (Mbps) to 1 gigabit per second download speeds, so providers should build networks with these speeds to receive funds or comply with mandates. Next, there are competitive pressures in the market: If one provider is advertising ultrafast speeds, others may need to match or at least come close. Further, building network infrastructure is often an investment with a 20 year plus horizon, so there is an element of futureproofing.
Still, Deloitte observes that the technologies being deployed today are “more reliable, more sustainable, easier to provision, cheaper to operate, and have lower latency.” As such, carriers will continue to deploy fiber to the home and DOCSIS 4, upgrading existing facilities and expanding to unserved areas.
So are we approaching fast enough for broadband yet? Deloitte says that 100 Mbps is more than enough for a household with 2 people; the firm suggests that fewer than 1% of households in most markets might need over 300 Mbps.
By the end of 2022, CRTC data says 93% of Canadians (including 67% of rural Canadians) had access to 50/10 Mbps speeds with unlimited downloads. 87% of Canadians have access to 100 Mbps service (at year end 2021, the latest published data point). On a weighted average basis, the CRTC says Canadians subscribe to 331 Mbps (2022).
Does that mean the need for investment is complete? Hardly. There’s more work needed to upgrade certain areas, and to extend networks to unserved communities.
To what extent will consumers look at factors beyond headline speeds when buying broadband services?