Japans super high speed internet cost?

[Wheezer]

Text

If you get excited about the prospect of really, really fast broadband Internet service, here?s a statistic that will make heart race. Or your blood boil. Or both.

Pretty much the fastest consumer broadband in the world is the 160-megabit-per-second service offered by J:Com, the largest cable company in Japan. Here?s how much the company had to invest to upgrade its network to provide that speed:$20 per home passed.

The cable modem needed for that speed costs about $60, compared with about $30 for the current generation.

By contrast, Verizon is spending an average of $817 per home passed to wire neighborhoods for its FiOS fiber optic network and another $716 for equipment and labor in each home that subscribes, according to Sanford C. Bernstein & Company.

Those numbers from Japan came from Michael T. Fries, the chief executive of Liberty Global, the American company that operates J:Com.

His larger point: ?To me, this just isn?t an expensive capital investment,? he said.

The experience in Japan suggests that the major cable systems in the United States might be able to increase the speed of their broadband service by five to 10 times right away. They might not need to charge much more for it than they do now and they?d still make as much money.

The cable industry here uses the same technology as J:Com. And several vendors said that while the prices Mr. Fries quoted were on the low side, most systems can be upgraded for no more than about $100 per home, including a new modem. Moreover, the monthly cost of bandwidth to connect a home to the Internet is minimal, executives say.

So what?s wrong with this picture in the United States? The cable companies, like Comcast and Cablevision, that are moving quickly to install the fast broadband technology, called Docsis 3, are charging as much as $140 a month for 50 Mbps service. Meanwhile other companies, like Time Warner Cable, are moving much more slowly to upgrade.

Competition, or the lack of it, goes a long way to explaining why the fees are higher in the United States. There is less competition in the United States than in many other countries. Broadband already has the highest profit margins of any product cable companies offer. Like any profit-maximizing business would do, they set prices in relation to other providers and market demand rather than based on costs.

Pricing at Liberty varies widely by market. In Japan, its 160 Mbps service costs 6,000 yen ($60) per month. That?s only $5 a month more than the price of its basic 30 Mbps service. In the Netherlands, meanwhile, it charges 80 euros ($107) for 120 Mbps service and 60 euros ($81) for 60 Mbps. Mr. Fries said that he expected these prices would fall over time.

?Our margins go up,? he said. ?But we are delivering more value.?

Cable executives have given several reasons for why many cable systems in the United States are going very slowly in upgrading to Docsis 3. There?s little competition in areas not served by Verizon?s FiOS system, which soon will offer 50 Mbps service. And some argue there isn?t that much demand for super-high speed.

Mr. Fries added another: Fear. Other cable operators, he said, are concerned that not only will prices fall, but that the super-fast service will encourage customers to watch video on the Web and drop their cable service.

The industry is worried that by offering 100 Mbps, they are opening Pandora?s box, he said. Everyone will be able to get video on the Internet, and then competition will bring the price for the broadband down from $80 to $60 to $40.

Aren?t you worried that the prices will fall too? I asked.

?Maybe,? he said very slowly. ?We?ll see how it happens. We want to keep it up there for now. It is a premium service.?

I think the bolded pretty much sums it up.

 

[Kaido]

Save us Obama!

 

[RESmonkey]

I want.

 

[KeithTalent]

Competition may be part of it, but there is also a lot less land to cover in Japan, which would help reduce costs by quite a bit I would think. I also think this has been discussed ad nauseum here before.

KT

 

[Kaervak]

The industry is worried that by offering 100 Mbps, they are opening Pandora?s box, he said. Everyone will be able to get video on the Internet, and then competition will bring the price for the broadband down from $80 to $60 to $40.

The horror, the absolute horror!

 

[WraithETC]

My 1.5mbs connection is proof that capitalism is failing to satisfy my pr0n needs.

 

[Bignate603]

Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

 

[DrPizza]

That's enough. I've completely changed my opinion. Cable companies in the U.S. = suck. Spidey07, you're the next one to come to this realization (I hope) - til now, I've been one of the few in agreement with you. Granted, piracy is a major problem. Idiots downloading the same 200GB of data every month because they can't be inconvenienced to save it are a problem. But, it really looks like bandwidth is being kept artificially low, and we've been deceived about impending doom if more and more people start getting netflix online.

 

[Fayd]

Originally posted by: WraithETC
My 1.5mbs connection is proof that capitalism is failing to satisfy my pr0n needs.

wrong. capitalism isnt at fault here. it's market regulation that has failed you.

 

[DrPizza]

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

 

[TruePaige]

Originally posted by: DrPizza

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

It's true in the way that at least our major cities should have high speed connections, with high speed pathways to our backbones.

 

[WraithETC]

In my medium size city we have Fios just not where I live in the city. So this causes verizon to send me fios ads in a mocking manner.

Me: Hey I got your ad for fios I wanted to order the package
Verizon: lol got you no fios for you
Me:
Comcast:

 

[PlatinumGold]

Originally posted by: DrPizza

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

really? hmmm, in South korea almost 50% of the population lives in the greater seoul area alone and another 30% in the pusan area. so the 2 largest cities in South Korea and their immediately surrounding cities make up over 80% of the population of South Korea.we are talking less square miles than probably the state of New Jersey. it will take verizon probably 3 to 4 years to roll out Fiber to every neighborhood in NJ alone and there is a very large motivation on the part of verizon to do so as they got a state wide franchise to offer tv services for the state of NJ, making it one of the higher profit centers for FIOS. South korea's infrastructure is also much newer than that of most cities in the US. so yes, it is a very very valid argument, this "population density" argument.

 

[PlatinumGold]

Originally posted by: Wheezer
Text

If you get excited about the prospect of really, really fast broadband Internet service, here?s a statistic that will make heart race. Or your blood boil. Or both.

Pretty much the fastest consumer broadband in the world is the 160-megabit-per-second service offered by J:Com, the largest cable company in Japan. Here?s how much the company had to invest to upgrade its network to provide that speed:$20 per home passed.

The cable modem needed for that speed costs about $60, compared with about $30 for the current generation.

By contrast, Verizon is spending an average of $817 per home passed to wire neighborhoods for its FiOS fiber optic network and another $716 for equipment and labor in each home that subscribes, according to Sanford C. Bernstein & Company.

Those numbers from Japan came from Michael T. Fries, the chief executive of Liberty Global, the American company that operates J:Com.

His larger point: ?To me, this just isn?t an expensive capital investment,? he said.

The experience in Japan suggests that the major cable systems in the United States might be able to increase the speed of their broadband service by five to 10 times right away. They might not need to charge much more for it than they do now and they?d still make as much money.

The cable industry here uses the same technology as J:Com. And several vendors said that while the prices Mr. Fries quoted were on the low side, most systems can be upgraded for no more than about $100 per home, including a new modem. Moreover, the monthly cost of bandwidth to connect a home to the Internet is minimal, executives say.

So what?s wrong with this picture in the United States? The cable companies, like Comcast and Cablevision, that are moving quickly to install the fast broadband technology, called Docsis 3, are charging as much as $140 a month for 50 Mbps service. Meanwhile other companies, like Time Warner Cable, are moving much more slowly to upgrade.

Competition, or the lack of it, goes a long way to explaining why the fees are higher in the United States. There is less competition in the United States than in many other countries. Broadband already has the highest profit margins of any product cable companies offer. Like any profit-maximizing business would do, they set prices in relation to other providers and market demand rather than based on costs.

Pricing at Liberty varies widely by market. In Japan, its 160 Mbps service costs 6,000 yen ($60) per month. That?s only $5 a month more than the price of its basic 30 Mbps service. In the Netherlands, meanwhile, it charges 80 euros ($107) for 120 Mbps service and 60 euros ($81) for 60 Mbps. Mr. Fries said that he expected these prices would fall over time.

?Our margins go up,? he said. ?But we are delivering more value.?

Cable executives have given several reasons for why many cable systems in the United States are going very slowly in upgrading to Docsis 3. There?s little competition in areas not served by Verizon?s FiOS system, which soon will offer 50 Mbps service. And some argue there isn?t that much demand for super-high speed.

Mr. Fries added another: Fear. Other cable operators, he said, are concerned that not only will prices fall, but that the super-fast service will encourage customers to watch video on the Web and drop their cable service.

The industry is worried that by offering 100 Mbps, they are opening Pandora?s box, he said. Everyone will be able to get video on the Internet, and then competition will bring the price for the broadband down from $80 to $60 to $40.

Aren?t you worried that the prices will fall too? I asked.

?Maybe,? he said very slowly. ?We?ll see how it happens. We want to keep it up there for now. It is a premium service.?

ya, what it cost verizon to roll out fios to each house is really relevant here. ;roll: it costs verizon significantly more because it is new infrastructure. once the fiber is in place, verizon can increase speeds with very very minimal investments, at the rate of Cents / house not dollars per house, hence they made the move to fiber. cable company's with docsis 3 will be able to compete for a short period of time, but looking 10 to 15 years in the future, fiber has a huge advantage, hence verizon decided to invest so much more into fiber to the premises, vs cable companies and AT&T's fiber to the communities.

 

[amdhunter]

Other cable operators, he said, are concerned that not only will prices fall, but that the super-fast service will encourage customers to watch video on the Web and drop their cable service.

Whenever I move out of my current place, I plan to use internet access exclusively for entertainment. I can see why the cable operators are scared of providing more bandwidth.

 

[Bignate603]

Originally posted by: DrPizza

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

You're correct about it being similar in cities where people are living in high rises. However, your average American living in the suburban sprawl around cities or in medium to small towns has a far lower population density. In high rises you can run the wiring to 100 homes just by connecting a very small number of buildings. For suburbs to connect 100 homes you need a great deal more. Assuming a suburb has 1/2 acre lots with homes on both sides of the street it will take 1.4 miles of wiring just to run down past all of those homes. With wiring that long you'll probably need systems to boost the signal strength which adds to the cost.

 

[spidey07]

Distance!!!! Subscriber density! It's so freaking easy to provide this given subscriber density of Japan.

 

[her209]

Originally posted by: Fayd

Originally posted by: WraithETC
My 1.5mbs connection is proof that capitalism is failing to satisfy my pr0n needs.

wrong. capitalism isnt at fault here. it's market regulation that has failed you.

Yup. Its bullshit that I can only choose from one cable service provider, phone provider, etc.

 

[spidey07]

Originally posted by: DrPizza
That's enough. I've completely changed my opinion. Cable companies in the U.S. = suck. Spidey07, you're the next one to come to this realization (I hope) - til now, I've been one of the few in agreement with you. Granted, piracy is a major problem. Idiots downloading the same 200GB of data every month because they can't be inconvenienced to save it are a problem. But, it really looks like bandwidth is being kept artificially low, and we've been deceived about impending doom if more and more people start getting netflix online.

That's fine. What is the distance and subscriber density for each NAP? It's all about "how far and how fast" do you want. Bandwidth is "relatively" cheap as long as you are talking about under 10 kilometers to the aggregation layer. As distance increases and also speed cost of optics rise exponentially not to mention speed of electronics to switch that (routing).

Then again this is all common knowledge. Many people in a small space means you can provide tons of capacity for cheap. But how far do you have to go and how fast to get out of that area?

 

[NFS4]

Originally posted by: PlatinumGold

Originally posted by: DrPizza

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

really? hmmm, in South korea almost 50% of the population lives in the greater seoul area alone and another 30% in the pusan area. so the 2 largest cities in South Korea and their immediately surrounding cities make up over 80% of the population of South Korea.we are talking less square miles than probably the state of New Jersey. it will take verizon probably 3 to 4 years to roll out Fiber to every neighborhood in NJ alone and there is a very large motivation on the part of verizon to do so as they got a state wide franchise to offer tv services for the state of NJ, making it one of the higher profit centers for FIOS. South korea's infrastructure is also much newer than that of most cities in the US. so yes, it is a very very valid argument, this "population density" argument.

Let's forget FIOS for a second. Japan is upgrading existing cabling/lines which is why it's so cheap. Don't most major U.S. cities have cable?

So why can't TWC or Comcast do similar upgrades in their markets?

 

[JMapleton]

I wonder if the age of most of the buildings in Japan has something to do with it. Large portions of the United States are nearly 150+ years old.

 

[BrokenVisage]

Their funny language symbols must travel through them pipes much faster and more efficiently then ours.

 

[ric1287]

Well cmon guys, at least the American ISP's are trying their damnedest to make internet faster and more affordable to everyone. Or their a bunch of greedy assholes who are crippling innovation and sending us 10 years backwards........I forget which one it is.

 

[StageLeft]

And here I am in the US about to pay $50 month for not just much slower but more importantly (because really 5 mbps is totally ample for me right now), capped at 40 gigs/month. FAIL

 

[PlatinumGold]

Originally posted by: NFS4

Originally posted by: PlatinumGold

Originally posted by: DrPizza

Originally posted by: Bignate603
Comparing Japan to the US for cost to wire up homes isn't a fair comparison. Population density in Japan makes it easier to wire up a huge amount of homes with less work. I do think that cable companies can do it cheaper and faster than they do, but unless we want to live packed together much more than we do right now it will always cost more to connect up broadband.

To a degree, that may be true. But, look at major US cities. Population density is already decently high (albeit not as high as in cities in Japan.) Claiming "population density!" is just a diversion though. How much more does it really cost if the FIOS cables are 50 feet longer? Hmmm?? $500 more?

really? hmmm, in South korea almost 50% of the population lives in the greater seoul area alone and another 30% in the pusan area. so the 2 largest cities in South Korea and their immediately surrounding cities make up over 80% of the population of South Korea.we are talking less square miles than probably the state of New Jersey. it will take verizon probably 3 to 4 years to roll out Fiber to every neighborhood in NJ alone and there is a very large motivation on the part of verizon to do so as they got a state wide franchise to offer tv services for the state of NJ, making it one of the higher profit centers for FIOS. South korea's infrastructure is also much newer than that of most cities in the US. so yes, it is a very very valid argument, this "population density" argument.

Let's forget FIOS for a second. Japan is upgrading existing cabling/lines which is why it's so cheap. Don't most major U.S. cities have cable?

So why can't TWC or Comcast do similar upgrades in their markets?

there is still an issue with distance. yes, existing infrastructure exists, but it's mostly older and supports greater distances than what you see in japan. what is possible in japan for a low costs will cost more over greater distances.