Broad Horizons

For a while, it looked like the sun was setting on broadband. Now be prepared for the dawn of a new, improved marketplace.
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5 min read

This story appears in the April 2002 issue of Entrepreneur. Subscribe »

This was supposed to be the year broadband made the Internet a truly super highway. The fiber optic backbone of the New Economy was going to deliver lower operating costs, new pathways to consumers and new entrepreneurial opportunities.

Instead, some of the largest custodians of broadband have been struggling just to stay afloat-and many didn't. A good chunk of the nationwide broadband infrastructure has changed, with billions of lost investment dollars, thousands of discharged telecom workers and plenty of creditors simply blown off.

But it's not your problem-it's in the hands of the pseudo-regulators, congressional dilettantes, investment bankers and lawyers who run the telecommunication industry.

Your problem is that as a business owner, you can't afford not to have broadband. In fact, you need a lot of other people to have broadband, too. And that's where the rubber is not making contact with the Information Superhighway. Broadband customers have suffered through difficult installations, slow and spotty connections and frustrating service.

That translates into unrealized worker productivity on your Web site. According to Nielsen/NetRatings, broadband surfers spend 67 percent more money online than those with dial-up, or "narrowband," access. It's also easier for DSL and cable modem users to digest video, audio or other clever marketing techniques and to stick with a shopping cart to completion.

How much better could it get? We might find out this year, because as that Nielsen/NetRatings tidbit suggests, the news about broadband is not all bad.

The Hits Keep Coming

Try as they might, broadband providers haven't scared off broadband users. The number of net surfers with DSL, cable or other broadband connections nearly doubled in 2001 to about 22 million, according to Nielsen/NetRatings. That's about 20 percent of the 106 million Americans who are online. Those newbies are crucial, says T.S. Kelly, a Nielsen/NetRatings director and principal analyst in New York City, because the switch to broadband is providing a much-needed second wave of growth.

An average broadband surfer generates 50 times the Internet data traffic of a dial-up user, adds Abhi Ingle, vice president of marketing for Covad Communications in Santa Clara, California. "People who have broadband spend more time online, visit more sites, transact more business and send higher- capacity stuff like digital photos."

Only 3 percent of the nation's optical fiber backbone is needed to handle that traffic. Bringing broadband to that "last mile" between telco offices and customer sites doesn't just help besieged telecom companies, says Ingle; it also gives a big boost to any business connected to the Internet.

On Hold With Broadband

When it comes to finding broadband for your company, you may have to work through the industry's weak financial state and limited availability in certain areas. A T1 line from one of the four Baby Bells may be the option with the least hassle. Count on trouble-free speeds as high as 1.5Mbps, but at charges well north of $1,000 a month.

You can also find comparable T1 service for about 30 percent cheaper from outfits like Covad, which also sells Symmetric DSL at similar speeds for still less money. Covad offers 1.5Mbps SDSL for around $400 a month. But SDSL bandwidth declines as you move away from a telephone switching center and, at three miles, you're out of range.

You might still be able to get Asymmetric DSL from a Covad or a Baby Bell. Download speeds vary between 144Kbps and 1.5Mbps, and upload speeds are from 128Kbps to 256Kbps. Prices run about $50 to $200 monthly, depending on the service level you demand. But complaints about installation delays and service are legion.

A new option in rural areas is the 802.11b version of fixed wireless over the 2.4GHz band used by indoor Wi-Fi LANs. Monthly charges start at $50 for satellite service at 128Kbps but can jump to $400 for T1 speeds or to $600 to $700 for symmetric 1.5Mbps. And because businesses need a direct line of sight to the transmitting towers, service may be affected by bad weather or by other users.

Despite drawbacks, either cable or satellite can provide a good back-up option, and it couldn't hurt to have multiple providers. For example, Kelly gets cable, DSL and dial-up in his home office.

All those visions of supply chain cost savings and cozy customer relationships that were spun by the dotcoms are promises that aren't broken-only deferred. The Internet will be back bigger and faster than ever. Be ready.

Shopping for broadband
While T1 and Asymmetric DSL are available from almost any local phone company, here are some other broadband options to explore:
  • This site offers a convenient document with price quotes from multiple high-bandwidth carriers.
  • BroadBand Wireless Exchange magazine: Information, news and an online directory of more than 1,300 fixed-wireless providers in the United States (
  • Receive e-mails with price quotes and service information from multiple broadband providers in your area to help you do some comparison shopping.
  • Covad Communications: T1, SDSL and ADSL direct and through ISPs in 109 U.S. markets (
  • DSLReports: Offers news and analysis of ISPs and telecom markets in addition to extensive testing and reviews by broadband customers (
  • Megapath Networks: Highly rated T1, SDSL and ADSL provider nationwide (
  • Another highly rated T1, SDSL and ADSL provider in 35 states.
  • Wireless Internet Service Providers Association: The name says it all- this Web site directs you to helpful and pertinent information on fixed wireless services and providers in your area (

Mike Hoganis Entrepreneur's technology editor.

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