Monday, February 4, 2013

The Myth of Population Density and the High Cost of Broadband


Bill St. Arnaud One of the enduring myths that is used by apologists for incumbent broadband operators as to the high cost of broadband in Canada and the US is our low population density.

 Since Canada and the US have low population density compared to The Netherlands or South Korea, they argue that therefore the cost of delivering broadband will be significantly higher because of the much greater distances that need to be covered.

While this may be true for rural and remote broadband services, most Canadians and Americans (over 80%) live in urban areas. The cost of deploying broadband in urban areas is almost the same anywhere in the world. The bigger factors that affect the cost of broadband deployment in urban areas is whether the fiber is buried or put on poles. Most urban communities in North America are serviced by poles and therefore cost of deploying fiber should be a lot cheaper than, for example in The Netherlands where it is mostly buried.

Canada and the US have almost the same urban density as The Netherlands (82%) and South Korea (83%). As such,in urban areas there is no reason why the cost of broadband should not be the same as The Netherlands or South Korea.

Clearly other factors (hint: lack of competition) that are play in keeping broadband speeds and prices much higher in Canada and the US than many other advanced broadband countries.

By Bill St. Arnaud , Green IT Networking Consultant

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