5 stocks for the next generation Internet
Sigh, another thing to worry about. The U.S. is falling behind in the Internet race.
According to Akamai Technologies (AKAM), average Internet access speeds in the United States were just 18th fastest in the world at the end of the fourth quarter of 2009. And if you rank countries on the percentage of connections with speeds above 2Mbs (Megabits per second), the United States ranks just 40th.
I bet you can guess who’s winning. 62 of the top cities for speed were in Asia. The three top countries for speed, according to Akamai, were South Korea, Hong Kong (which Akamai counted as a country, but don’t tell the folks in Beijing), and Japan. Those three countries were also the only three to average connection speeds higher than 7.5Mbs.
Akamai, which in the business of accelerating Internet content over its global content delivery network (CDN) isn’t the only one to notice.
The FCC (Federal Communications Commission) has sent a 10-year plan to Congress that envisions a new high-speed, broadband Internet as the core of the U.S. communication network. The agency notes that roughly one-third of Americans don’t have high-speed Internet connections because they live in areas without high-speed service, can’t afford high-speed service, or have never signed up for it because they don’t see the benefits. The FCC has proposed diverting money from the Universal Service Fund, which now spends $8 billion collected from surcharges on telephone service to subsidize phone service for rural or poor Americans, adding that to money collected by auctioning off 500 Megahertz of over-the-air spectrum now used by TV broadcasters, and then using that funding for its 100 Squared plan to equip 100 million U.S. households with high-speed Internet at 100Mbs by the end of the decade.
Proponents of the FCC plan—and you might imagine TV broadcasters aren’t exactly thrilled—say that greater access to higher speed Internet connections is critical to U.S. economic competitiveness in the decades ahead. Slower speeds will raise costs for business and consumers by limiting such innovations as digital healthcare networks. New products that require high speed connections won’t be built or used here meaning that the jobs that go with the creation of these new products will go elsewhere. The comparative productivity of U.S. workers will suffer as workers in high-speed countries can more quickly communicate, share work, hold meetings or access data.
Anybody who now suffers with the inefficiencies of a slow or spotty mobile phone connection knows that argument is true.
The crisis, which is what the FCC argues that we’re facing, isn’t a solely U.S. phenomenon. Internet speeds are dropping all over the world, largely because increasing numbers of people are accessing the Internet over relatively slow mobile phone networks. Traffic from narrowband connections to Akamai’s network increased by 41% in the fourth quarter.
In crisis lies opportunity, investors know. So what companies and stocks might benefit from attempt to end the crisis? Read more
