Exec: Broadband Is Doing Just Fine

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To hear Cisco Systems Inc. tell it, the broadband market in the coming years is going to be a little like Col. Steve Austin of The Six Million Dollar Man — better, faster and stronger.

But just like that 1970s action-adventure character, it will also face its share of challenges.

The broadband-network equipment giant supplied a vision of the trends it thinks will drive the market in the coming years at a strategy briefing staged for the media last week.

Mike Volpi, senior vice president of Cisco's routing and technology group, told a New York media crowd that despite recent criticism that broadband had failed to meet its original promise of wildfire penetration, the technology has actually followed a consistent adoption curve compared to VCRs, color television sets and personal computers.

Probe Research Inc. estimates that by the end of this year, there will be 15.5 million broadband users in the United States, and that figure will rise steadily to 45.5 million by 2007.

"The good news is, it's actually not as bad as people make it out to be, because in four years we have achieved 10 percent penetration, which is pretty good," Volpi said.

"The bad news is when you actually look at the guts of this broadband, it is actually relatively low speed — we are talking about hundreds of kilobits as opposed to megabits of speed, which is really not a full enabler to all of the richness of applications."

In the coming years, consumers will learn more about what broadband can do and will demand more varied applications. Volpi cited Probe projections that by 2007, usage of streaming media, online gaming and peer-to-peer applications will dramatically increase, with streaming the leading use.

"Those are going to be the new applications that fundamentally don't exist today that will exist on broadband — that drive the massive use of bandwidth that happens in the future," he said.

Business cases also may change. So far, the broadband providers have been in the driver's seat, but as is the case with cable programming, broadband content providers might some day reap payments from distributors.

"From a Cisco perspective, we actually think both models will exist," Volpi said. Content providers will pay for broadband access, but over time, maybe broadband providers will actually pay the content providers, he said.

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