The United States must find a way to pipe high-speed Internet access into 100 million homes and small businesses by 2010, or risk losing an important lead in the global push to broadband, says Eric Benhamou, Palm Inc.'s chief executive officer.
Benhamou says ubiquitous home broadband could lift the economy out of its current slump and drive technical innovation. He spoke to members of the Massachusetts Software and Internet Council this week.
Just as electricity created a market for lamps and toasters, omnipresent broadband will drive the market for network appliances, says Benhamou, who came to Palm from 3Com Corp., where he remains chairman. Some such appliances, including 3Com's short-lived Audrey and the cancelled Kerbango Internet radio, have already flopped. The products failed because too few homes had broadband to take advantage of the devices, Benhamou says.
Today, some 80 percent of the households have access to broadband service. But only about 10 percent of them have signed up for it. A frequent explanation by pundits is that high-speed access doesn't offer enough extras to warrant paying US$40 to $50 monthly. Benhamou concurs.
Getting broadband into the home is proving a daunting task,Benhamou says. He advocates a team effort by private industry and government, with broadband named a legislative priority. "It has to come from the highest levels, from the president, Congress, the FCC, and on down," he said.
His pitch is shared by the lobbying group TechNet, cofounded last spring by a number of technology industry firms and individuals. Cisco, Intel, 3Com, and Benhamou himself were among the originators.
The industry doesn't seek government handouts, Benhamou says. But TechNet is stumping for a hands-off approach to telecom legislation, and help in the form of industry tax credits.
For example, the 1996 telecom deregulation legislation failed to encourage broadband, he says. Now, current bills may fix the earlier shortsightedness. For example, the Tauzin-Dingell Bill seeks to lift restrictions on local phone companies, so they can compete for long-distance data service without allowing rivals to share their local-phone facilities.
Still, the industry shoulders some blame for lackluster adoption of broadband services. Benhamou blames the industry for spending too much time and money for backbone networks, and neglecting the so-called last mile that brings service to homes. Benhamou says a measly 2.6 percent of the tens of thousands of miles of fiber optic lines are actually used.
"Access trails expectation," he said.
What's more, Benhamou warns, we could make the same investment mistake with the wireless Web. Companies are spending hundreds of billions of dollars licensing spectrum in the United States and Europe, without building adequate networks, he says.
Is copyright a constraint?
Benhamou also concedes the industry may have gone too far with some copyright initiatives, which could stifle growth.
He criticized harsh digital copyrights of music and video, and says digital rights management schemes serve the industry and not the consumer.
"Digital rights today define fair use so narrowly it's not even practical," he said. If copyright holders were more flexible about the use of digital media, they could help drive development of richer multimedia content for consumers. That in turn, Benhamou notes, would whet consumers' appetite for broadband connections.
Of course, ISP (Internet service provider) bankruptcy filings have contributed to a dismal year for broadband, Benhamou acknowledges.
"[The year] 2001 has been really lousy," Benhamou says. "I think we are all just looking forward to turning the page on a lousy year."