Cloud

Why 15% of US consumers can't use Netflix, Dropbox, and other cloud services

A Pew report indicates that 15% of US consumers have limited internet options other than a cell phone. With restrictive data caps, some of these consumers are unable to effectively utilize cloud services.

Image: Netflix

In the last year, initiatives have emerged for connecting users to the internet in developing countries — markets where connectivity is severely limited — using creative, untraditional, and rather expensive methods. Among these are balloons from Google Loon, satellites from O3b Networks, and mobile networks through Facebook's Internet.org initiative. These technologies by well-meaning American companies have created substantial barriers to access for cloud services in the US.

According to the Akamai State of the Internet report for Q4 2014, the US was only 40th in broadband (greater than 4 Mbps) penetration, and only 22nd in average peak speeds. To that end, a new report by the Pew Research Center indicates that 15% of Americans have limited options of internet access other than a cell phone, and 10% have no broadband service at home other than a smartphone data plan. 7% indicate that they lack options for internet access and have no home broadband service. The reasons for this are multifaceted.

For some users, the issue is economic, as Pew reports that 23% of smartphone owners have had to cancel or suspend service due to financial constraints. The cost of a data plan in the US is higher than plans in other countries, while speeds are slower than in Europe, and the gross margins of American carriers are roughly double those in Europe.

For other users, the issue is geographic: ISPs are extremely reluctant to provide wireline broadband services in rural areas, while individual municipalities are fighting to provide their own internet services. Some users in areas serviced by wireline ISPs report facing persistent and repeated cases of customer abuse. In a market with geographically limited connectivity, and a measurable segment of the market dependent on expensive and data-capped mobile phone plans, cloud-dependent services such as Netflix, Crunchyroll, Dropbox, and Steam are unable to reach consumers due to a digital divide developing between those in areas with adequate available infrastructure, and those without.

How bad is this problem?

The way in which people utilize the internet is constantly changing. Email is — more or less — always going to be email. Now, Facebook is mostly text and photos, but Mark Zuckerberg claims, "If you fast-forward five years, probably most of [Facebook] is going to be video."

Increasingly, some DVD and Blu-ray releases of films and television programs are being jettisoned in favor of a digital release on services such as Netflix or Crunchyroll. Dropbox and Google Drive scarcely serve a purpose if the act of using and syncing those files consumes an undue amount of bandwidth where — as is the case with mobile phone tethering — bandwidth is at a premium, data caps are set low, and the cost per GB for the end user is excessive.

For another example, video games are seeing more frequent digital-only releases, with Steam being at the forefront of this. A recent release, DiRT 3 Complete Edition, is $23.99, and requires 15 GB of hard disk space. On Verizon, the cost of a monthly smartphone data plan and 16 GB of data is $170 per month, well outside the reasonable cost for a single game — and that is only if you plan the purchase in advance. Users with smaller data plans are obliged to pay a $15 overage per GB. For comparison, a user with a 2 GB data plan that downloads the game would have a bill for that month of $275.

Other digital software distribution services — in essence, app stores — including the Windows Store, iOS or Mac App Store, Google Play, EA Origin, XBOX Live Marketplace, PlayStation Store, Nintendo eShop, and the Amazon Appstore all face the same essential problem. Digital software distribution is not the future, it is a present reality, and the use of these requires adequate and relatively inexpensive internet access.

Where are the solutions?

The current alternatives to traditional wireline internet face a variety of challenges to being adequate replacements, as technical limitations preclude them from enjoying popularity in areas serviced by traditional ISPs.

Satellite internet has been available in the US for decades, but the limited throughput of satellites, combined with the high latencies of transmitting data into space, still results in relatively higher prices and low data caps. The prices are considerably lower than LTE; for example, 20 GB of data on HughesNet is $60 per month. However, with the FCC's reclassification of broadband benchmark speed as 25 Mbps download, HughesNet lags behind, as it is only able to provide a maximum 15 Mbps down.

High Speed Country — an organization comprised of retired military engineers and owners and managers of radio stations — have designed a transmitter that allows Wi-Fi signals to be sent out over 6 miles on 2.4 GHz bands using an omnidirectional antenna and off-the-shelf consumer routers. Refinements in the technology are forthcoming that will permit transmission in excess of 25 miles, without the need for custom hardware mounted at a consumer's home, as is necessary with HughesNet and wireless ISPs using Cambium ePMP systems.

What's your link?

Do you live in an area with limited options for internet connectivity? Are you relegated to using your phone to tether your computer to the internet? Have you faced excessive bills because of high carrier prices? Or, have you rooted your phone or installed a custom ROM in for tethering without carrier interference? Tell us your experiences in the comments.

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About James Sanders

James Sanders is a Java programmer specializing in software as a service and thin client design, and virtualizing legacy programs for modern hardware.

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