The (fat) pipes, the pipes are calling......

Ireland's new favourite son, President Elect O'Bama ( ) , would do well to recall that refrain from that Irish classic "Danny Boy" when considering thing for a new US CTO to do. He has a long list of potential objectives, 'twould be better to focus on a few, and - if the activities in Korea and Japan are any guide - knocking heads together to build a real Information Superhighway is a key task.

Work we are doing in understanding the evolution of the Internet implies that one of the biggest drivers of competitiveness going forward will be top class digital logistics. It was ever thus - first class comms have been the hallmarks of great societies from the first Sumerian runners (the SandalNet) onwards.

However, the buildout of the huge pipes in Asia seems to be missing most Western commentators on the Arts Technical except for the odd remembrance. To recap, Korea has built out a very high speed internet system via a combination of government, corporate and consumer collaboration. This is from a ZDNet piece in 2004, when 8Mb was the standard:

....in stark contrast to the regulatory morass that has stunted development in US telecommunications for several decades. South Korea's policy -- the cornerstone of a national technology initiative to help revive a devastated economy -- has created true broadband competition, which in turn has helped prices fall and speeds rise.

......

The decision to focus on broadband began in the mid-1990s and intensified after South Korea's economy was crippled by the collapse of the Asian financial markets in 1997, when policy makers targeted technology as a key sector for restoring the country's economic health.

Korean regulators set out a clear path for the network industry with well-publicised national goals. All big office and apartment buildings would be given a fiber connection by 1997. By 2000, 30 percent of households would have broadband access through DSL or cable lines. By 2005, more than 80 percent of households would have access to fast connections of 20mbps or more -- about the rate needed for high-definition television.

The government also spent $24 billion building a national high-speed backbone network linking government facilities and public institutions.

That was then....roll forward 4 years - the country’s average broadband penetration rate by household was 90.1% in 2007 and in Seoul, the rate was 107.8 %. This has had some interesting effects - Online TV for example:

KT, Hanaro, and Powercomm all are offering high-definition television via their broadband networks and bundling
this with Internet and voice services in “triple-play” services. Koreans are willing to spend twice as much of their
household income on broadband than U.S. consumers. They seem to see broadband as a superior good and
thus place a higher value on it. This may be because South Korea has a wide variety of broadband content, and
the more services consumers can access using broadband, the greater its value to them.

Not to mention the Public Goods now economically viable:

....the Educational Broadcasting System (EBS) broadcasts high school education programs via the
Internet. Because students need broadband access in order to get their assignments and access education programs,
these schemes encourage parents to get high-speed access for their children.

The government’s digital literacy programs also target groups that otherwise would be less likely to use the Internet.
For example, the “Ten Million People Internet Education Project (2000-2002)” worked to provide Internet education
to approximately a fourth of South Korea’s citizens. Similarly, the government provided subsidies to around 1,000
private training institutes over the nation for the purpose of educating housewives, in order to create demand in
households. Under this “Cyber 21” program the government offered 20-hour, week-long courses to housewives
for only about $30. In just the first 10 days, 70,000 women signed up for the courses.

Of course, not all vested interests will be delighted - DVD is in dire straits in Fat Pipe Broadband world, as NewTeeVee reports:

The slump of DVD sales numbers has also taken its toll on DVD rental stores. The Korea Times is reporting that there were 10,000 of these Blockbuster-type stores back in 2001, but the number was down to 3,500 at the end of last year. Finally, box office sales have been slightly down in 2007 as well, but some attribute this to the changing box office landscape rather than to piracy.

How much of this trend will translate to the U.S.? At this point, it’s hard to speculate, but there are some lessons to be learned in South Korea that should worry Hollywood, the most important one being that in the face of ubiquitous broadband, DVDs won’t be replaced by other physical formats or even VOD services, but by the cloud.

Interestingly enough, its storage wot done the deed though:

P2P networks aren’t at the center of the Korean downloading craze. Users are flocking to web-based storage solutions instead. The market for these so-called “webhard” services was originally popularized by LG, but now there are dozens of vendors, with some offering up to 1 Terabyte of storage space for free. The services are monetized through priority access points that guarantee higher speeds. There are supposed to be filters in place, but it’s obvious they don’t work.

Korean film studios now want their piece of the pie by becoming part of the cloud. According to KBS World Radio, they’re starting a webhard-based movie download service by the end of the year.

The Lesson from Korea is that you can have this now, it does add value, but it will require significant collaboration between Government and other stakeholders - and in our view, quite a few of Mr Obama's other problems are knock ons of this - for example all of these...

- Protect the Openness of the Internet
- Encourage Diversity in Media Ownership
- Open Up Government to its Citizens
- Bring Government into the 21st Century
- Deploy Next-Generation Broadband
- Promote American Businesses Abroad
- Invest in the Sciences
- Invest in University-Based Research
- Ensure Competitive Markets
- Restore Scientific Integrity to the White House
- Make Math and Science Education a National Priority
- Address the Dropout Crisis
- Pinpoint College Aid for Math and Science Students
- Increase Science and Math Graduates
- Lower Health Care Costs by Investing in Electronic Information Technology Systems
- Invest in Climate-Friendly Energy Development and Deployment
- Modernize Public Safety Networks
- Advance the Biomedical Research Field

...are in one way or another impacted by big pipes, and the rules and policies one could broker for using them. And not just the US, any other (especially Western European) countries should learn the same lessons.