Network: A lesson from the Finns and their fat pipes

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The Independent Culture
I HAVE seen the future and its name is Finland. The Finns have invested heavily in technology in the name of self-defence. A side-effect has been a huge leap in communications technology.

Imagine everybody in the UK having a 2Mb "fat pipe" connection into their sitting-rooms. Now add to it a PC in every room, connected by a wireless network and remotely controllable from your computer in your office. If on top of that you can imagine fully functional voiceover IP (telephony using the Net), you will be getting close to what the Finns have accomplished in a relatively short period of time.

I've just spent a few days visiting a friend in California who has a fully wired house and it felt like visiting Mars, and gave me an idea of what the Finns have that we don't. My usual sense of struggle and frustration with low-speed Internet delivery vanished as soon as I logged on to WebTV and started downloading movies from the video-on-demand service. While I was waiting for the download to complete, my thoughts were with Telecom Finland, which understands that video on demand is one of the basic human rights for my movie-obsessed generation.

However, after my initial euphoria, I did a bit more research on the use of the broad band in Finland and found a surprising pattern. It's true that there is high use of video on demand. But there is very little other broadband usage in Finnish homes. People use e-mail, download apps faster, watch more video clips; but the Telecom Finland research also shows that home use of broad-band registers only in bursts, from 7pm to 11pm. So, for 75 per cent of the day, the fat pipes are not used any more than if they were simple phone lines.

This finding is driving the new thinking behind the way that the Finns are paying for the service, with the conclusion that the broad-band connection should match the price of a normal phone line, and the only additional charge should be for those short bursts when users download videos. Needless to say, that does not sound good for companies that provide the fat pipes, as they were hoping for a lot more home usage to recoup the costs of wiring up homes.

Why don't the Finns use their fat pipes more? As my friend explained to me, there is nothing else out there to use, as the service providers are somewhat lacking in imagination. While Finland has leapfrogged everybody in the US and Europe in technology, the Finns have been unable to create enough new media content to make full use of broad band. So they sit there in their futuristic homes, waiting for the US and UK media locomotives to produce something worth watching.

There are important lessons for us here. While nobody questions that video on demand is a good thing, telecoms companies will never recoup their investment if they have to sit there and wait for us to download enough films to cover the cost of wiring up homes. According to my calculations, based on the Finnish model, everyone in the UK would have to download 18 videos per day, every day, for 36 years to make video on demand a viable proposition. If I were the head of BT, plotting my broad-band strategy for the next century, investment based on video-on-demand usage would appear a poor way of making a living.

However, we should not despair. One thing that the Finns have found is that if the bandwidth is very cheap, and comes in big, fat pipes, people will start to use it in a different way. My Finnish friend has linked up his home's alarm and lighting systems to his computer, and leaves it connected to the Net all day. He can thus monitor his house remotely, from his office computer. He is setting up a remote control system for the kitchen, so he can put the oven on from work and have dinner ready when he gets home.

These simple exercises are possible only if bandwidth is cheap as well as fat. And they are more likely to be the applications that will produce revenues for the broad-band providers. If you want to get the feel for what the wired future is like, a trip to Finland is a must. And don't forget to mail me about your broad-band experiences at eva@never.com

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