A lesson from the Finns andtheir fat pipes

The Finns have found is that if thebandwidth is cheap, people will start to use it in a different way
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The Independent Online

I HAVE seen the future and itsname is Finland. The Finns have invested heavily in technology in the name ofself-defence. A side-effect has been a huge leap in communicationstechnology.

I HAVE seen the future and itsname is Finland. The Finns have invested heavily in technology in the name ofself-defence. A side-effect has been a huge leap in communicationstechnology.

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

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

However,after my initial euphoria, I did a bit more research on the use of the broadband in Finland and found a surprising pattern. It's true that there ishigh use of video on demand. But there is very little other broadband usagein Finnish homes. People use e-mail, download apps faster, watchmore video clips; but the Telecom Finland research also shows that home useof broadband registers only in bursts, from 7pm to 11pm. So, for75 per cent of the day, the fat pipes are not used any more than if they weresimple phone lines.

This finding is driving the new thinking behind the waythat the Finns are paying for the service, with the conclusion that thebroadband connection should match the price of a normal phone line, andthe only additional charge should be for those short bursts when users downloadvideos. Needless to say, that does not sound good for companies thatprovide the fat pipes, as they were hoping for a lot more home usage torecoup the costs of wiring up homes.

Why don't the Finns use their fatpipes more? As my friend explained to me, there is nothing else out thereto 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 ofbroadband. So they sit there in their futuristic homes, waiting for theUS and UK media locomotives to produce something worth watching.

There areimportant lessons for us here. While nobody questions that video on demand isa good thing, telecoms companies will never recoup their investment if theyhave to sit there and wait for us to download enough films to cover the cost ofwiring up homes. According to my calculations, based on the Finnishmodel, everyone in the UK would have to download 18 videos per day, everyday, for 36 years to make video on demand a viable proposition. If I werethe head of BT, plotting my broadband strategy for the next century,investment based on video-on-demand usage would appear a poor way ofmaking a living.

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

These simple exercises are possible only ifbandwidth is cheap as well as fat. And they are more likely to be theapplications that will produce revenues for the broadband providers. Ifyou want to get the feel for what the wired future is like, a trip to Finlandis a must. And don't forget to mail me about your broadbandexperiences.