Editor's Note: Are American's as addicted to Internet bandwidth as they are to oil? Well, Greg "Gunner" Guenthner's back to respond that very question, and to figure out how penny stock investors can profit from the answer. Enjoy… Profiting from America's Addiction to Internet Bandwidth
By Greg Guenthner
November 25, 2008
The Internet is often portrayed as an infinite resource — an endless collection of content and information. This couldn't be further from the truth. Yes, the Internet is a vast resource. But as with oil, the fuel that powers the Web is finite. And if we fail to act soon, the way in which we access and use the Internet could change forever…
Where can we find scarcity on the web? Look no further than bandwidth. Bandwidth is the capacity to move information. When you pay your Internet bill, you're paying for bandwidth — which is why higher bandwidth options like cable or DSL cost more than older, lower-bandwidth dial-up. Your phone bill is made up of bandwidth too — all those texts you receive, the e-mails you get and the calls you make are really just bandwidth. Even your cable TV bill is for bandwidth. But if bandwidth is just a pipeline to information, why are we spending so much on it? ********************************** Without a major exchange to call home, "Orphan Stocks" are your ticket to 1,567%, 3,685%, 8,500%, EVEN 31,875% gains in a matter of days, or just hours… For the first time ever, you can get the hottest info on these "orphan stocks" delivered to you before the opening bell... BUT YOU MUST HURRY: Your invitation will expire as soon as the 182 available membership spots fill up! So check out this free report while you still can… ********************************** Information's supposed to be free, right? Well, the main factors that make up bandwidth costs are network maintenance and upgrades, as well as scarcity. When Verizon builds a new cell tower or Comcast installs new cables, that's an upgrade cost. It costs the company money to build that infrastructure, and the costs are passed down to the consumers who use it. No problem. But where things get interesting is scarcity — the Internet isn't quite as infinite as we would like to think, and that shortage of available bandwidth commands a hefty premium. Buying into Bandwidth Efficiency According to Tim Wu, a professor at Columbia Law School and the co-author of Who Controls the Internet?, Americans spend as much on bandwidth as they do on energy. "A family of four likely spends several hundred dollars a month on cell phones, cable television and Internet connections, which is about what we spend on gas and heating oil," Wu writes. Wu argues that communications companies have a vested interest in keeping the supply of bandwidth low, just as OPEC does with the production of oil. Scarce bandwidth means higher phone, TV and Internet bills and, ultimately, more profits for the companies involved. The federal government tells licensees what they may do with their part of the spectrum — the communications frequencies that we can broadcast over. Many of the spectrum's "owners" aren't doing a very good job of using this resource efficiently. Over 90% of the airwaves are empty at any time. ******************************* Special for Agora Financial Readers: You can still get your FREE pre-release copy of the I.O.U.S.A. DVD while supplies last… Washington policy makers are mortgaging your future...our future...and our children's future. It's unsound, unsustainable, and indefensible. Tough choices have to be made. Preferably now, while there still might be time. Think about it like this. If nothing else changes, Washington will owe over 240% more than every business in the U.S. makes each year...and it will happen in less time than it takes a child born this morning to reach age 35. Claim your free copy of the award-winning documentary I.O.U.S.A. and you'll discover we can salvage the financial security of our children, our grandchildren and America itself. ******************************* The best solution? Increasing competition and taking the power out of the hands of monopolistic telecoms. Wu says: "Relying on monopoly producers for the transmission of information is a dangerous path." And we may be headed down the right path. Recently, the Federal Communications Commission voted to open up the unused airwaves, or "white spaces," between channels to provide additional high-speed Internet capacity nationwide. But this is only a first step in the process of increasing the supply of bandwidth — one whose execution is unclear. If the telcos get the reigns to the "white spaces," we can kiss any chances of seeing any improvement in bandwidth costs goodbye. Fixing the Impending Shortage According to Jan Mrosik, head of South Africa's new Nokia Siemens Networks company, government inaction and the continued restriction of the airwaves could hamper data traffic: The U.K.'s Channel News reports, "Voice and data traffic worldwide is expected to increase 100-fold by 2015… The number of 'connected people' in the world will double, from 2.5 billion to 5 billion." But what's much scarier is that by 2015, Mrosik predicts voice and data traffic could be 10,000% of what it is today. That's almost an unfathomable level of growth. Just think about the situation with oil right now… Let's say someone needs to lower the amount he spends on gas for his commute to work. He can't change gas prices or the length of his commute, but he can change one thing — his car. If he trades in his SUV for a hybrid, his commuting costs could decrease substantially. The key to solving high bandwidth costs is efficiency. That's why the newest pick in the Penny Stock Fortunes portfolio is a small company that's developed a revolutionary technology to help governments, businesses and consumers better utilize the bandwidth at their disposal. This new technology will hit the market with full force in 2009 and you can get the full breakdown of this company by subscribing to Penny Stock Fortunes here… Sincerely,
Greg Guenthner P.S.: Our December issue of Penny Stock Fortunes also includes recommendations of three new penny stocks that have been battered during the market turmoil and are now severely undervalued. Check out this free report on our CXS Money-Multiplier system and join us at Penny Stock Fortunes today. Editor's Note: As always send any questions or concerns to us at jim@pennysleuth.com.
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