Thursday, February 15, 2007

US falling off Broadband wagon

In 2001, the US ranked fourth in the world for broadband adoption rates. Today, the US ranks 12th in the world according to the Organisation for Economic Co-operation and Development, while The International Telecommunications Union ranks the US 21st in national broadband penetration. This grim trend is only likely to get worse as governments in highly competitive countries like India and China have long term policies designed to promote broadband internet access and view internet infrastructure as critical to future development and competitiveness.

The US, especially under the Bush administration, continues to place faith in the ability of the "free market" to deliver adequate service, something that it clearly is not doing relative to countries that lead the field of broadband delivery. Richard Hoffman at InformationWeek has an excellent article detailing the failings of American telecommunications companies and federal policy in this regard. Though he seems a somewhat inclined to equivocate on the subject of the free market policy that is leaving US internet infrastructure scattershot, the article is nonetheless packed with some alarming revelations about the comparisons between US broadband access and that in leading countries such as Japan, Korea and Norway. He further debunks the many rationalizations that the FCC and US telecom companies trot out in defense of their focus on the return on investment paradigm.

Typically, the FCC fudges the numbers by defining 200kbps as "broadband," a rate that would be laughed at in Japan and Korea, where the fastest growing broadband services deliver in excess of 100Mbps. And the cost? Hardly competitive compared to the much faster services elsewhere:
Japan's fastest-growing broadband service offers speeds in excess of 100 Mbps, and Korea offers 100 Mbps uploads and downloads. Most current U.S. customers are lucky to get one-tenth or even one one-hundredth of that speed, particularly for uploads -- and they pay more for the lower speed.

By OECD estimates, the U.S. price-per-megabit of connection speed is more than 10 times as high in the U.S. as in Japan. And for sheer speed, overseas offerings blow the U.S. away.
Of course, we have heard all the tales of major telecom companies thwarting efforts by local governments to offer high speed internet access to small towns and rural areas the telecoms have refused to service.
But even where local and regional governments have attempted to take matters into their own hands, success hasn't been guaranteed. SB740, introduced in the West Virginia Senate in 2005, was intended to increase broadband availability in the state by allowing local government bodies to act as Internet service providers in those communities where service wasn't already available. After intense lobbying by major telecommunications firms, the bill was weakened, and eventually dropped. This matches a pattern seen repeatedly across the country -- where a number of local municipalities and groups across the U.S. have created local broadband access opportunities where none previously existed, powerful lobbying efforts by telecommunications firms have smothered many of these initiatives.
Hoffman then delivers the argument against the telecoms and the free market approach regarding this new and increasingly crucial infrastructure, but still couches more than he should, failing to draw the obvious conclusion that ultimately, the free market looses:
In the absence of widespread government initiatives and incentives to roll out broadband services in rural areas, telecom providers have made the decision to maximize profits by rolling out service in those areas that have the highest population density and lowest cost of build-out per customer. The free market wins in the short term, quarterly profits are maximized, but the customers in less-profitable geographic areas lose, and the nation as a whole loses out over the long term, falling behind other nations with more farsighted policies.
It is indeed ironic that the country that invented the internet is now failing to deliver modern access to it. The federal government clearly needs to step in with a project akin to the Rural Electrification Act if things are to improve. Which means, of course, this country is not going to see anything like this while Bush in the White House.

If the US continues to lag global competitors, she surely will suffer in the long term and we obviously cannot depend on modern telecom companies, beholden as they are to a Wall Street that constantly penalizes long term investment, to deliver this now critical technology. The delivery of broadband service can no longer be viewed in the same vein as selling slurpees.


Blogger wagado said...

I agree completely!

PA Act 183 was set in place to push broadband access into the rural Pennsylvania areas. Verizon doesn't let you know about it when you call. The PA Public Utility Commission uses it as a crutch so as not to help you get the phone company moving.

Check out my blog for more info.

3:17 PM  

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