Japan Offers Faster Speeds, Lower Prices Than U.S., Report Documents

WASHINGTON, June 24, 2009 – Actual costs in the price of residential broadband in Japan are both cheaper and faster than those in the United States, according to a new report from the New America Foundation’s Open Technology Initiative.

Chiehyu Li, a research fellow of the NAF, assembled a price comparison of residential broadband that includes types of broadband – cable, digital subscriber line (DSL), and fiberoptics – and the speeds and which these prices include.

Japan’s most extensive incumbent telephone provider Nippon Telegraph and Telephone (NTT) has focused on fiber-optic lines, in competition with Yahoo! BB and @nifty, offering downloading speeds ranging up to 100 Megabits per second (Mbps) to 1 Gigabit per second (Gbps).

The U.S.’s principal fiber -optic broadband provider is Verizon Communications, with downstream speeds of 10-50 Mbps. The comparison shows fiber in Japan costs around $25-56 per month, or $0.06-0.70 per megabit) for condominium residencies and $55-67 ($0.03-0.60 per megabit) for single house residencies, still less that Verizon’s $50-145 per month ($2.90-5.00 per megabit).

The same three Japanese companies compete in the DSL and cable service fields, with speeds up to 8-50 Mbps with costs around $30-60 per month ($0.40-$32.00 per megabit), but there is also the large cable Internet provider J:COM who offers speeds up to 160 Mbps at $63 ($0.40 per megabit).

Cable or DSL in the U.S. offers speeds up to 1-7 Mbps at $20-45 monthly ($2-26 per megabit) although Comcast has high-speed Internet at 15-50 Mbps, from $43-140 per month.

Significant competition in Japan has consumers generally opting for higher speed Internet because the marginal costs are so low, the study said.

This report is not exhaustive, as it leaves out wireless provider comparisons, but has raised important areas for NAF has said they shall look into, such as NTT’s reselling of service to its competitors that allows them to provide services at lower prices than on their own systems.

It may be no surprise that Japan provides better access at cheaper prices, but the release could be a catalyst for further research. “We want to explore the regulatory and economic conditions that have given rise to these speed and pricing discrepancies,” says Director of the Open Technology Initiative Sascha Meinrath.