OECD Broadband Ranking System Needs Restructuring, Says Think Tank

By William G. Korver, Reporter, BroadbandCensus.com

WASHINGTON, July 29 – Basing telecommunications policy around the faulty ranking system of the Organization for Economic Cooperation and Development would lead to an “ill-defined national broadband strategy,” officials from the Phoenix Center think tank said Monday.

Decrying the widespread assumption that America has fallen behind the rest of the world in broadband penetration, George Ford and Lawrence Spiwak criticized the OECD’s ranking system at a luncheon in the Rayburn House Office Building.

The current OECD system ranks measures broadband penetration on a per capita, and not a per household basis, which has led to countries with smaller household sizes moving up in the chart since 2001.

People do not buy broadband connections, Ford said; rather, households and businesses buy broadband conections.

Moreover, said Ford and Spiwak, countries that have risen in recent rankings – Denmark, Sweden, Switzerland, and the Netherlands – are small and do not have large rural areas where broadband deployment remains a challenge.

Additionally, many countries that were near the top in broadband rankings in 2001 have since fallen, said Ford. “Miracle” Japan has dropped in the OECD ratings, for example. In spite of having 100 Megabit per second-capable broadband networks, Japan ranked behind the U.S. in the December 2007 OECD ratings.

If areas in the U.S. that do not have broadband access were reached, the country would only climb to eleventh in the world – assuming that none of the counties directly before and behind the U.S. make similar adjustments, he said.

Politics and the poor data collection abilities of nearly all governmental agencies in OECD countries are also to blame for the current unreliability of OECD rankings, he said.

Ford said that the  existence of two competing broadband networks in the U.S. – cable modem and digital subscriber line – put America way ahead of where it should have been in 2001.

Ford said if one factors in price, per capita Gross Domestic Product, education, the percentage of senior citizens, population density, urbanicity, population per household, population per business establishment, and the length of time one is measuring, one should get a fairly accurate depiction of why the U.S. has fallen in OECD broadband rankings.

Hence the U.S. is pretty close to where it needs to be at fifteenth in the world, he said. The countries that should be worried are Luxembourg, the Czech Republic, Ireland, the Slovak Republic, and Greece: each are underperforming based on the Phoenix Center’s “Broadband Efficiency Index,” said Ford.

Under this “efficiency index,” the U.S. ranks 13th.

The decline in the United States’ OECD ranking does not mean that a change in government broadband policy is necessary, said Ford.

If the government desires to eradicate broadband unavailability in the U.S., Ford suggested that federal and state governments eliminate taxes on wireless services, stop local governments from extracting “rents” from telecommunications providers seeking to offer video services, and increasing the number of broadband education programs and computers in schools.

Additionally, the government should allow tiered pricing and network management. Together, these actions could increase broadband deployment, he said. After all, Ford said, “it is [the company’s] freaking money.”

Web Sites and Reports Referenced in this Article:

• The Phoenix Center web site.
• The Broadband Efficiency Index: What Really Drives Broadband Adoption Across the OECD? Phoenix Center Report (PDF)
• U.S. Broadband Better Than Reflected in OECD Study, Says FCC Commissioner (BroadbandCensus.com, July 14)