Phoenix Center Urges Broadband Rankings to Include Demand-Side Data

WASHINGTON, July 16, 2009 – The Phoenix Center on Wednesday released a report today that aims to further debunk the frequently-cited Organization for Economic Cooperation Development’s report ranking the United States at 15 in broadband penetration among OECD members.

“If you live by the metrics, you die by the metrics,” said Phoenix Center Chief Economist George Ford.

Ford referred to the OECD’s report that ranks countries’ broadband on a system that leans upon population size to the number of possible connection points. The Phoenix Center report said that the OECD reports do not qualify for residential households and their respective sizes nor the number of business connections and the potential and actual number of people gaining broadband by these connections.

Phoenix Center President Lawrence Spiwak said that “the problem is our focus on ranks.”

Even if all the current funds are dumped into broadband nationwide and actual coverage increases, he said, it really will not help the U.S. ranking in OECD reports because “they do not really account for demand-side broadband.”

Newly reinstated to his second term as a commissioner at the Federal Communications Commission, Robert McDowell said that even “if America was 100 percent broadband saturated, they would still fall to 20 under OECD standards.”

McDowell went on to say that if proper information isn’t collected, bad information or decisions strictly based on rankings “could be misleading and be used to justify potentially harmful policy.”

McDowell touted the regulations released July 1 by the National Telecommunications and Information Administration regarding the Broadband Development Information Act. The law, as implemented by the federal stimulus legislation, requires the creation of a national broadband data map by February 2011.

McDowell said that gave the FCC what the proper time to make good policy.

Spiwak said that the aim of the Phoenix Center was “to to refocus this analysis to: what is our goal?”

Ford’s report argued that the proper relationship for any sorting of broadband ranking needs to be the “actual” broadband available divided by that of the “targeted” broadband, a value that need to be arrived at differently by each country’s broadband goals.

One of the other countries that have been upset with the OECD rankings is Portugal, a country that has been pouring money into educational technology and other broadband tools, said Ford. “These guys were making policy the right way and probably being punished for it.”

Ford said that America is also exceptional in the relationship between our fixed and wireless providers, categories not accounted for properly in the OECD report. “You can’t just add fixed and mobile.” He said that numerical weights must be placed on the quantity of each of those variables.

Ford said that data that needed to be collected included: what is purchased, how much is paid, what is the demographics of broadband buyers, and data about broadband costs, by modality.

In the plenary session of the event, University of California at Berkeley Professor Michael Katz said that the U.S. “need[ed] to develop measures of individuals’ access and use of modern telecommunications” as a part of gauging value.

Katz said this may come by collecting more demand-side data, and possibly adding questions to government surveys.

Katz said that this was a stronger measure than simply compiling household user data or ranking on a per-capita basis. The plenary session agreed that useful broadband data was currently lacking. Many expressed the hope that the BDIA would be an agent in gathering this information in order to make proper comparisons.