U.S. Broadband Ranking Needs Qualification, Experts Agree

WASHINGTON, June 5, 2009 – With Broadband being a keystone aspect of President Obama’s economic policies, it is important to understand where America’s broadband deployment and adoption rates stand internationally, a panel of experts agreed on Friday.

Although rankings of the global status of broadband deployment by the Organization for Economic Cooperation and Development have been maligned by some, policy makers can still draw some valuable lessons from the data.

Former Ambassador David A. Gross, now a partner at the law firm of Wiley Rein, said that OECD’s broadband statistics are flawed, since they do not take wireless hotspots, and facility sharing, such as college dorms and single access points for large buildings, into account. “To their credit,” however, “they are working on correcting it,” he said.

Gross was speaking at a panel of telecommunications experts at an event, sponsored by the Free State Foundation, entitled “Broadband Nation: Where Does the U.S. Really Stand in the World Rankings?”

The “most fundamental flaw” in the way broadband statistics are interpreted is the assumption that “the winner ranks higher and the loser ranks lower,” as if it were a zero sum game, he said. Because broadband benefits all, that zero-sum approach is not appropriate.

Gross should that the United States should not seek to limit broadband competition from other countries for fear they will benefit at our expense.

When more people in the world have broadband, everyone benefits, he said. Rather, policy-makers should continue to focus on what is best for broadband development in the U.S., regardless of what is happening in other countries. Although it is a good idea to look at other countries as examples, policy-makers should not look to them entirely as models, because “they have different situations,” he said.

Competition is another important factor in the development of broadband technology, said Gross. In looking at the effect of state intervention in broadband, the European Union found that when there are two or more broadband providers competing, state intervention is not beneficial, and likely harms competition.

In the question and answer session, Anna Snow, a representative from the United Nations, noted that this recommendation was in the draft stages, and had not been finalized.

Another important factor in the deployment of broadband, in addition to competition, are the adoption rates, said Link Hoewing, vice president of internet and technology issues for Verizon Communications. Consumer demand is what drives companies to invest in new and improved technologies.

Robert Atkinson, president of the Information Technology and Innovation Foundation, said that lack of personal computer ownership played a role in broadband adoption.

The United States, said Atkinson, currently ranks number 10 in broadband deployment and number 11 in PC ownership. Atkinson pointed to the example of Sweden, where the government gives free computers to low-income families with children who perform well in school. Coupled with additional state support for broadband networks, this policy enables Sweden to rank so highly in OECD ranking.

If the U.S. spent the same amount, proportionally, that Sweden has spent, “we would have invested $30 billion” into broadband, he said.

One practical step Atkinson recommended to increase PC ownership in the U.S. is catalyzing “a large share of community efforts.” Atkinson proposed that old, donated computers be refurbished and donated to low-income households. First, however, the recipients would be required to take four weeks of digital training before receiving the computers. These initiatives would be “locally based, but nationally supported,” he said.

The adoption of broadband beyond PCs must also be considered, said Christopher Guttman-McCabe, vice president of regulatory affairs at CTIA – The Wireless Association. Broadband is available on a variety of handheld electronic devices – a fact that is often left out of the equation.

Broadband to the home is being overtaken by broadband to the person, and this is going “to force policy makers to reconsider the definition of broadband adoption,” he said.

The price of broadband deployment in rural areas, said Hoewing, is “more than it needs to be.” The price of broadband in rural areas can easily be lowered through support for middle mile deployment, he said.