America’s ranking as 19th in broadband penetration comes as a source of pride to no one in the communications industry. But trying to fix the problem by emulating other countries would be a big mistake, analysts say. That’s because the United States’ geography and free-market systems are unique, just as other countries’ terrains and economies are distinct.
It’s tempting to blame the United States’ poor performance on bad policies, said Robert Atkinson, president of the ITIF, in a May 2008 report. However, he said, such blame would be misplaced because non-policy factors account for most of the difference in nations’ broadband performance.
“For example, the fact that over 50 percent of South Koreans live in large, multitenant apartment buildings makes it significantly cheaper on a per-subscriber basis to roll out fast broadband there compared to the United States, where many people live in single-family suburban homes,” Atkinson wrote. Likewise, he noted, the United States has the longest copper loop lengths in the world, increasing the cost of deploying high-quality, low-cost broadband.
Consider, as well, the reason why Japan leads the world in high-speed fiber-optic deployment: incumbent provider Nippon Telegraph and Telephone (NTT) is partially government-owned, which eases pressure for short-term profits, Atkinson said. As a result, NTT has an easier go of investing in fast fiber.
“This means that while we can and should learn from other nations’ broadband policies and performance, in the end we have to find our own way and develop policies that fit U.S. needs and conditions,” Atkinson said.
Keeping other nations’ missteps in mind is equally useful.
For example, CIMI Corp. analyst Tom Nolle said the United States ought to steer clear of the Australian model. Regulators Down Under have done a good job of protecting consumers from predatory pricing, he said, but they have failed to foster communications industry investment. That’s created an unbalanced regime that, if imitated here, would lead to certain disaster. Said Nolle, if it were tried here, it would lead to “a boondoggle that would make the CLEC bubble look like child’s play.”
