Monday, April 23, 2007

Without a Plan, U.S. Drops Further in Global Broadband

America needs a national broadband policy, not more excuses from the broadband companies.

This point was driven home once again with the release of new broadband data that places the United States now 15th out of the 30 Organization for Economic Cooperation and Development (OECD) nations in per capita broadband use.

Broadband in America

The "Hands Off" Approach: America Slips Further Behind

The U.S. had slipped from our 12th place ranking just six months ago when we dropped from the fourth place ranking we held in 2001. And our free fall will continue as long as we allow phone and cable companies to dictate broadband policy in Washington and monopolize access across the country.

A Country Without a Plan

The countries at the top of the OECD's list have true national broadband policies. Thomas Bleha recently explained in Foreign Affairs that America's lag "is arguably the result of the Bush administration's failure to make a priority of developing these networks. In fact, the United States is the only industrialized state without an explicit national policy for promoting broadband."

Instead, U.S. policymakers and the FCC have left development of domestic broadband to the whims of predatory ISPs, which dole out untold millions in campaign contributions and fees to Washington lawyers, lobbyists and P.R. consultants to fight against efforts to serve the public interest while pushing for more corporate benefits and giveaways.

The Telco Swindle

It's "sheer hypocrisy" for companies like AT&T and Verizon to scream for deregulation when they themselves are largely to blame for our broadband decline. As Internet guru Cory Doctorow wrote, these phone and cable giants base their business on "government-granted extraordinary privileges."

But these privileges extend little further than their bank accounts.

Meanwhile, America is losing ground to Japan, France, Canada, the Netherlands and other developed nations. We now have slower speeds at higher prices than any other developed country in the world. Yet the handful of ISPs that control access in this country continue to reap massive and growing profits -- more than a $115 billion dollars in 2006 alone.

Most U.S. homes can access only "basic" broadband, which is among the slowest, most expensive, and least reliable in the developed world. And it's not getting any better. According to the OECD report, the United States ranks 20th out of 30 nations in the growth rate of broadband penetration over the past year.

The 'Hands Off' Approach = Billions in Losses

America's intensely "hands-off" system of recent years has resulted in a marketplace dominated by the few. Earlier this year, Richard Hoffman of InformationWeek reported that American broadband "doesn't represent the true state of the United States as a technology leader. Laissez-faire isn't a viable stance if the goal is to compete most effectively against other industrialized nations."

"Those nations able to craft genuinely forward-looking telecommunications policies that promote universal access as well as enhancing competition, and which can balance short-term market forces against long-term national priorities, will reap the current and future benefits of increased economic productivity," Hoffman concludes.

The consequences of a policy vacuum will resonate for generations, said S. Derek Turner, research director of Free Press and principal author of "Broadband Reality Check," which calls on U.S. leaders to get behind a vision that will regain our position as the world leader in technology.

"The growth trends indicate that the United States is likely to continue to fall behind the rest of the world in broadband penetration, which will have lasting and significant effects on U.S. economic performance."

Turner found that the benefits of higher broadband penetration accumulate exponentially. "Thus even a minor increase in our ranking has a tremendous positive impact on American consumers," he said. "If broadband penetration were 50 percent of all U.S. homes [it's now at approximately 40 percent], economists estimate that consumers would realize a $38 billion annual surplus. If household broadband penetration were at 95 percent, the consumer surplus would be $350 billion."

Getting Back on Track

At a Senate Commerce Committee hearing tomorrow on broadband competitiveness, members Free Press, Consumers Union and the Consumer Federation of America will urge Congress to pursue a comprehensive national broadband policy that enhances competition, fosters neutrality, protects free speech, expands opportunities to bring new providers into the marketplace, and uses economic incentives to stimulate investment in underserved areas.

The data coming out of the OECD makes this even more urgent. It's time we regained control of our broadband destiny by creating a national plan that puts our future back on the right track.

-- For more, read the important analysis at

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