U.S. broadband service is competitive with other nations, researcher says

Long-held notion that the U.S. has fallen behind many other nations is largely incorrect, think tank finds

The U.S. has better broadband service than some critics give it credit for, with speeds, availability and prices that are competitive with many other developed nations, according to a new study from a tech-focused think tank.

While the U.S. still lags in some broadband indicators, particularly adoption, the country ranks in the top 10 among Organisation for Economic Co-operation and Development (OECD) nations in several other broadband measures, according to the Information Technology and Innovation Foundation (ITIF).

"The United States has made rapid progress in broadband deployment, performance, and price," the report said. "Taking the high cost of operating and upgrading broadband networks in a largely suburban nation, the prices Americans pay for broadband services are reasonable and the performance of our networks is better than in all but a handful of nations that have densely populated urban areas and have used government subsidies to leap-frog several generations of technology ahead of where the market would go on its own."

That conclusion comes in stark contrast to assessments from digital rights groups such as Free Press and Public Knowledge and Susan Crawford, a former science advisor to President Barack Obama, who has argued that U.S. broadband service is slow and expensive compared to many other countries.

Large broadband providers have "divided up markets," eliminated competition and given U.S. residents "second-class access," Crawford told journalist Bill Moyers last week.

The ITIF report, released Tuesday, paints a different picture. The U.S. has the third-highest rate of wired intermodal competition in the OECD, behind Belgium and Netherlands, the report said.

About 89% of U.S. residents have a choice of five or more broadband providers, counting mobile and satellite, and 85% have a choice of two or more wireline broadband providers, the report said.

The average network rates of all broadband connections in the U.S., residential and commercial, was 29.6M bps in the third quarter of 2012, with the country ranking eighth in the world, the ITIF said. More than 80% of U.S. residents have access to a cable broadband network that will eventually be capable of delivering 100M bps, raising concerns among European authorities that they are falling behind the U.S., said Richard Bennett, a co-author of the ITIF report.

While the highest-speed broadband services in the U.S. are expensive, compared to other countries, the country has the second-lowest cost per capita in the OECD, behind Israel, for entry-level pricing, the report said.

In real-dollar costs, the U.S. ranked in the middle of OECD for broadband prices for speeds under 20M bps, and fourth most expensive for broadband service above 20M bps.

The U.S. is 15th among OECD nations in broadband adoption, the ITIF report said.

Crawford, a communications law professor and author of recent book, "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age," has suggested that broadband be treated in the U.S. more like a public utility than a private service.

Cable-based broadband is "pretty much a monopoly now" in the 85% of the country that doesn't have access to Verizon's FIOS service, Crawford said in an email. Subscriber numbers for telecom-based DSL service is dropping fast, and the telecom fiber services don't cover enough territory to compete with the big cable providers, she said.

"When it comes to high-speed Internet access, the U.S. should be looking at other nations in the rear-view mirror," Crawford said. "The U.S. should be in the lead, making sure our citizens are taking advantage of the new ways of making a living that will depend on cheap, ubiquitous, high-capacity Internet access."

Mobile service, with its spotty coverage, is not a true competitor to wired broadband, she said. "The telcos are not overbuilding cable," she said. "People really want speed, and only cable has it."

But the ITIF report suggested that super-fast broadband may be overrated, at least in the current Web environment. Netflix streams HD movies at speeds of less than 5M bps, Bennett said during a Tuesday debate about the report.

"Virtually all current applications perform well on average speed networks and certainly don't require or perform better on gigabit networks," the report said. In addition, many U.S. customers don't want to pay the extra price for super-fast broadband, Bennett said.

Some groups discounted the ITIF report. The report gives too much emphasis on broadband competition from slow DSL and from data-capped mobile service , said Michael Weinberg, vice president at Public Knowledge.

"This report seems to be stuck in 1996 with regard to intermodal competition," he said in an email. "Telcos have expressed very little interest in upgrading their networks in a way that would really allow them to compete with cable."

The report seems to be focused on the U.S. being "good enough, or at least not so bad that you are actively inhibiting today's application," Weinberg added. "This type of world view strikes me as a recipe for stagnation on both the user and the innovator side."

The report takes a balanced approach on U.S. broadband metrics, Bennett said. The report shows the U.S. is "neither a wasteland nor a utopia," he said.

Groups saying the U.S. is closer to a broadband wasteland are driven by economic philosophy favoring government involvement in some markets, Bennett added. "The arguments that say the United States is falling behind the rest of the world are just not empirically sound," he said. "There's a philosophical disagreement that's pretending to be a factual dispute."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Copyright © 2013 IDG Communications, Inc.

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