US Broadband’s Latest Report Card

Broadband ratings

On October 16, Akami released its quarterly state of the Internet rankings comparing nations around the world on broadband speeds. The United States continued its upward trajectory, improving in both average connection speed and average peak connection speed. This new data further illustrates that the claims of some broadband Casandras, such as Susan Crawford, regarding the weakness of U.S. broadband networks are highly misleading.

As ITIF has noted, over the last five years  America has made great strides in improving average connection speeds and enhancing broadband infrastructure. According to the latest Akami study, the U.S. now ranks eighth in the world in average connection speed, up from ninth last quarter, and 11th in average peak connection speed, which grew 34 percent year over year. It should also be mentioned that the nations ranking above us in both categories either have small, densely populated geographic areas where deployment costs are lower, or enjoy significant government subsidies for broadband deployment and adoption.

The data exemplifies the success of America’s competition-based broadband model in incentivizing innovation and promoting the continued deployment of high speed networks. This is particularly clear when we compare the U.S. to Europe, where slower network speeds and less access to high speed fiber and cable modem systems have led several officials to call for adoption of U.S.-style, competition-based telecom regulations.

That is not to say that all the news is good. The U.S. went from seventh to tenth in percentage of connections above 10 Mbps and our growth rate of 3.2 percent was well below the global average of 13 percent. This highlights the need for enhanced programs to improve broadband adoption, which will make it easier to support increased broadband investment, as well as continued support of the FCC’s National Broadband Plan to increase access to high speed networks, especially in high-cost areas

Overall, the U.S. broadband system is moving in the right direction and government policy should be focused on increasing adoption and improving access to next generation broadband technologies. This will ensure that high speed telecommunications can serve as a continued catalyst for innovation and economic growth.

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About the author

Dr. Robert D. Atkinson is one of the country’s foremost thinkers on innovation economics. With has an extensive background in technology policy, he has conducted ground-breaking research projects on technology and innovation, is a valued adviser to state and national policy makers, and a popular speaker on innovation policy nationally and internationally. He is the author of "Innovation Economics: The Race for Global Advantage" (Yale, forthcoming) and "The Past and Future of America’s Economy: Long Waves of Innovation That Power Cycles of Growth" (Edward Elgar, 2005). Before coming to ITIF, Atkinson was Vice President of the Progressive Policy Institute and Director of PPI’s Technology & New Economy Project. Ars Technica listed Atkinson as one of 2009’s Tech Policy People to Watch. He has testified before a number of committees in Congress and has appeared in various media outlets including CNN, Fox News, MSNBC, NPR, and NBC Nightly News. He received his Ph.D. in City and Regional Planning from the University of North Carolina at Chapel Hill in 1989.
  • http://www.waynecaswell.com Wayne Caswell

    Robert,

    Thanks for the link to your well-researched and well-written report on “The Whole Picture: Where America’s Broadband Networks Really Stand.”Unfortunately, as a consumer advocate and Big Broadband evangelist, I must take issue with this blog post and your ITIF report in a few areas that I will discuss below.

    In general, I’m disappointed that ITIF, with its emphasis on innovation and understanding of how broadband is an enabler, would have called for more, faster and cheaper broadband, rather than defending the telecom industry and not mentioning any of its bad behaviors. It’s obvious that you got considerable help from industry representatives in writing the report and arguing against conflicting reports from the OECD and others who rightfully criticize the U.S. telecom industry. Your stark defense of telecom-sponsored studies suggests a lack of objectivity, even if that was not your intent.

    You claim that, “Studies claiming the United States lags in international broadband standing tend to be out-of-date, poorly-focused, and/or analytically deficient,” but I’m sure the authors of those reports would disagree. You also said, “Many international broadband reports cherry-pick the wealth of data on the subject in order to reach a foreordained conclusion.” But, telecom-funded think tanks and paid academic researchers can be accused of doing the same thing. So where’s the objectivity?

    I do agree that various reports yield different positioning among nations, depending on the metrics used (speed, price, availability, and adoption), but while America’s broadband deployment is indeed improving in speed and coverage area, other nations are advancing too.

    You listed two primary reasons that other nations have faster networks: household density and government subsidies. But I’m sure you know that the American system is highly subsidized too – by Universal Service Fees that have been included in monthly phone bills for years and mostly paid for network deployments to rural and underserved communities.

    You describe the U.S. market as competition-based but mention nothing of telecom industry initiatives to prevent or severely limit deployment of Municipal Networks, even when they refuse to offer broadband service themselves. When denying coverage, the network operators often say the market there is just too unprofitable, but they prevent local tax payers from paying for their own networks. The telecom industry continues to push for state adoption of model legislation that was drafted by telecom attorneys and promoted by the American Legislative Exchange Council (ALEC). Over two dozen states have already adopted it, further stifling broadband competition and limiting adoption.

    Your discussion of broadband history and U.S. competition also ignored the effect of policy changes that viewed broadband as information networks rather than telecommunications networks, thus freeing big network operators from their previous requirement to provide fair and equal network access to competing ISPs. Look at the hundreds and thousands of ISPs who were driven out of business because of that policy change and what that did to eliminate effective competition.

    Your claim that “82% of American homes are passed by a cable technology cable technology capable of supporting speeds of 100 Mbps or higher” seems grossly misleading on two fronts: (1) very few network operators offer that speed in the markets they serve; and (2) the last-mile cable connection provides the incumbent with a natural monopoly, making it difficult for competitors to justify new build-outs. And then there are issues with how we use zip codes when measuring “homes passed,” often including all homes in that zip code when only a few actually have access.

    Network operators are able to exploit control of premise connections to gain a competitive advantage in content and services. In my view, they should be forced to decide among two different business models. (1) They can function as a highly-regulated network operator proving broadband services to all content and service providers equally and with network neutrality. (2) Or, they can participate in highly competitive markets for content and services but without control of the underlying network. They should NOT be allowed to do both.

    When discussing gigabit performance, your claim that U.S. broadband users don’t “currently need networks this fast” is misguided, because it doesn’t recognize the Chicken v. Egg dilemma, where network operators won’t deliver the capacity until there’s enough demand for it, but the apps requiring that capacity can’t be built until capacity exists and people have access. Similar thinking caused NTIA and the FCC to consider 100 Mbps as the target for a National Broadband Policy, but that too is short sighted in my view. I encourage you to “See the future of BIG Broadband and Gigabit-to-the-Home” (http://www.slideshare.net/waynecaswell/big-broadband-and-gigabittothehome-6726015). This 2006 presentation helps justify fiber-to-the-home and gigabit speeds with examples of applications that need that performance.

  • Robert D. Atkinson

    Wayne, thanks for your response. Rather than make a broad claim about
    our lack of objectivity, what specifically do you think we got wrong. Do
    you think we are wrong in saying that we are 4th in the OECD in
    deployment? Do you think we do not have among the lowest levels of computer ownership? Do you think we did not have among the highest rates of increase in speed? Your point about US system being subsidized is not quite right. USF is mostly to POTS, not broadband. And other nations or regions like Japan, Sweden, Korea, Hong Kong all have higher subsidies on a per-gdp basis. Re: Muni. BB, this is an area where we will have to disagree. I don’t see how overbuilding networks, often with government subsidies, can result in lower costs for BB. If one more is better, why not subsidize 5 networks to every home. Re ISPs, why do we care about ISP competition? The pipe is more important. The Euros had to do unbundling because they had little cable modem service. But they got into a DSL cul de sac. In addition, your claims about controlling content don’t frankly make any sense. Exactly what content does Verizon or Comcast control? Re Gig and chicken or egg. Sure, but how much more money should we charge every American household for a network they don’t want now, because gig networks are not free, despite the view of many advocates that corporations should simply cut their profits and give us free gig networks. Better to do what the Obama administration is doing with US Ignite program to develop Gig apps.

  • Fred Pilot

    “Overall, the U.S. broadband system is moving in the right direction
    and government policy should be focused on increasing adoption.”

    That of course assumes there is premises infrastructure to provide services to adopt in the first place. For 19 million Americans, there isn’t according to a 2012 FCC analysis.