Broadband Lessons Beyond Our Borders

Just a few years ago, the U.S. was a leader in the percentage of households with broadband. Now it's a laggard. We have much to learn from other places, especially in connecting broadband in rural communities.

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Today, as Vice President Joe Biden travels to rural Georgia to announce the first grants from the new, $7.2 billion broadband fund, it’s a good time to remember that other countries have much higher rates of broadband use than the United States. How have they succeeded where we have lagged, especially in bringing broadband in rural areas?

According to the Federal Communication Commission’s Report on Rural Broadband Strategy, which draws upon data from 2007, 54% of U.S. urban households have broadband access, compared with only 39% of rural households.  Given the increasingly network-driven nature of the global economy, the ramifications of our rural/urban imbalances must be understood not only as a matter of domestic policy, but as a matter of concern for our international economic vitality.

Yet, as policy analyst Thomas Bleha has been arguing since his widely discussed 2005 Foreign Affairs article on U.S. broadband development, our current regional imbalances are primarily caused by the lack of any clear domestic broadband policy. The Bush Administration refrained from articulating any clear broadband development goals or programs, preferring instead to allow telecom providers to build as they saw fit. Now we are just beginning to form a national policy.

Absent any strong government policy on broadband issues, the current U.S. penetration rates in rural and urban communities might appear surprisingly robust.  When placed in an international context, however, the United States’ broadband rates lose much of their luster.

According to a 2009 report by the Organisation for Economic Co-operation and Development (OECD), the United States is presently 15th in the world in terms of overall broadband penetration, lagging behind Korea, most of Western Europe, and most of the Scandinavian countries, as well.  The United States has not always occupied such a middling position, however, though the effects of a laissez-faire broadband policy were quickly felt in our international standings: a precipitous slide from 4th place in 2001 to 13th place in 2004.

The United States’ declining position in the international broadband rankings cannot merely be dismissed as an inevitable handicap of our vast territories and dispersed populations. While it is true that many of the world’s leading broadband-connected nations — such as South Korea, Taiwan, Singapore, and Israel — have primarily dense, urban environments conducive to inexpensive broadband development, the United States still lags behind many other countries with population densities similar to our own.

Countries such as Sweden, Finland, Canada and Norway all have population densities roughly comparable to ours, yet they enjoy considerably higher rates of broadband penetration. These countries have higher rates of broadband adoption not because of fortuitous geography or densely-packed populations; rather, more of their citizens have access to high-speed internet connections because their governments made formal policy decisions which made the creation of such infrastructure a national priority.

In Japan, for instance, the government initiated an aggressive, multipronged approach to improving broadband build-out and connection speeds in both urban and rural areas.  Beginning in 2001, the program removed regulatory hurdles, forced fair interconnection rules, and, most importantly, encouraged build-out by private companies and municipalities through a combination of partial subsidies, tax incentives, and debt guaranties. [img:broadbandlinecountries.jpg]

And unlike the United States, where 200kbps access speeds were for several years regarded as “broadband” connections, the Japanese program rewarded far faster connection rates.  As a result, Japanese broadband subscribers now receive, on average, service more than twelve times faster than what is available to U.S. customers.  

While Japan’s approach used market mechanisms to encourage mostly private providers to deliver access to rural customers, Scandinavian countries have been even bolder in utilizing the unique strengths of public institutions to ensure equal access to broadband services.  In Norway, the government instituted a program with the stated objective of providing all Norwegians with a broadband connection by the end of 2007. The country was so committed to this end that it decided that “public funds will be used to assist in achieving broadband extension in areas where this is not commercially viable.”

More recently, the Finnish government signed a bill into law that mandates that all citizens should have access to a 1 mbps connection by July 2010, with the minimum speed being increased to 100 mbps by the end of 2015.

There are plenty of international examples this country can draw on as we design a broadband system for rural America. We ought to use them.

We are at a critical juncture where we can acknowledge our recent laissez-faire missteps and learn from the policy-oriented successes of our neighbors abroad, or we can choose to continue down our present path, embracing a system which privileges immediate private profits over the long-term competitiveness of its citizenry.

Sharon Strover is director of the Telecommunications and Information Policy Institute at the University of Texas. Nick Muntean is a Ph.D. student in the Radio-Television-Film Department at the University of Texas at Austin.

 

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