Thursday, September 19, 2013

Update: The U.S. Still Leads Europe in Broadband Speeds, Connectivity, and Value

The FCC will soon be releasing its Ninth Broadband Progress Report – or 706 report. These reports track the progress of broadband deployment and adoption throughout the United States. In anticipation of this report’s release, it is timely to provide an update on the progress of broadband development. Back in March, I compared broadband development in the United States to the buildout and availability of high-speed broadband Internet access in Europe. The data at that time clearly showed that the United States was leading Europe in broadband speed, penetration, choice in access, and investment. Recent data confirms that Europe still trails the U.S. in broadband development.
In March, the latest data indicated that most Americans had access to broadband speeds of 7.2 Mbps, which placed the U.S. as the ninth fastest broadband provider in the world. Since then, Akamai has released its latest State of the Internet Report. Akamai reported that in the first quarter of 2013, more than 733 million IP addresses from 243 unique countries/regions connected to the Internet; over 3% more than the previous quarter, and 10% more than the first quarter of 2012. The United States ranked first, leading the world in the number of unique IP addresses accessing the Internet. 
The Office of Science and Technology Policy and National Economic Council reported in June of this year that overall, average delivered broadband speeds have doubled since 2009. In 2012, North America’s average mobile data connection speed was 2.6 Mbps, the fastest in the world, nearly twice that available in Western Europe, and over five times the global average.
The global average connection speed continued to increase in the first quarter of 2013, growing 4% to 3.1 Mbps. The U.S. ranked 9th in average connection speed, reporting 7.4 Mbps, and ranked 8th in high broadband connectivity, with South Korea, Japan, and Hong Kong taking the top three spots in both categories. The U.K. ranked 12th, while other European countries fell further behind.
Annual investment in U.S. wireless networks grew more than 40% between 2009 and 2012, from $21 billion to $30 billion, and exceeds investment by the major oil and gas or auto companies; wireless investment in Asia (including China) rose only 4%, while investment in European wireless networks remained flat during this time period.

Broadband prices vary extremely across the world, ranging from $5.50 a month in Sri Lanka to an exorbitant $1,753 a month in Cuba. Prices in the U.S. and Europe are comparable, as both regions offer access for approximately $20 a month. This is contrary to some critic’s views that Europe offers cheaper services to consumers. However, the ITU reported in 2012 that the U.S. leads Europe in the relative value of broadband services: The U.S. provides broadband access at prices equal to just 0.5% of Gross National Income per capita.
Despite these statistics, some critics still claim that America lags behind Europe in Internet speeds. While it is true that some countries, such as Switzerland, offer peak connection speeds that surpass those offered by the U.S., this does not detract from the fact that the U.S. offers greater availability, value, choice, and high average connection speeds to its consumers. 
Additionally, The Innovation Files’ author Richard Bennett analyzed Susan Crawford’s reaction to criticism of her views that the U.S lags behind Europe in the deployment of high-speed Internet access. Mr. Bennett accurately notes how Ms. Crawford systematically mischaracterizes current data, or utilizes unreliable sources. 
For example, Ms. Crawford claims the European Commission’s Digital Agenda Scoreboard says: “the U.S. is behind South Korea, the UAE, Hong Kong, Japan, Taiwan, Latvia, Lithuania, Norway, Sweden, Slovakia, Bulgaria, Portugal, Iceland, Denmark, Estonia, Finland, and Norway,” yet the report makes no such claim and doesn’t even mention most of the non-European countries on Crawford’s list. The report actually finds, “Fixed broadband penetration in the EU was slightly higher than in Japan and just below that of the U.S. as of July 2012.” In fact, Mr. Bennett points out, Europe’s fiber buildout is well behind that of the U.S. According to OECD data, FTTH buildout in the U.S. was ranked sixth in 2010, behind only Japan, Korea, Slovakia, Finland, and Denmark. The U.S. likely ranks even higher now because, since 2010, the U.S. has installed more fiber miles per year, 19 million, than the rest of the world except China. 
Although the latest data clearly favors the U.S. as a leader in high-speed Internet access, Mr. Bennett properly acknowledges that network quality is less important in America than the challenge of getting more people connected to the Internet by either wired or mobile broadband.
As Free State Foundation Board of Academic Advisor member Justin (Gus) Hurwitz noted in his piece “Let Them Eat Cake and Watch Netflix released earlier this month, an important measure of success in broadband deployment is the speed at which broadband availability is bridging the digital divide, not the peak speed sparsely available in a given country or community, or the speed at which a single consumer can download multiple HD Netflix movies simultaneously. Mr. Hurwitz correctly noted that the definition of “high-speed Internet” used by the FCC, 4 Mbps down/1 Mbps up, accurately measures how many average users can access the Internet to learn, work, participate in public discourse, and become part of the digital community. 
It is important to take stock of where the U.S. stands among other countries regarding broadband deployment. However, the same “talking broadband down” crowd I mentioned in my March blog is too focused on the few areas where U.S. broadband progress could improve.
As FSF President Randolph May has said since 2007, the correct path is not “defining down” the U.S.’s broadband progress. Critics of the policies and progress of broadband buildout in the U.S. frequently mischaracterize data in order to justify unnecessary regulation and market interference. Instead, critics should ask the more important questions: Is the market providing choice, value, and widespread, affordable high-speed Internet access, and is broadband deployment meeting consumer demands. As discussed above, the answer to these questions is “yes.”
The U.S. continues to make great progress in broadband development and deployment. In order to remain a world leader in broadband service, U.S. policies should continue to support the current trajectory of growth and innovation by forbearing from imposing unnecessary regulations and barriers to broadband deployment.