Christopher Yoo: U.S. Fares Better than Europe in the Broadband Race

In a just-released Perspectives, Christopher Yoo, Professor of Law at the University of Pennsylvania Law School and member of the Free State Foundation’s Board of Academic Advisors, presented comprehensive data proving that the U.S. still leads Europe in broadband progress.

Professor Yoo reports that the U.S. led Europe in many broadband metrics in 2011 and 2012. Areas where the U.S. is ahead include high-speed access to service, fiber and LTE deployment, download speeds, and investment. Notably, Professor Yoo found that much of the success in the U.S. broadband market is attributable to the differing regulatory approaches applied in the U.S. versus Europe:

Europe has relied on regulations that treat broadband as a public utility and focus on promoting service-based competition, in which new entrants lease incumbents’ facilities at wholesale cost (also known as unbundling). The U.S. has generally left buildout, maintenance, and modernization of Internet infrastructure to private companies and focused on promoting facilities-based competition, in which new entrants are expected to construct their own networks. Regression analysis indicates that the U.S. approach has proven more effective in promoting NGA coverage than the European approach.

Free State Foundation scholars have also analyzed the data, and have been focused on debunking the negative rhetoric about U.S. broadband progress on the FSF blog and in other Perspectives. In order to remain a world leader in broadband build-out, speed, and quality, it is clear that the U.S. must not impose new regulations, but instead should continue to support innovation and growth by removing unnecessary regulatory barriers to network development. 

New Map Shows Europe is Behind in Broadband Progress

A new map shows the shortcomings of broadband in Europe. The data recently released shows that there is wide variation in broadband availability across the continent, with large areas unserved by next generation broadband access services, and some areas lacking access to just average connection speeds.

Source: BCE 2012, Point Topic, TechPolicyDaily.com

The map shows that there are some countries in Europe that are standouts in broadband, offering superfast speeds and boasting high rates of adoption. Denmark is one example of an EU broadband leader. However, such success is certainly not the norm in Europe.

The European Commission updated its Digital Agenda Scoreboard this summer, and also found that the EU still has a lot of work to do to meet the Commission’s “Connected Continent” goals. The update showed that in some countries, only about half of the population has access to average connection speeds, and other countries suffer from low broadband adoption. In France, Ireland, Greece, Croatia and Italy, less than 25% of households had access to high-speed services of at least 30 Mbps; these speeds were only available to 53.8% of households at the end of 2012. In Italy, 30% of citizens do not use the Internet at all and lack digital literacy skills.

Especially compared with the U.S., these reports are troubling for Europe. At the end of last year, 95% of Americans had access to high speed broadband from multiple networks. For the small percentage of Americans that dwell in mountainous areas, satellite broadband is available, as it is to 99% of Americans. As one report stated, “This is the envy of Europe.”

As I have noted previously, the data shows that the U.S. leads Europe in broadband speeds, connectivity, and value, and EU leaders are now acknowledging that Europe lags behind the U.S. in broadband progress. EU Commissioner and Digital Agenda Leader Neelie Kroes has urged European policy makers to look to the U.S. as an example of success in the ICT sector.

This latest map provides another indication of – and a way to visually grasp – the harms resulting from overregulation in Europe. In order to remain a world leader in broadband, the U.S. must continue to support innovation and growth by removing unnecessary regulatory barriers to network development and build-out. 

Neelie Kroes, EU Digital Agenda Leader: Europe is Behind

At Hubforum in Paris last week, Neelie Kroes, Vice President of the European Commission and Digital Agenda Leader, advocated for reform of Europe’s digital economy. Ms. Kroes stated, “Europe can't afford to fall behind [in the information and communications technologies sector]. But we are.” 

Ms. Kroes has been a vocal advocate for reform of Europe’s digital environment, and she has highlighted the negative effects the current regulatory scheme on broadband deployment, investment, information sharing, and innovation. In August, she stated, "today’s guidance to regulators just doesn’t give businesses – old or new – the certainty they need to make investments. It’s time to change." She advocated for widespread reform in order to keep Europe from “losing the global race to build fast fixed broadband connections.”

Ms. Kroes has acknowledged the “regulatory mess” in Europe, and urged reform based on the triumphs of the telecommunications and technology industries in the U.S. She cited Google, Apple, Facebook, and Amazon as exemplars of success in innovation and business, and noted that there are no European companies among the global leaders of the digital marketplace. She stated, “I don't want us to be the US . . . But I do think we could learn from them, celebrate risk and support innovation.”

Free State Foundation scholars have previously reported that Europe lags behind the U.S. in the telecommunications and technology sector, and FSF has endorsed the benefits of deregulatory policies in the U.S. compared to overregulation in countries like France. 

While the U.S. certainly has more work in this regard to do itself, regulatory reform is in order for Europe, since reports project that its telecom sector will suffer a 10% revenue dip in the decade from 2006–2016. In contrast, the telecom sector in the U.S. is projected to grow by 35% over the same period.

Last week Ms. Kroes announced that European Union leaders plan to meet later in the month to discuss reform of Europe’s digital marketplace. Some items on the agenda are whether and how to harmonize telecommunications standards in Europe, and how to promote innovation that starts and stays in the EU.

Europe is right to look to reducing regulation to resolve these issues and to foster growth and innovation in business and broadband development as well as investment in the ICT sector. Hopefully, Ms. Kroes can lead the EU to become a “connected continent” by bringing EU policies more in line with less regulatory policies that prevail in nations like the U.S.