US Should Provide Incentives to Boost Broadband Access

The U.S. government should create a national broadband strategy, create incentives and support efforts to boost broadband demand in order to increase broadband access, according to a new report, Explaining International Broadband Leadership released on 1 May.

The study examines broadband promotion policies in 9 nations and finds that while the U.S. shouldn’t look to other nations for silver bullets or assume that practices in one nation will automatically work in another, U.S. policymakers can and should learn from broadband “best practices” in other nations.

The countries included in the research were Canada, France, Germany, Japan, The Netherlands, South Korea, Sweden and the UK.

Emulating the right policies will enable the U.S. to increase its broadband performance faster than in the absence of proactive policies. Based on the findings from other nations, the report proposes 11 policy recommendations to spur both deployment of more ubiquitous and faster networks and adoption of broadband by consumers. These recommendations include:

Leadership matters. Nations with robust national broadband strategies fare better than those without. For example, leadership from the very top of the Japanese government and corporate world, including Prime Minister Yoshiro Mori and Sony Chairman Nobuyuki Idei, helped craft and implement a strategy to make Japan the “world’s leading IT nation” by 2005.

Incentives matter. Because it is expensive for operators to deploy broadband networks, many countries have provided financial incentives. For example, the Swedish government allocated more than $800 million to spur broadband deployment, particularly in rural areas of the country. For the U.S. to match this investment as a share of GDP, it would need to invest more than $30 billion, a far cry from the minimal public investments made to date.

Competition matters. But in contrast to those who promote unbundling of networks as the key factor in national success, the report finds that both inter-modal and intra-modal competition have strengths and weaknesses and national environments largely influence which mode of competition is best for a nation to promote. For example, many European nations turned to unbundling regulations to promote intra-modal competition because inter-modal competition was limited, in part due to the fact that regulators had let incumbent telecommunications companies own cable networks.

Demand-side policies matter. Given that only around two-thirds of Americans have a computer at home, even the most robust supply-side policies will not produce universal broadband usage. Other nations have taken the demand side more seriously. For example, the Swedish government has subsidized computer purchases and as a result, almost 90 percent of Swedes have a PC at home.

It’s high speed networks, stupid. With broadband take-up rates increasing in most nations and with the advent of a host of next-generation applications that demand faster networks, broadband speeds are becoming just as important when assessing a nation’s progress in broadband. In some countries fiber to the home is responsible for a large and growing share of connections (for example, 36 percent in Japan and 31 percent in South Korea). While the United States lags behind South Korea and Japan, as a share of total households, almost three times as many homes in the United States can subscribe to fiber broadband as can homes in the European Union. Moreover, it appears that no other nation other than the United States is seeing high speed network deployment in moderate, as opposed to high-density areas, in part reflecting America’s uniquely suburban geography.

While the report finds that policies are important in determining nations’ broadband performance, it also finds that “environmental” factors play a role. For example, the fact that over 50 percent of South Koreans live in large, multi-tenant apartment buildings makes it easier for them to deploy high speed broadband than it is in the less densely populated United States.

Finally, the report argues that it is time to move the broadband policy debate beyond the free market fundamentalism on the right and the digital populism on the left and begin to craft pragmatic, realistic public policies that focus on the primary goal—getting as many American households using high-speed broadband networks to engage in all sorts of online activities, including education, health care, work, commerce, and interacting with their government. Toward that end the report proposes 11 policy recommendations to spur deployment and adoption of broadband.

Read a summary of the report (including links to the individual country reports).

Download the complete report.

Source: ITIF

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