U.S. Broadband Adoption Rank Triggers Debate

The Paris-based Organization for Economic Cooperation and Development (OECD) in April released new statistics on broadband penetration. The figures put the United States at 15th among OECD countries as of year-end 2006, down from 13th a year earlier. The U.S. reportedly ranked 12th in mid-year 2006.

The ranking is determined by the number of subscribers to digital subscriber line (DSL), cable, fiber, and other high-speed connections (satellite, fixed wireless, and power line) per 100 population.

According to the OECD, the number of U.S. broadband subscribers per 100 population has risen steadily during the new millennium: 4.5, 6.9, 9.7, 12.9, 16.3, and 19.6 in 2001, 2002, 2003, 2004, 2005, and 2006, respectively.

With some 58.1 million broadband subscribers, the United States had more than any OECD country, representing 29 percent of all broadband connections within the OECD. (See table.)

Subscriber Increase

The total number of broadband subscribers in the OECD nations increased 26 percent, from 157 million in December 2005 to 197 million in December 2006. Overall broadband penetration rates increased from 13.5 to 16.9 per 100 population.

Denmark and the Netherlands were singled out in the new report as the first two OECD countries to surpass 30 subscribers per 100 population. Denmark, the Netherlands, New Zealand, and Ireland were noted for having the strongest per-capita subscriber growth, and Korea and Japan were highlighted as having aggressive broadband fiber programs.

DSL continues to be the leading platform in 28 OECD countries at 62 percent of the total, according to the OECD, but cable modem subscribers outnumber those with DSL in Canada and the United States.

‘Grossly Inadequate, Highly Misleading’

Experts note the OECD data are incomplete and may be inaccurate.

The figures don’t include Internet connections used by U.S. business enterprises, for example, nor the WiFi networks deployed by elementary and high schools, colleges and universities, and other institutions. Len Kruger of the Congressional Research Service has said some European countries, by contrast, include Internet connections used by businesses.

The OECD figures are based purely on what member governments collect and report, and the governments themselves often rely solely on whatever subscriber information national carriers choose to provide. Researchers and analysts know these numbers can be late, lacking, and flawed.

In addition, vast geographic, demographic, population density, economic, and per-capita income differences affect comparisons among countries.

“The OECD broadband rankings are most often employed in a manner that presents a grossly inadequate and highly misleading yardstick of our broadband infrastructure and the problems with it,” said George S. Ford, chief economist of the Phoenix Center for Advanced Legal and Economic Public Policy Studies.

Much Access Ignored

Around the time of the OECD release, David Gross, U.S. Coordinator for International Communications and Information Policy, wrote a letter to the OECD claiming its broadband statistical reports rely too heavily on counting mere subscriptions as a measure of broadband use–ignoring, for example, campus-wide broadband access, public wireless hotspots, and corporate-purchased high-capacity special access facilities that are uncounted as “subscriptions” in the OECD reports.

“The plain fact of the matter is that the U.S. has more broadband subscribers–64 million as of June 2006–than any country in the world,” said Randolph May, president of the Free State Foundation. “And the most recent Federal Communications Commission (FCC) report encouragingly showed that the largest increase in the number of broadband subscribers occurred in the wireless segment.”

Political Football

Political hand-wringing and corporate second-guessing are likely to continue to be the most immediate fallout effects of the new estimates.

At the FCC and on Capitol Hill, the OECD figures have become a political football. FCC Commissioner Michael Copps, a Democrat, called the purported U.S. slide a “national embarrassment” and reiterated a call for a “national strategy” to ensure the country manages broadband access deployment.

“Every year brings more bad news as the United States slides further down the broadband rankings,” Copps said in a prepared statement. “These rankings aren’t a beauty contest–they’re about our competitiveness as a country and creating economic opportunity for all our people.”

Kyle McSlarrow, CEO of the National Cable & Telecommunications Association, told U.S. lawmakers in an April letter that the OECD rankings mask a success story in the U.S. broadband industry–namely, that the U.S. leads the world with 58.1 million broadband subscribers.

Senate and House committees held hearings in April on the nation’s broadband status. Besides the declining rankings, political figures from both major parties have bemoaned that in some Asian and European countries, households might have high-speed connections 20 times faster than those in the U.S., and at half the cost.

Other observers claim a “digital divide” in broadband, especially in rural telecommunications. Here government policy and financial incentives are major factors, including the role of the universal service fund and a range of loans, loan guarantees, and grant programs.

Frank Barbetta ([email protected]) writes from Little Falls, New Jersey.

For more information …

OECD data on broadband penetration, http://www.oecd.org/sti/ict/broadband.