U.S. broadband is not falling behind

Published December 6, 2011

Those worried the USA is falling behind the world in broadband speed and adoption can pick another subject to fret about. America is doing fine — and would do even better if government would stop trying to micromanage the digital economy.

 The idea that European and Asian countries are lapping America in the race for broadband speed and penetration is a fallacy created with statistics comparing “persons” instead of “households.” Once you make that correction, the USA is firmly planted among the top of industrialized nations, as economist Scott Wallsten pointed out when he was a staffer at the Federal Communications Commission in 2009.

And as tech researcher Bret Swanson of Entropy Economics points out, if you measure Internet usage by gigabytes used per month — a better measure of the speed and utility of networks — the USA has nearly lapped Western Europe once and Asia twice.

This is happening because telecommunications firms, not government, have invested hundreds of billions of dollars in wireless 4G LTE technology in just the past few years. According to a Progressive Policy Institute study released in May, AT&T and Verizon invested $36 billion in 2010 alone — more than the combined capital investments of Wal-Mart, ExxonMobil and Chevron.

This staggering level of private-sector investment is the calling card of a highly competitive telecom market — and why the FCC could report this year that 90% of Americans have a choice of five or more carriers for wireless broadband. Consumers would have even more and better choices if government regulators would simply get out of the way.

A 2011 report from the telecom research firm Yankee Group estimates consumer demand for wireless broadband will increase sixtyfold by 2015. Yet the FCC continues to slow-walk an auction for the spectrum wireless broadband companies need — but which is still held unused by television broadcasters and government agencies.

The digital economy — one of the only vibrant economic sectors left — doesn’t need more government “investment” or regulation. It needs only for government to butt out and let the market work the magic that continues to bring us the marvels of the modern age.

Jim Lakely is the communications director and co-director of the Center on the Digital Economy at The Heartland Institute, a free-market think tank based in Chicago.