Updated Aug. 25, 2014 at 7:00 a.m.

Study: America leading in broadband economic costs, activity

Published: 2014-08-25 05:56:00
Updated: 2014-08-25 07:00:42


(Editor's note: The Broadband Report is a regular feature in WRAL TechWire.)

WASHINGTON, D.C. – How true are fears that the United States is falling behind the rest of the world when it comes to broadband?

In a new study “Innovation, Investment, and Competition in Broadband and the Impact on America’s Digital Economy” for the Mercatus Center at George Mason University, Roslyn Layton and Michael Horney survey broadband in America and compare broadband costs around the world. They find that the United States is a global leader in broadband, as measured by the level of broadband-enabled economic activity, the number of Internet-based companies, the level of digital exports, and the level of Internet-enabled employment.

When price comparisons are adjusted for taxes, network quality and consumption of data, Americans enjoy lower unit costs for connectivity, according to the study. Americans typically pay a monthly fee to their cable or mobile company for the use of broadband. Additionally, much of the content on TV and the radio have historically been considered “free” because it has been paid for by advertisers rather than by consumers.

America’s broadband market is characterized by a high level of innovation in networks, services and technologies.

“The United States’ growing digital economy is the result of the vast majority of Americans having broadband access and using it to produce and consume a range of goods and services,” the researchers wrote. “A fixation on broadband speeds would harm policies that promote greater adoption and investment as well as more competition.”

The amount of Internet traffic the United States consumes increases significantly every year and is on track to surpass South Korea as the nation that consumes the most data per capita.

The Organisation for Economic Co-operation and Development (OECD) defines broadband as connections with a minimum speed of 256 kilobits per second (Kbps) download. The FCC defines broadband at 4 megabits per second (Mbps) download. This speed threshold defined by the FCC currently can deliver most Internet applications.

Americans use a variety of network solutions to meet their preferences. Each broadband technology has advantages for a given set of users. Some critics of U.S. broadband policies argue that America’s speeds lag behind those of other countries, thereby harming innovation.

“… If speeds were all that mattered, then the Internet should be dominated by firms from South Korea, Japan, and Hong Kong. Instead, Internet giants like Google, Amazon, and Facebook come from the United States,” the study states.

The current policy debate primarily revolves around whether broadband should be regulated as a utility. During the past decade, many EU countries have applied aggressive utility-style regulation to broadband which some feel has hurt more than helped.

America’s broadband networks have allowed the United States to become a leading digital economy. Over the past decade, the United States has consistently made up around a quarter of the world’s broadband investment, which has grown globally from $130 billion in 2003 to $330 billion in 2013. U.S. companies continue to invest in technologies like mobile and Wi-Fi, making them cheaper and more broadly available for consumers, while there is a growing gap between the United States and the EU in per capita spending on infrastructure.

Maybe Americans don’t have it so bad after all.

WRAL TechWire any time: Twitter, Facebook

Copyright 2014 WRAL TechWire. All rights reserved.
Editor's Blog

Editor's Blog

The latest blog posts from our WRAL TechWire and WRAL editors. Read more articles…

page 1
sort order: oldest first | newest first
The Mercatus Center was founded and is funded by the Koch Family Foundations. According to financial records, the Koch family has contributed more than thirty million dollars to George Mason, much of which has gone to the Mercatus Center, a nonprofit organization. Democratic strategist Rob Stein described the Mercatus Center as "ground zero for deregulation policy in Washington.”

Mercatus also has ties to the American Legislative Exchange Council (ALEC), a corporate-funded think tank that counts among its premiere members AT&T, Time Warner Cable, Comcast, and Verizon.

The only thing that would have surprised me about this report was if they actually wrote there WAS a broadband problem in this country. That would contrary to the established line Big Telecom companies want to reinforce, so they use third-party think tanks to deliver questionable research.
page 1
sort order: oldest first | newest first

Please Log In to add a comment.

Best of TechWire Insider

Techwire Inside Partners

OUR INSIDERS

Dr. Mike Walden
Tech economy
Frank Vinluan
Life science
Vivek Wadhwa
Commentary
Scroll