Federal Communications Commission chair Kevin Martin penned a bit of commentary in the Financial Times this morning, telling us all how great the state is of high-speed Internet access here in the United States. Truth be told, it’s not in terrible shape, but Martin ignores some rather serious deficiencies.
The FCC chief kicks off his piece by noting that the United States is “closing in on President George W. Bush’s goal of providing broadband access to every U.S. household. With 42.9m subscribers, the U.S. has more people connected to broadband than any other country, and the … number of broadband subscribers continues to grow rapidly … more than 85 per cent of the country has access to cable, DSL or both.”
Sounds great, right? A closer look at the numbers, however, suggests that Martin is painting over some ugly truths.
The fact is, between 2000 to 2003 the United States actually fell from 4th to 13th place in global rankings of broadband Internet usage per capita. Currently, the majority of American households can access only a broadband service that is “among the slowest, most expensive, and least reliable in the developed world,” as Thomas Bleha wrote in the May/June 2005 issue of Foreign Affairs. What’s worse, despite all the high-minded rhetoric coming from Martin and the Bush administration, the United States still has no national initiative to upgrade Internet service to bring it up to the level of most other developed nations.
While President Clinton supported the commercialization of Internet access and increased competition among providers by proposing the National Infrastructure Initiative and pushing for the passage of the Telecommunications Act of 1996, the Bush administration hasn’t given broadband policy the same level of attention. Bleha notes, “In the administration’s first three years, President George W. Bush mentioned broadband just twice and only in passing. The Federal Communications Commission (FCC) showed little interest in opening home telephone lines to outside competitors to drive down broadband prices and increase demand.”
Meanwhile, other countries, particularly in Asia, are storming ahead. The Japanese government, for example, has been proactive in removing regulatory obstacles and coaxing its regional telephone companies to allow outside competitors access to their residential telephone lines. The result has been a boom in competition and innovation, with high-speed service five times faster than what is widely available in the United States.
Martin’s op-ed gives a cursory nod to these discrepancies, but avoids delving into the reasons the United States is falling so far behind, lamely suggesting that it’s more difficult for the United States to offer cheap, widespread broadband access due to the “geographic and demographic diversity of our nation.”
How much has the lack of focus by the FCC cost American business? According to Bleha’s article, a 2001 study conducted by an economist at the Brookings Institution and a telecommunications consultant, “estimated that ‘widespread’ adoption of basic broadband in the United States could add $500 billion to the U.S. economy and produce 1.2 million new jobs.” In 2004, another Brookings economist stated that “as much as $1 trillion might be lost over the next decade due to present constraints on broadband development.”
It isn’t all Martin’s fault. He’s saddled with the decisions his predecessor Michael Powell made before stepping down last year. While Powell talked a good game about digital cable and broadband, in the end he essentially caved to the desires of regional telephone companies, who lobbied hard to overturn regulations forcing them to open their residential telephone infrastructure to competitors.
That is the real state of domestic broadband and high-speed Internet service. Regulators have made a decision to allow local telephone monopolies to impede competition; as a result, while more Americans are signing up for high-speed access, they’re not getting anything close to what they could be getting.
And it’s going to take more than spin for American broadband to catch up with the rest of the world.