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Study: Cable/telco competition brings North America slowest, costliest broadband

By Tim Conneally, Betanews

Today was the Federal Communications Commission’s deadline for public comment on the Berkman Center For Internet and Society’s recent study, which examines the growth of broadband Internet access in other countries, along with the factors that have made those markets overseas more competitive than in the US.

“International comparisons…have been a political hot button in the past few years. Because the United States began the first decade of this century with the fourth-highest levels of broadband penetration among OECD nations, and is closing the decade in 15th place in these same rankings, and because, according to International Telecommunications Union measures, the United States slipped from 11th to 17th between 2002 and 2007, many have used these data to argue that the United States, on its present policy trajectory, is in decline,” the study says.

“Others have responded by criticizing the quality of the data in various ways, asserting that the United States broadband market is performing well and there is no concern to be addressed,” it continues. “The debate occasionally resembles that of a horse race; indeed, a horse race in which those who have already placed their bets are arguing about how to decide which horse has won.”

To whom should the US look for inspiration? BCIS suggests Japan, South Korea, Sweden, and the Netherlands. Also, Germany and Portugal are especially noteworthy because of their high actual speeds compared to those advertised, despite the fact that “neither country has any fiber deployment to speak of.”

But the common thread among all the countries BCIS studied was that “open access” policies such as unbundling, bitstream access, collocation requirements, wholesaling, and other functional separation have been important to every high performing country…and the United States essentially abandoned these policies in 2001 and 2002. “Open access has been largely treaded as a closed issue in US Policy debates ever since,” the study said.

The study finds that the emphasis other countries have put on open access is backed up by empirical evidence.

“We find that in countries where an engaged regulator enforced open access obligations, competitors that entered using these open access facilities provided an important catalyst for the development of robust competition which, in most cases contributed to strong broadband performance across a range of metrics.”

The lowest prices and highest speeds are almost all offered by companies participating in a market with telephone, cable, and competitors who built their presence through open access facilities.

The highest priced and slowest services are “overwhelmingly offered by firms in the United States and Canada…markets structured around competition between one incumbent owning a telephone system, and one incumbent owning a cable system.”

Copyright Betanews, Inc. 2009

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