Understanding International Broadband Comparisons

!!!!!!!!!

Understanding International Broadband ComparisonsScott WallstenMay, 2008

!!!!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

!!!!!

"#$#!%&''()*+,'-,!,+&'.&!'/!

!

(.-0&!123!

!

!/,(4-'506'7!89:9!;333<

!

%46'&=!;3;91;19$$32!

!

!&>?,-*=!@ABCDEFGHICJ@GK@ALE@EMEF9CNO!

!

/&P(-0&=!QQQ9EFGHICJ@GK@ALE@EMEF9CNO

!

Understanding International Broadband Comparisons

Scott Wallsten

*

May, 2008

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

*

Vice president for research and senior fellow, Technology Policy Institute. I thank Dave Burstein, RobertCrandall, Robert Hahn, and Thomas Lenard for helpful comments, and Stephanie Hausladen for excellent researchassistance. I have sole responsibility for any mistakes, and the opinions expressed here are my own and notnecessarily those of any organizations with which I am affiliated.

!"!

Table of Contents

EXECUTIVE SUMMARY................................................................................................................................................3

INTRODUCTION...............................................................................................................................................................5

BROADBAND PENETRATION......................................................................................................................................6

S

EPARATING

B

USINESS FROM

R

ESIDENTIAL

C

ONNECTIONS

...........................................................................................6

70 M

ILLION

U

NCOUNTED

C

ONNECTIONS IN

W

ORKPLACES IN THE

U.S.........................................................................8

H

OUSEHOLD

B

ROADBAND

P

ENETRATION

: U.S. P

ROBABLY

R

ANKS

A

BOUT

9

TH

...........................................................9

C

ONSUMERS

H

AVE

D

IFFERENT

T

ASTES FOR

I

NTERNET

A

CCESS

.................................................................................12

E

STIMATING THE

R

ESIDENTIAL

-B

USINESS

M

IX IN THE

OECD C

OUNTS

....................................................................13

THE DECLINING U.S. PENETRATION RANK: A STATISTICAL ANOMALY............................................17

R

ANKINGS OF

C

OUNTRIES WITH

L

ARGER

H

OUSEHOLDS

W

ILL

S

INK

O

VER

T

IME

......................................................17

C

HANGES IN

D

ATA

C

OLLECTION

M

ETHODS

A

FFECT

R

ANK

........................................................................................19

H

OUSEHOLD

S

IZE AND

C

OUNTING

M

ETHODS

E

XPLAIN

N

EARLY

A

LL OF THE

C

HANGE IN

R

ANK

.............................21

BROADBAND SPEEDS..................................................................................................................................................23

A

CTUAL

S

PEEDS

A

ROUND THE

W

ORLD

: E

VIDENCE FROM

S

PEEDTEST

.

NET

...............................................................24

A

DVERTISED

, O

BSERVED

,

AND

C

ONSUMER

S

ATISFACTION WITH

S

PEEDS

.................................................................25

S

PEEDS IN THE

U

NITED

S

TATES

.....................................................................................................................................29

Q

UESTIONABLE

D

EMAND FOR

M

ORE

B

ANDWIDTH

: E

VEN

K

OREANS

C

HOOSE

S

LOWEST

P

LAN

................................31

DEFINING A “NATIONAL BROADBAND POLICY”............................................................................................32

U.S. A

T OR

N

EAR THE

T

OP OF

S

EVERAL

ICT I

NDICATORS

.........................................................................................33

S

TUDY

E

XISTING

P

OLICIES TO

L

EARN

W

HICH

O

NES

W

ORK AND ARE

C

OST

-E

FFECTIVE

...........................................37

F

OCUS

B

ROAD

P

OLICIES ON

L

OW

-I

NCOME

P

EOPLE

, N

OT ON

R

URAL

A

REAS

.............................................................39

T

ARGET

R

URAL

S

UBSIDIES

C

AREFULLY

: W

EST

V

IRGINIA

’

S

N

EW

L

EGISLATION

.......................................................41

M

AKE

M

ORE

S

PECTRUM

A

VAILABLE

...........................................................................................................................42

M

EASURE

B

USINESS

B

ROADBAND

................................................................................................................................43

CONCLUSIONS...............................................................................................................................................................44

APPENDIX 1: WIRELESS BROADBAND.................................................................................................................45

W

IRELESS

I

NTERNET

A

CCESS

G

ROWING

Q

UICKLY

......................................................................................................45

H

OUSEHOLD

B

ROADBAND

R

EPORTED IN

E

UROSTAT

I

NCLUDES

W

IRELESS

................................................................47

APPENDIX 2: EVALUATING CRITIQUES OF HOUSEHOLD DATA..............................................................49

D

IVIDING

OECD “T

OTAL

” B

Y

N

UMBER OF

H

OUSEHOLDS IS NOT

V

ALID

..................................................................49

S

OME

S

URVEYS

I

NCLUDE

W

IRELESS AND

B

USINESS

C

ONNECTIONS

, S

OME

D

ON

’

T

..................................................49

N

EARLY

A

NY

B

ROADBAND

C

OUNT

W

ILL

F

ACE THE

OECD’

S

R

ESIDENTIAL

-B

USINESS

P

ROBLEM

..........................50

REFERENCES.................................................................................................................................................................53