Regulatory Reform

U.S. Broadband Success: the Proof is in the Piping

Last week, the New York Times published an article quoting Professor Susan Crawford claiming that “monopolists who resist innovation” currently dominate the broadband space. That same day, the FCC released its Internet Access Service Report announcing that the total number of broadband connections hit 100 million—indicating that broadband providers are actually effectively managing America’s broadband affairs.

Competing information regarding the U.S. broadband market saturates today’s media as critics and proponents of the U.S. broadband system attempt to influence Americans’ perception of the market and, ultimately, the kind of role regulatory forces should play. While perception is a powerful thing, when it comes to the state of U.S. broadband, the proof is in piping:

The U.S. jumped from the 22nd fastest Internet in 2009 to the 8th fastest in 2012—certainly a difficult feat, but an impossible one if Susan Crawford’s assertion that the sector sees “very little” investment is correct. And, if 8th fastest worldwide Internet just isn’t fast enough, investment in new technologies promises a future of even greater speeds. In fact, in the past year alone, the number of U.S. households connected with fiber-to-the-home increased 20 percent, benefitting an additional 9.7 million Americans.

Aside from progress with respect to speed, the U.S. is also one of the global leaders in terms of the deployment and adoption of high-speed wired networks and ranks as the top OECD nation in the adoption of advanced wireless LTE broadband networks. Considering that less than half of all American homes relied on a wireline phone service at year-end 2012, the focus on wireless technologies places the U.S. broadband market well-equipped for a mobile transition.

The U.S. does comparatively lag in the category of broadband adoption, suffering from rates lower than about half of the OECD nations. However, unsatisfactory adoption rates are unrelated to broadband prices, for the U.S. maintains the second lowest broadband prices in the OECD. The Pew Research Center’s recent survey reveals that Americans are not adopting broadband because they do not find it relevant to them or they do not own a computer—two reasons that government regulation of the broadband market cannot influence.

Americans should have access to quality broadband service. Broadband access is not only important for individuals’ quality of life, but it is also an increasingly critical aspect of the American economy. Activity in the related broadband, media and information technology sectors adds nearly $900 billion annually to the American economy and provides an estimated 10 million U.S. jobs.

The broadband ecosystem is ever evolving, but it will remain important for policymakers to recognize the intense competition in the space, how this competition establishes quality, low-cost services for Americans, and to regulate the system accordingly. Whether loosening outdated restrictions on broadband providers or protecting IP-enabled voice services from undue regulation, policymakers at all levels of government should seek a light-touch regulatory approach, which will allow U.S. broadband providers to continue improving the system that serves as a foundation for 21st century economic growth.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth