Monday, April 30, 2007

Lies, Damn Lies and Broadband Statistics

For the better part of a decade, the United States lagged in broadband development largely because stakeholders invested in long haul capacity and failed local loop alternatives. Incumbent telephone company managers have emphasized regulatory uncertainty and “confiscatory” FCC sharing requirements, but the fact of the matter is that over $1 trillion was invested in the dotcom boom, a significant portion of which targeted burgeoning demand for local and long haul bandwidth.

Now that regulatory uncertainty provides no explanation for the United State’s comparatively poor performance in broadband market penetration the federal government has started to shoot the messenger reporting continuing poor penetration rates. Both the National Telecommunications and Information Administration and the State Department are challenging the statistics compiled by the Organization for Economic Cooperation and Development that ranks the U.S. 15th globally in broadband subscribers per 100 inhabitants (down from 12th last year). See
http://www.oecd.org/document/7/0,2340,en_2649_34223_38446855_1_1_1_1,00.html.

The State Department has made the issue something of a diplomatic affront to the U.S. See http://www.ntia.doc.gov/ntiahome/press/2007/State_OECD_042407.pdf NTIA offers explanations why scope of broadband access in places such as government offices and coffee shops means that the OECD ranking underestimates market penetration. See http://www.ntia.doc.gov/ntiahome/press/2007/ICTleader_042407.html.

So first stakeholders could blame the government for mandating common carriage facilities unbundling and interconnection. Now the government can blame outside data collectors as underestimating the kind of success the FCC found when it used zip codes as the relevant market penetration metric.

I am confident U.S. broadband penetration statistics will improve, but the initial “success” will occur in urban areas with greater likelihood for more than two facilities-based carriers offering true broadband at rates below $60 a month.

I fear the Digital Divide increasingly with cleve between cities and the hinterland.

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