http://online.wsj.com/article/SB10001424052748703652104574652501608376552.ht
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* REVIEW & OUTLOOK
* JANUARY 20, 2010
A 'National Broadband Plan'
One more solution in search of a problem.
The Federal Communications Commission recently told Congress that it will
miss a February deadline for delivering a "national broadband plan" and
requested a one-month extension. If it keeps missing deadlines, nearly
everyone in the U.S. might soon have high-speed Internet.
As part of last year's stimulus package, Congress asked the FCC for a plan
to ensure that everybody in the country has access to broadband. That's a
worthy goal, but the idea of a government plan is based on a false
presumption that the spread of broadband is stalled. The reality is that
broadband adoption continues apace, as does the quality and speed of
Internet connections.
Between 2000 and 2008, residential broadband subscribers grew to 80 million
from five million, according to a study by Bret Swanson of Entropy
Economics. Broadband penetration among active Internet users at home is 94%,
and nearly 99% of U.S. workers connect to the Internet with broadband. A
typical cable modem today is 10 times faster than a decade ago. Wireless
bandwidth growth per capita has been no less impressive, showing a 500-fold
increase since 2000.
Meanwhile, U.S. information and communications technology investment in 2008
alone totalled $455 billion, or 22% of all U.S. capital investment. Nominal
capital investment in telecom between 2000 and 2008 was more than $3.5
trillion.
Those who favor more government control of the Internet ignore this private
progress and point to international rankings. According to OECD estimates,
the U.S. ranks 15th in the world in broadband penetration per capita. But
because household sizes differ from country to country, and the U.S. has
relatively large households, the per capita figures can be misleading. A
better way to gauge wired broadband connections is per household, not per
person. By that measure the U.S. ranks somewhere between 8th and 10th.
Such comparisons will soon be moot in any case because broadband penetration
is growing rapidly in all OECD countries. The Technology Policy Institute
notes that "at the current rates of broadband adoption the U.S. is behind
the leaders only by a number of months, and all wealthy OECD countries will
reach a saturation point within the next few years."
Even the Obama Justice Department seems to reject the broadband market
failure thesis. "In any industry subject to significant technological
change, it is important that the evaluation of competition be
forward-looking rather than based on static definitions of products and
services," said the Antitrust Division in a January 4 filing to the FCC. "In
the case of broadband services, it's clear that the market is shifting
generally in the direction of faster speeds and additional mobility."
Justice concludes that while "enacting some form of regulation to prevent
certain providers from exercising monopoly control may be tempting . . .
care must be taken to avoid stifling the infrastructure investments needed
to expand broadband access."
No matter, the default position of the Obama Administration is that little
useful happens without government, so the FCC is busy planning. Chairman
Julius Genachowski is sympathetic to net neutrality regulations that would
prevent Internet service providers from using differentiated pricing to
manage Web traffic. Liberal interest groups like Public Knowledge and
Harvard's Berkman Center for the Internet and Society are urging the agency
to reinstitute "open access" mandates that would force cable operators and
phone companies to share their infrastructure with rivals at government-set
prices.
The irony is that the private investment and innovation of recent years have
occurred in the wake of the FCC rolling back similar rules that held back
telecom in the 1990s. Consumers continue to have access to more and more
broadband services, while Google, YouTube, iTunes, Facebook and Netflix
originated in the U.S.
Doesn't the Obama Administration have enough to do than mess with a part of
the U.S. economy that is working well?
Regards,
Jeff
Jeff Broadwick
Sales Manager, ImageStream
800-813-5123 x106 (US/Can)
+1 574-935-8484 x106 (Int'l)
+1 574-935-8488 (Fax)
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