ISPs: Broadband a ‘Great American Success Story’

The United States does not have the highest broadband penetration rate or the highest speeds in the world, but telecom and cable execs still think that Americans have a lot to be proud of.

Speaking at the Supercomm conference in Chicago, Cox Communications President Patrick Esser challenged the audience to imagine their lives without broadband and everything it enables. In his view, broadband adoption has changed the lives of millions of Americans.

“Broadband is a great American success story, don’t let anyone tell anyone tell you anything different,” Esser said. “By the end of this year, approximately 95 percent of U.S. households will have access to broadband. This still-developing marketplace has revolutionized the communications landscape forever and it did in just over a decade.”

Esser added that over the last decade the cable industry alone as invested more than $145 billion into network infrastructure to help further the promise of broadband.

Yet even with the investments made to date and his own company’s extensive broadband footprint, Esser said that more needs to be done to ensure that schools and under-privileged families also get access.

According to Esser, no one company or government agency can achieve the goal of expanding broadband to all Americans. In his view it will require a public-private partnership with a shared vision and a detailed roadmap.

“Broadband is already a great value and we can make it better, but we have to help our youth to invent the future,” Esser said.

John Stankey, president and CEO of AT&T Operations, shares Esser’s rosy view of the industry, particularly in the area of keeping service affordable.

“In the United States, I think we’ve done a good job on this score,” Stankey said in his Supercomm keynote. “As a percent of per capita GDP, we spend less in the U.S. on broadband than other developed countries. The value for broadband in this country from an end-user perspective is superior.”

Cable and telecom providers have devoted considerable attention recently to defending the vibrancy of their industry against critics who would doubtless rebut the points Esser and Stankey advanced at Supercomm.

For instance, while critics often talk of the telecom sector as a “quasi-monopoly,” Stankey argued that competition and varying price points for different levels of service and speed are delivering a solid value to U.S. broadband subscribers. The same is true for wireless.

“On wireless, we get the lowest amount of revenue per minute in the U.S.,” Stankey said. “Guess what? We happen to be heavier users, so it’s not a surprise that average bills might be a little bit higher since people get more value out it so they use it more. Is that a bad thing? Probably not.”

AT&T’s own financial results have shown a rapid increase in the number of wireless subscribers. For its third quarter, AT&T reported record subscriber gains, signing up 2 million new wireless customers.

While there are many positives about U.S. broadband growth and adoption, Stankey commented that there are some hurdles to overcome. One particular area Stankey pointed out is the regulatory landscape which he said has made it difficult for AT&T to deploy its network equipment anywhere it wants.

“I have more problems solving coverage issues in a wireless network due to extensive permitting problems to build antennas than I do in actually choosing to spend money to put the equipment out,” Stankey said.

He put in a plug for a light-touch regulatory policy to further investment and competition in the telecom sector, echoing an oft-heard refrain from AT&T and other ISPs as the Federal Communications Commission has been moving toward closer scrutiny of the industry.

“At a time when this economy has been on its back, when companies have been cutting back, where does investment remained strong? It has been telecommunications,” Stankey said. “We’re investing at the equal pace as we were before we started dealing with problems last year, we’re stepping up investment right now.”

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