U.S. Broadband Not So Bad?

All is not as gloomy as the forecast often is about U.S. broadband adoption rates, according to a new report released today by the Phoenix Center.

The Washington think tank’s new Broadband Performance Index (BPI) shows the U.S. is
“performing where one would expect.” The U.S. has a BPI of essentially
zero, indicating its broadband subscription rate is equal to expectations
considering economic and demographic conditions.

The Phoenix Center’s numbers paint a very different picture than the ones
issued by the Organization of Economic Co-operation and Development (OECD),
which currently ranks the U.S. 15th on global broadband penetration rates.

“The OECD numbers are done on a per-capita basis,” Lawrence J. Spiwak, a
co-author of the report, told internetnews.com. “The problem is that
those numbers are a very inaccurate way to measure the numbers.”

Spiwak said the U.S. is “pretty much where we ought to be. We’re not in the
broadband ditch.”

analyzes economic and demographic factors that affect broadband subscriptions,
including GDP, income inequality, population age, telephone penetration,
business size, household size, broadband price, education level and population

According to Spiwak, those factors explain 86 percent of the differences in
broadband subscription rates across the OECD. The BPI takes the factors into
account to demonstrate whether broadband adoption in OECD countries is
meeting, exceeding or failing to meet expectations.

“The United States is performing where one would expect, given the demographic
and economic factors that are relevant to broadband demand and supply,” said

The BPI indicates Denmark, Norway and Sweden, which rank high in the OECD
rankings, are actually underperforming given their favorable economic and
demographic factors. The study also shows Portugal and Turkey, which rank well
behind the U.S. in the OECD figures, actually are outperforming what their
demographics would otherwise predict.

Like the U.S., Japan and Korea have BPI scores close to zero, indicating that
broadband adoption in those countries is roughly the same as their economic
and demographic conditions would predict.

“For broadband services, demography is not destiny, but policymakers do need
to understand the role it plays in identifying countries where broadband
policy may be succeeding or failing,” Thomas M. Koutsky, the Phoenix Center’s
resident scholar and study co-author, said in a statement.

Koutsky urged U.S. lawmakers considering ways to improve the country’s
broadband penetration rate should resist “rank envy” and move toward a “useful
discussion” of what policies will actually increase broadband adoption in the

The study considers only broadband subscription rates and does not assess the
quality and extent of broadband network deployment, which are also important
public policy concerns.

George S. Ford, chief economist at the Phoenix Center and another co-author of
the report, added in a statement, “We show that many factors independent of
traditional telecom policy, like income, education and population density,
play an important role in the rate of broadband adoption.”

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