Broadband in the US - myths and facts

Summary

Broadband in the US - myths and facts

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The United States (US) approach to broadband policy has been much maligned, both at home and abroad.1 Critics base their case on its low rankings in the Organisation for Economic Co-operation and Development (OECD) statistics on broadband penetration, on the relative paucity of resale-based competition, and on comparisons to countries like
Japan and South Korea, which moved more quickly than the US to deploy fibre infrastructures. Broadband in the US, they argue, is less advanced, less competitive, and less widely utilised than in other advanced countries, a clear indication that its relatively deregulatory policy approach has failed.

The case against the US broadband policy is widely accepted. In some circles, it may even represent a consensus. But there is a problem: the brief against US broadband policy is, at its core, fundamentally incorrect. This paper compares US and (briefly) Canadian broadband policies and outcomes, with the policies and outcomes in other advanced nations. The results show that the relatively deregulatory American approach to broadband policy has produced highly desirable results, including high levels of investment and innovation, nearly ubiquitous broadband availability, high and increasing levels of penetration, falling prices, and high levels of consumer satisfaction. Indeed, the US model is producing better overall results than in countries which continue to pursue mandatory unbundling and other highly regulatory approaches. Moreover, the advantages of the American model are likely to grow more pronounced over time. To avoid being left behind, other nations should abandon policies based on mandatory resale of incumbent networks and adopt the American approach.

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Jeffrey
Eisenach

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