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American exception: telecommunications policy

During 2007-2008, The New York Times ran a terrific series of articles by Adam Liptak about legal stances that the US takes alone:  convicting juveniles as adults and sentencing them to life, making accomplices as liable as the killer for murders committed during felonies, allowing bail bondsmen to do business, having less than 5 percent of the world’s population but almost a quarter of its prisoners, electing judges, hiring partisan expert witnesses..

Today’s release of the Berkman Center’s thoughtful and exhaustive report, Next Generation Connectivity: A review of broadband Internet transition and policy from around the world, adds high-speed Internet access policy to the list of American exceptions.

Some of the report’s highlights:

  • Across many sets of rankings published by a variety of actors, the US is a weak performer on prices for high-speed access.  Prices in this country are high and speeds are relatively slow.  US performance has declined relative to other countries.
  • There is a very broad consensus in developed countries outside the US that open access policies requiring shared infrastructure are both necessary (to competition, ubiquity, lower prices, higher speeds) and work.  These policies prompt competition by lowering barriers to entry, thus enabling lower prices and higher speeds.
  • Greater fiber penetration is a goal of many countries, because of its vastly higher capacity and upgradeability.
  • High-speed Internet access is related to economic growth.
  • Incumbents all over the world always complain about open access, but professional, persistent regulators succeed.
  • There are many different ways to implement open access.
  • The theory that unbundling deters investment is not proven by either empirical or theoretical literature.  Nor have the theories that attempt to explain why unbundling works been proven.  But countries that have effectively pursued open access have done better than the US has over the last few years – so it’s very valuable to compare the case studies in those countries to our situation.

This report is an enormous contribution.  It shows that the US has much to learn from the rest of the world.

8 Comments

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  1. Fred Goodwin says:

    “This report is an enormous contribution. It shows that the US has much to learn from the rest of the world.”

    Really? What it tells me is that it is easier to wire smaller more densely populated countries than larger ones. Australia is about as bad as the US, and while Canada apparently does better, I suspect their deployment is limited to the southernmost densely populated areas.

    Where are the results for India, China, Russia & Brazil?

  2. Susan,

    As another data point, consider the fact France Telecom is leading all service providers (wired and wireless) on Earth toward high definition voice. The momentum toward transitioning telecom networks toward HD breaks a decade long failure to improve voice quality.

    Voice communication remains baked in as an input to the global economy, so improving voice quality (HD doubles the sound carrying capacity) impacts economic development in precisely the same manner as broadband.

    We just finished a HD summit hosted by France Telecom in Paris. See http://www.hdcomms.com . The energy behind a transition to HD arises primarily from vendors. France Telecom (aka Orange) represents an exception and the fact of a regulatory framework that places a high value on enabling competition seems the reason.

    Daniel Berninger
    dan@danielberninger.com

  3. admin says: (Author)

    Fred – For the 30 nations of the OECD, population density is not significantly correlated with broadband penetration – I have a feeling that it is the US poverty numbers that hold us back, as well as policy.

    Dan – thanks, that’s quite something.

  4. The US has been falling behind on fixed for a long time, approximately the Triennial Review (unsurprisingly) – though countries such as the UK would give much for your problems. Given the 90% cable coverage, its astonishing how far the US is behind comparable countries – a gift horse that policymakers have been staring in the face for a long time now.
    BTW ignore Iceland and Australia on population density – they are astonishingly urbanised clustered nations (France is a better comparison and its leaping ahead from a standstill in about 2002).
    US wireless, on the other hand, is actually quite progressive if you ignore East Asia. Compared to Europe it has significantly better 3G coverage, no continental roaming (though US-Canada roaming issues are ridiculous!), and decent mobile broadband penetration. But that reflects Europe’s insane compartmentalism and calling party pays model.

  5. Chris Witteman says:

    Berkman reminds us of separation models in other countries, notably the U.K. At the same time, we shouldn’t forget the Nixon administration’s attempt to separate cable network ownership from program production. See Cable: Report to the President, 1974 (sometimes called the “Whitehead Report”). It has been posted on the web at http://www.eric.ed.gov/ERICDocs/data/ericdocs2sql/content_storage_01/0000019b/80/37/1c/5a.pdf .

    One of the ironies of history is that the first recommendation of the Nixon White House in 1974 was that “control of cable distribution facilities should be separated from control of programming and other services provided over the channels on those distribution facilities.” Id. at 29.

    >>We recommend adoption of a policy that would separate the ownership and control of cable distribution facilities, or the means of communcations, from ownership and control of the programming or other information services carried on the cable channels. By separating the distribution function in cable, which is a natural monopoly, from the programming functions, which can be highly competitive, the dangers of governmental intrusion and influence in programming can be avoided while the wide variety of competitors vying for the public’s attention can be expected to produce a diversity of programming.
    This policy would create an essentially neutral distribution medium, and require control of the medium to be separated from control of the messages on it. The effects of private economic power on the means of distribution would cesase to be a danger to the free flow of information, and there would be little need for the continued application, or threatened application, of Government power.<< Id. at 20.

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