UnderstandingInternational Broadband Comparisons

December 19, 2008

Scott Wallstenscott@wallsten.net

www.techpolicyinstitute.orgwww.wallsten.net

Per capita rankings of wired connections not meaningful:

•Wired connections are one to a household.

Correct normalization is connections per household, not per capita.

OECD rankings, in particular, problematic also because:

•Cannot measure business lines consistently across countries or over time.

Sources: European Community (2008); US Census (2007), Pew Internet & American Life Foundation (2008); National Internet Development Agency of Korea (2008); Impress/R&D Internet Media Research Institute (2007). See footnote 8 in Wallsten (2008).

April 2008

OECD (and FCC) can’t count business connections

Total

Total

Residential

Total

Residential

Business (implied)

U.S. Census: 81 million people have Internet at workNielsen: 95% of workers with Internet access have broadband

77 million U.S. workers have broadband at work

OECD/FCC miss about 72 million connections

66 million connections (OECD)72 million workplace

138 million U.S. wired broadband connections

Share of counted connections that are residential

Why is the U.S. OECD rank falling?

Household size.

Countries with larger households will have fewer connections per capita.

Hermitopiapopulation: 20

Grüphaus Republicpopulation: 20

Hermitopiapopulation: 20

Grüphaus Republicpopulation: 202001

Internet

Hermitopiapopulation: 20

Grüphaus Republicpopulation: 202008

Internet

Korea

Sweden

Canada

Denmark

Belgium

Netherlands

Austria

United States

Iceland

Japan

Korea

Sweden

Canada

Denmark

Belgium

Netherlands

Austria

United States

Iceland

Japan

When every household in every country has broadband,U.S. per capita rank will be very low

Sources: European Community (2008); US Census (2007), Pew Internet & American Life Foundation (2008); National Internet Development Agency of Korea (2008); Impress/R&D Internet Media Research Institute (2007). See footnote 8 in Wallsten (2008).

April 2008

What about wireless broadband?

(for one thing, per capita counts are OK!)

Source: FCC (2008)

cable

dsl

mobile

fibersatellite & fixed

Source: Nielsen Company (2008).

Note: Lots of countries (like Japan) not included this survey!

Key empirical unknowns about wireless/mobile broadband

•Elasticity of substitution between wired and wireless.

•Actual speeds.

•Latency.

Unique IP Addresses Per Capita

Advantages of this metric: Includes all devices connected to the Internet—wired, wireless, household, business, etc.

Disadvantage: Does the nature of IP addressing inflate U.S. numbers?

Source: Akamai, State of the Internet, Q3 2008.

Source: Akamai, State of the Internet, Q3 2008.

Unique “High Broadband” IP Addresses Per Capita

“High broadband” – connections with connections with at least 5 Mbps.

Speedsconsider actual, not advertised

Source: Speedtest.net.

Note: Korea measurement probably too low because Speedtest.net does not have a server there.

Source: Akamai, The State of the Internet, Q3 2008.

Speeds Observed by Akamai, Q3 2008

U.S. Data

Source: FCC (2008).

Source: U.S. Census, Current Population Survey 2007.

Ten fastest states as measured by Akamai

Source: Akamai, State of the Internet, Q3 2008.

Ten fastest states (download) as measured by Speedtest.net

Ten fastest states (download) as measured by Speedtest.netand their speeds measured by CWA (speedmatters)

Biggest speed improvements, Q2-Q3 2008

Source: Akamai, State of the Internet, Q3 2008.

Source: U.S. Census (2007).

Conclusions: A National Broadband Policy

1. IMPROVE DATA• Require the U.S. Census to continue gathering data as part of CPS.• Gather better data on business broadband (BEA?).• Mapping? If you really want to.

2. GOT BROADBAND PLANS?• Require cost-benefit analysis of any proposal.• Study existing programs.

0. NO CRISIS!• We can take the time to make good policy.

The Boring Recommendations

Conclusions: A National Broadband Policy

Inconvenient recommendations

2. IF YOU WANT TO INCREASE BROADBAND ADOPTION• Focus more on low-income people than on rural areas.

1. REMOVE ENTRY BARRIERS• Make more spectrum available.• Streamline rights-of-way.

3. IF YOU WANT TO INCREASE BROADBAND INVESTMENT• DO NOT subsidize all new investment.• Consider innovative approaches, such as West Virginia’s

“reverse auction.”

Conclusion

Relax. We’re OK.