Impact of OECD Plan to Measure Mobile Data Connections Said Unclear
The Organisation for Economic Co-operation and Development will propose a new indicator for measuring mobile wireless broadband connections, an economist for the group said Wednesday. If approved by member countries, there will be separate indicators for wireless and wired broadband connectivity, economist Taylor Reynolds said. The group’s broadband rankings, which typically rank the U.S. in the teens, have been controversial.
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Better measurements are needed, but the proposal will stir up another hornet’s nest over rankings that make no sense in the first place, said George Ford, chief economist of the Phoenix Center, a legal and economic policy think tank. Whether the new yardstick will raise the U.S. ranking is unclear, said Free Press Research Director Derek Turner.
The OECD’s figures have included only DSL, cable, fiber and wireless Internet connections with download speeds of at least 256 kbps, Reynolds told us. When 3G technology rolled out, its speeds were below 256 kbps, so the connections weren’t counted, he said. Now that mobile speeds are higher and appear to qualify as broadband, the group will ask its working parties next month to review a proposed separate indicator for wireless broadband connectivity, Reynolds said. The method must be approved by member nations, he said.
The number of reported connections will rise significantly under the new indicator, but their distribution will be unclear, Phoenix’s Ford said in an interview. Unlike fixed Internet connections, wireless connections aren’t usually shared among users, he said. OECD’s proposal to put all wireless connections in one group and all fixed in another is incorrect because fixed wireless connections are shared, he said.
The OECD doesn’t currently count mobile wireless data connections, “and for good reason,” Turner said. The connections are often slow, rarely exceeding 1 Mbps on the downstream and often below 200 kbps on the upstream, he said. And a wireless-connection customers almost always uses it in addition to a fixed broadband line, he said.
It’s difficult enough to measure fixed-line connectivity because of sharing in homes, demographics such as age and income, and other considerations, Ford said. Adding mobile connections will make the problem almost impossible, he said. Besides, OECD numbers appear to be used more for political purposes than for measurement, he said. The real problem isn’t counting connections and getting better data, it’s the “incompetence with which [the information] is used,” Ford said. The OECD rankings are not an indication of progress, he said. Each country should set its own target for broadband adoption, weighing the value of the services against the cost of getting them deployed, and then measure its progress annually, Ford said. If that approach hurts its OECD rating, “so what?” he added.
Whether counting mobile wireless lines will affect the broadband penetration ranking of the U.S. depends how much businesses and homes in each OECD country use the data services, Turner said. That use seems strong in Asian and most western EU countries, and the overall result is unclear, he said. The OECD should report the information with and without the mobile connections anyway, to keep it comparable with previous reports and to reflect the limitations of mobile connections, he said.
The data will remain a bellwether, but “only because they are essentially the only game in town that is published regularly,” Turner told us. The FCC is now legally required to make an international comparison regularly, he said. Once that starts, it will “have far more impact here in the states than the OECD or ITU data,” he said.
U.S. Ranking Unchanged
The December 2008 OECD broadband statistics published Wednesday show the U.S. still in 15th place in broadband penetration and first in total broadband subscribers. The number of broadband subscribers in the OECD reached 267 million in December 2008, and subscriptions rose 13 percent last year, the survey found. The economic crisis hasn’t slowed adoption, it said. Strongest per-capita growth over the year was in the Slovak Republic, Greece, Norway, New Zealand, Germany, France and the U.S., and Denmark, the Netherlands, Norway, Switzerland, Iceland, Sweden, Korea and Finland maintained their lead in broadband penetration, it said.
Besides penetration, the study looked at usage, coverage and geography, prices, and services and speeds. Twelve countries had surveyed offers of 50 Mbps or more, the OECD said. The average advertised speed for DSL was 9.6 Mbps, for cable 14.9 Mbps and for fiber 65.3 Mbps. Japanese providers, however, now offer cable broadband speeds of 160 Mbps, 10 times the U.S.’s top advertised speed, Reynolds said.
In addition, 36 percent of observed broadband plans had explicit data limits -- bit caps, Reynolds said. The average data transfer allowance was 27 gigabytes of traffic a month, he said. U.S. operators such as Comcast are starting to introduce caps, but they're so generous -- 10 times the OECD average -- that any annoyance over them may be misplaced, Reynolds said.
Other findings were that entry-level pricing plans were available for $34 or less in every OECD country in September 2008, and that on average, subscribers in OECD members pay 15 times more per advertised megabit of connectivity than South Koreans.