McDowell Says Broadband Plan Should Consider Good With Bad

McDowell said he has already discussed the FCC’s broadband plan with Chairman Julius Genachowski. But it’s too early to tell where the commission is headed, he said. The commissioners have received a 500-page summary of the more than 8,000 pages of comments filed in response to the notice of inquiry on the report, he said. “We expect thousands of additional pages when reply comments are filed on July 21.”

McDowell cautioned his commission colleagues against relying on a small number of studies in making decisions. “Rather than fixating on rankings as we prepare our National Broadband Plan, I hope that a crucial part of our analysis will include an assessment of what America has done right,” he said. The Broadband Data Improvement Act requires the FCC to compare broadband speeds and prices internationally. If the “comparison were prepared using poor data or inferior methodologies, it could be misleading and be used to justify potentially harmful public policy,” McDowell said.

McDowell specifically criticized rankings by the Organisation for Economic Co-operation and Development that put the U.S. 15th in broadband penetration among member countries. The rankings don’t take into account differences among countries in household size, the commissioner said. “As a result, those who tout the OECD’s findings are doomed to fail at the hands of the very methodology they promote today - no matter what future U.S. policies may actually produce.”

Other studies show the U.S. is doing better on broadband than the OECD rankings indicate, McDowell said. He cited recent reports by the Pew Research Center, Nokia Siemens and the U.K. regulator Ofcom, among others. That’s not to say it’s time to sit back, he said. “Whether we're first or 17th or somewhere in between, and whether we are going up in a ranking or going down, we are Americans and therefore we want to be the best. We must never be satisfied. We must always strive to do better.”

Broadband performance measures must take into account the social value of a high-speed connection, said a Phoenix Center report released Wednesday. “Demographic and economic differences between countries make cross-country comparisons of raw, Internet penetration rates of little policy relevance,” it said. The paper proposes a broadband adoption index that instead measures a country’s broadband performance on its achievement of an individualized adoption target that takes those differences into account.

Policymakers must consider more than just broadband count, said the Phoenix Center’s chief economist, George Ford, who wrote the report. The value of giving a low-income consumer a relatively slow mobile broadband connection may be far greater than that of increasing download speeds in a wealthy suburban area, he said.

The underlying concepts in the paper could be useful as the government works out who should get stimulus money, said Charles Goldfarb, a Congressional Research Service economist. But without clear, consistent definitions of social value and benefits, the measure could be misused, he said. And it may rely too much on data that may not be publicly available, he said.

The Phoenix Center proposal probably would provide a more meaningful international comparison than OECD rankings but may be expensive to carry out because of its complexity, said Prof. Michael Katz of the University of California, Berkeley, a former FCC chief economist. Even so, Katz called “goofy” the idea that there needs to be a single index for a problem as complex and important as broadband. “If you're only going to spend 20 seconds” looking at the issue, a single index might be helpful, he said. “But if you're going to spend days, weeks, months or years, you might want to get a much richer, fuller, complex picture.”