FCC Urged to Take International Comparisons with Grain of Salt

The FCC International Bureau is collecting information about international broadband strategies, global pricing and community-level information on broadband development, adoption and demographics, Irene Wu, the bureau’s research director, said in an opening presentation. Of 30 countries reviewed by the bureau, many have national strategies that include geographic targets, as well as goals for speed and adoption rate, she said. Many of the more recent plans are tied into the countries’ broader economic-stimulus efforts, she said.

It would be “silly” to ignore other countries’ broadband strategies, and the FCC should at least analyze international data for common, best practices, Benkler said. The FCC should carefully analyze definitions, components and weighting “with the understanding that none of these are perfect,” he said. “If we think that by one or another data set … we will come up with an answer that will make reasoned judgement unnecessary, we're wrong.”

Making international comparisons isn’t easy, because countries have many differences, said Information Technology & Innovation Foundation President Robert Atkinson. The variables include density, geography, industry structure, digital literacy and PC adoption, he said. “Simple-minded comparisons” focusing on per-capita data won’t help, agreed Empiris Chairman Jeffrey Eisenach.

Wu said she’s interested in how broadband adoption may vary because of cultural differences between countries. “I hesitate to go down the path that says, ‘Because we have different cultures in the world, there is nothing that can be learned from each other because we're all so unique,'” she said. But there are measures such as education and family size that reflect culture and may be useful, she said.

Broadband growth provides a big boost for a country’s economy, said Tim Kelly, the World Bank’s lead policy specialist on information communication technologies. “A 10 percent increase in broadband has a much greater impact” on gross domestic product “per capita than almost any other ICTs,” said Kelly. U.S. broadband penetration is growing, but not at the same rate as “best practice” countries, he said. The $7.2 billion set aside for broadband stimulus is one of the largest investments by a country in history, but per capita it’s below those in other countries, such as Japan, Kelly said. The U.S. has set “more modest” targets than other countries, he said.

“Market forces alone may not guarantee” widespread broadband, so the government must intervene, said Young Kyu Noh, the South Korean embassy’s information and communications counselor. Requiring participation by all parts of the government was one key to his country’s successful broadband plan, Noh said. Every ministry prepared an annual action plan specifying how they would help the effort to spur broadband deployment, adoption and use, he said. Offering broadband free to schools improved adoption among young people, Noh said. But he said widespread broadband has been easier for South Korea than the U.S. because the size of his country is between those of Indiana and Virginia.

Intervention is important for solving market failures, said Raul Katz, the director of business strategy research at the Columbia Institute for Tele-Information. “But it’s important that the government clearly lay out the competition model up front.” Atkinson, however, said the U.S. has a “middling” broadband ranking “ because of a “failure of facilitation,” not “because of a failure of policy or regulation models.” The regulatory model is sound, but the U.S. needs to do better at promoting investment, he said. Other countries have successfully used a mix of grants, loans and tax incentives to spur deployment, he said.

Before deciding where to concentrate investment, it’s important for the government to figure out what it’s “trying to maximize,” Katz said. In Germany, aiming investment at more advanced areas increased the number of jobs, he said. Investment in low-penetrated areas resulted in short-term job loss “because of the productivity effect of having labor substitution,” he said. Atkinson disagreed: U.S. broadband policy shouldn’t be based on tradeoffs, he said. “It’s inevitable that we will have close to 100 percent penetration in the U.S. The real question is when.” Making the investment sooner is better than later, he said.

Getting service to very remote areas may require giving a carrier “monopoly rights” to ensure a return on its investment, Katz said. Funding multiple providers in one area, as the U.S. has done, is an inefficient way to spur broadband, Atkinson said.

Policymakers should consider more than speed in judging broadband quality, said Robert Pepper, Cisco’s vice president for global technology policy. Latency, jitter and other variables can be just as significant or more so, depending on the application, he said. The more apps supported, the more demand there will be for broadband, he said. “Broadband itself is multi-dimensional,” he said. “It’s not static. Quality actually makes a huge difference.” Speed alone won’t spur adoption, agreed Deborah Lathen, a consultant for British Telecom. Many people can afford broadband but have no interest in it, she said. “At some point … you have to talk about what is the content and what are the applications for broadband that will make people” want it.