Broadband in America

Last month the National Telecommunications and Information Administration (NTIA) released its annual study of broadband in the U.S., it is one of many on the topic to have been published in the past two months. The number of reports does not lead to consensus as to the success, or failure, of broadband initiatives in this country. One thing that is agreed upon is the importance of bringing broadband to the masses.

The NTIA report admits that, “The lack of a single authoritative data set makes it difficult to establish with certainty whether broadband penetration has become ubiquitous, and this Report acknowledges the benefits of better data gathering tools.” The Pew Internet & American Life Project noted this as well: “there are no systematically collected and publicly available sources of data on adoption and deployment of broadband at the local level.” Regardless, the NTIA paints a pretty picture. Unfortunately it is not one that is shared.

According to the NTIA everything is fine, “The last several years have witnessed substantial growth in the broadband marketplace punctuated by increases in capital investment, innovation, and market entry. Relative to other countries, the United States has experienced superior productivity over the past several years. Americans today enjoy an increasing array of broadband services, available from a growing number of service providers, using a variety of technologies. Penetration continues to grow, and prices continue to fall.” Such a picture should be expected given the report’s title: Networked Nation: Broadband in America. However, as noted, consensus is not the thread that ties these reports together: three other reports released last month strongly disagree with the NTIA assessment.

It is difficult to pick up a business or technology magazine without reading that the United States is falling behind other nations in broadband telecommunications. The real question is not whether the United States is falling behind—it is.” So says Robert D. Atkinson, president of the Information Technology and Innovation Foundation (ITIF) in his paper, Framing a National Broadband Policy.

A Blueprint for Big Broadband, a white paper from Educause, is at least as critical of the NTIA view. According to the paper, “The United States is facing a crisis in broadband connectivity . . . While other nations are preparing for the future, the United States is not . . . The United States needs to take aggressive action to significantly expand our broadband connectivity. Now is not the time for incremental improvements; we are behind, and we must adopt a comprehensive strategy this year if we are to address the growing needs of our citizens and our economy.”

A viewpoint less specific to the U.S., but none-the-less critical of broadband initiatives, comes from The Connectivity Scorecard, a report put out last month by Nokia Siemens Networks. “The most striking result of The Connectivity Scorecard is just how low many countries score. Even the world’s best connected countries have little room for complacency and much work to do . . . For example, even the U.S. registers mediocre performance in broadband relative to the existing best performers today.” Furthermore, “The United States did not rank first in any of the three components – business, consumer and government – but did well enough on all three to be first overall.”

Debates over the success (or failure) of U.S. broadband initiatives (or the lack thereof) will doubtless continue. However, attacks on the validity of numbers are not a pointless exercise; the importance of increased broadband is well documented. California recently produced a pair of reports on the positive impact of broadband on the economy, innovation, and the environment. Last October the American Consumer Institute released Broadband Services: Economic and Environmental Benefits. That report was preceded by a Brookings Institution’s study last summer, The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data.

According to the Brookings Institution, “For every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year. For the entire U.S. private non-farm economy, this suggests an increase of about 300,000 jobs.”


More recent are the two reports from California. Economic Effects of Increased Broadband Use in California, prepared by the Sacramento Regional Research Institute, and released in November found that “Over the entire 2002 to 2005 period, broadband use or the migration from dial-up to broadband generated between roughly 195,000 and 198,000 jobs and approximately $9.3 billion and $11.6 billion of payroll in California.” The other California study, The State of Connectivity: Building Innovation through Broadband, published last month by the California Broadband Task Force, offers this summary: “Without broadband, communication is limited, innovation is stifled, productivity decreases, and quality of life is depressed. With broadband, the potential for economic development is an order of magnitude greater. The body of research now demonstrates that broadband has a substantial impact on individuals and on the economy.”


In addition to the boost broadband supplies the economy it is also being noted for being green.

The California Broadband Task Force noted that, “Some have predicted that the widespread adoption of broadband-based applications will result in a 1 billion ton reduction in greenhouse gases over 10 years.” Much of the green benefit from increased broadband rates stems from its ability to enable telecommuting. Last summer the Consumer Electronics Association (CEA) reported that, “Annually, a worker with a one-way commute of 22 miles can save up to 81,000 mega joules of energy by telecommuting 5 days a week. 81,000 mega joules is equivalent to about 50 percent of the annual electricity consumption of an average household.” The American Consumer Institute also notes this: “In terms of dollars, the lost wages and cost of the vehicle (including gas, depreciation, insurance and maintenance) would be nearly $1 trillion or, incredibly, 7.2 percent of the total gross domestic product of the U.S. In other words, for every $14 produced in the economy; $1 is wasted just getting employees to work using their personal vehicle.”


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