Democracy & Technology Blog U.S. far behind Japan in fiber to the premises
Verizon recently issued details on its massive investment in broadband. As great as it sounds, it’s still a far cry from Japan. The American company expects to invest $18 billion between 2004 and 2010 in a network that will bring fiber to the home or business (FiOS). The investment generates “profitable growth” within 4 years. By the end of 2006, Verizon expects to offer fiber Internet connections to 6 million premises. So far, about 15% subscribe to the service. The company therefore has a target of 725,000 fiber Internet customers by the end of 2006. By year-end 2010, Verizon expects to offer the service to 18 million premises and it predicts that it will have 7 million customers.
Fred Leonberger of EOvation Technologies, among others, have noted that NTT of Japan expects to have more than 6 million fiber subscribers by early next year. By 2010, NTT expects to have 30 million subscribers. Leonberger pointed this out during a panel discussion at Telecosm last week in Lake Tahoe on the subject of optical networks.
This is another bit of evidence that we are doing something wrong in the U.S. Specifically, we are over-regulating and over-taxing communications services while we needlessly alarm investors that more is on the way.
Some are trying to argue that there really isn’t a problem. For example, in “What U.S. Broadband Problem?” Scott Wallsten and Seth Sacher at AEI conclude that broadband technology in the U.S. is “both competitive and growing steadily.” They examined international high-speed service rankings generally, not just fiber, and concluded that international comparisons — which show the U.S. below many other industrialized countries — are problematic.
International numbers are generally self-reported by governments or government agencies that do not collect data in comparable ways and may be interested in appearing to have a high rank. To make matters worse, the Organisation for Economic Co-operation and Development (OECD) and the International Telecommunications Union, which report the numbers, generally do not publish their own methodologies, making it even less clear how the rankings are alculated.
Wallsten and Sacher may have a good point. But it’s irrelevant when comparing the actual projections of NTT and Verizon. Those projections prove the U.S. is far behind Japan in deploying fiber to homes and businesses.
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See: “Verizon Provides New Financial and Operational Details on its Fiber Network as Deployment Gains Momentum,” Sept. 27, 2006
See: “Fiber lights a fire under NTT,” Telephony Online, Oct. 4, 2006
See: “NTT Forecasts Profit Gain This Year, Raises Dividend,” Bloomberg.com, May 12, 2006
See: “What Broadband Problem?,” Jul, 25, 2006