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Democracy & Technology Blog Forget broadband, U.S. ranks 45th in phone penetration

It is unacceptable that the country which invented the Internet ranks 15th in the world in broadband adoption, according to President Obama — a fact which he and some others believe justifies government spending and regulation to “renew our information superhighway.”
A new paper by Scott Wallsten at the Technology Policy Institute contributes useful perspective concerning the U.S. ranking (which actually is in relation not to the world as a whole, only to the 30 nations which comprise the Organization for Economic Co-operation and Development (OECD).)

Because average household sizes differ across countries, when every household in every country is connected to broadband the U.S. will rank 18th among OECD countries and much lower when compared to all countries in the world. Consider, for example, country rankings of the number of landline telephone subscribers per capita. In 2006 (before consumers started cutting their landlines in significant numbers), the U.S. ranked 45th in the world by this metric, despite 95 percent of all U.S. households having a telephone. (emphasis added.)

Besides the billions of dollars in the stimulus package for broadband subsidies, the FCC is on an urgent mission to devise a national broadband strategy. But the the light regulation and private investment we have now will drive adoption to the saturation point within 2-3 years.

If current trends continue, the U.S. and nearly all wealthy OECD countries will reach a saturation point within the next few years.
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[B]roadband penetration will eventually reach a saturation point that will be difficult to exceed. Korea, for example, has probably reached that point at about 80 percent of households onnected. At current trends the U.S. will be in a similar position sometime in 2011.

another complaint is that U.S. consumers pay more for broadband than consumers in other nations. For example, a recent paper by S. Derek Turner at Free Press claims:

The monthly cost of broadband in America is higher than all but seven of the 30 OECD nations, only slightly less expensive than the offerings in countries like Hungary and Poland …

But Wallsten points out that the

U.S. appears to have among the least expensive low-end broadband plans among OECD countries, but among the more expensive high-end plans.

Wallsten also notes that the U.S. leads all OECD countries in investment in information and communications technology as a share of gross fixed capital.
“Understanding International Broadband Comparisons — 2009 Update,” by Scott Wallsten, Technology Policy Institute (Jun. 2009) can be found here.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.