http://www.washingtonmonthly.com/features/2006/0601.podesta.html American residents and businesses now pay two to three times as much for slower and poorer quality service than countries like South Korea or Japan. Since 2001, according to the International Telecommunications Union, the United States has fallen from fourth to 16th in the world in broadband penetration. Thomas Bleha recently argued in Foreign Affairs that what passes for broadband in the United States is "the slowest, most expensive and least reliable in the developed world." While about 60 percent of U.S. households do not subscribe to broadband because it is either unavailable where they live or they cannot afford it, most Japanese citizens can access a high-speed connection that's more than 10 times faster than what's available here for just $22 a month. (Japan is now rolling out ultra-high speed access at more than 500 times what the Federal Communications Commission considers to be "broadband" in this country.)
The economic ramifications are profound. "Asians will have the first crack at developing the new commercial applications, products, services, and content of the high-speed-broadband era," writes Bleha. Already, South Korea, which leads the world in the percentage of its businesses and homes with broadband, is the number one developer of online video games--perhaps the fastest-growing industry today. What's more, societies in which broadband use is near-universal will adapt to its uses much more quickly than those where access is available only to the well-to-do few.
The countries surpassing the United States in broadband deployment did so by using a combination of public entities and private firms. The Japanese built their world-class system by ensuring "open access" to residential telephone lines, meaning competitors paid the same wholesale price to use the wires. The country is also establishing a super-fast, nationwide fiber system via a combination of tax breaks, debt guarantees and subsidies. But of particular note, the Japanese government also encouraged municipalities to build their own networks, especially in rural areas. Towns and villages willing to set up their own ultra-high-speed fiber networks received government subsidies covering approximately one-third of their costs.
Unfortunately, the United States has pursued the opposite policy. President Bush has called for "universal, affordable access for broadband technology by the year 2007," and FCC Chairman Kevin Martin claims broadband deployment is his "highest priority." But they have made no progress toward these goals; in fact, they have rewarded their corporate cronies for maintaining high prices, low speeds and lackluster innovation. Federal policies have not merely failed to correct our broadband problems, they have made them worse. Instead of encouraging competition, the FCC has allowed DSL providers and cable companies to shut out competitors by denying access to their lines. And whereas the Japanese government encourages individual towns to set up their own "Community Internet," Washington has done nothing. Fourteen states in the United States now have laws on the books restricting cities and towns from building their own high-speed Internet networks. No wonder America is falling behind its Asian competitors.