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Study: US Sees 'broadband Boom' This Decade

The U.S. government should avoid making huge changes in its deregulatory telecom policies because consumers have seen a "broadband boom" since 2000, according to a new paper released Wednesday.

Residential broadband speeds in the U.S. grew by 54 times between 2000 and 2008, while wireless broadband speeds grew by a factor of 542, said the paper, from tech research firm Entropy Economics.

"Some interest groups have asserted we live in a sort of digital Dark Age," said Bret Swanson, the paper's author and president of Entropy Economics. "But this didn't seem quite right to us, so we attempted to measure the growth of consumer bandwidth -- or the capacity to communicate -- over the last several years."

A huge economic stimulus package passed by the U.S. Congress earlier this year included US$7.2 billion for broadband deployment and requires the U.S. Federal Communications Commission to create a national broadband plan. Organizations like Free Press, a media reform group, have called on the FCC and Congress to reintroduce some regulations to drive competition to the broadband market.

The U.S. needs strong net-neutrality rules, requirements that networks be open to competitors and reform of the Universal Service Fund, that provides subsidies for traditional telephone service, but not broadband, Free Press said in a paper released in May.

The U.S. has fallen from fifth in the world in broadband penetration in 2000 to 22nd in 2007, according to the International Telecommunication Union, the Free Press report said. In addition, the U.S. is 14th in the world in average advertised download speeds, the Free Press report said.

"We need a new direction," Free Press said. "Each month that policymakers let pass without addressing our broadband problems is another month that millions of low-income children fall further behind in acquiring the technology skills that they will need to compete in the 21st-century global economy. Each month of FCC inaction is another month that millions of Americans will pay billions more than they should for Internet connections that are too slow to even deserve to be called 'broadband.'"

But critics of international comparisons of broadband penetration say the statistics are flawed because they don't take into account population density, and they count broadband connections per capita instead of per household. U.S. families tend to be larger than those in several other countries, and parts of the U.S. have a much lower population density than some other countries ahead of it in the broadband statistics.

U.S. broadband speeds and availability have grown significantly while the U.S. government has taken a largely hands-off approach to telecom regulation, Swanson said. In 2000, businesses paid about $1,000 a month for a 1.5M bps (bits per second) T-1 line, and now, residential consumers can get significantly faster connections for around $50 a month.

From 2000 to 2008, the number of residential broadband customers in the U.S. grew from 5 million to 80 million, Swanson added. Mobile broadband services were nearly nonexistent in 2000, he said.

U.S. broadband speeds do need to get faster to be able to handle new Web-based services such as video, he said. And many rural areas still don't have broadband as an option. The U.S. should also focus on increasing broadband adoption rates, he recommended.

But the U.S. is catching up to countries such as Japan and South Korea, which had large advantages in broadband speeds earlier in the decade, Swanson said.

"We should remain on this pro-investment, pro-big bandwidth course," he said. "There's no need for any dramatic shift that could hinder this very important investment."

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