US Broadband rankings

It is not hard to find references on the Internet to the comparative broadband statistics published by the OECD and the ITU. Thus, it is interesting when an alternative methodology or analysis is posted, such as this one (the direct URL to the report, bypassing CNET is here). Quoting the paper:

To provide policymakers a tool to compare broadband subscription rates between countries, this PAPER develops and presents the Broadband Performance Index (BPI). This index quantifies the relationship between a country’s broadband subscriptions per capita and that country’s economic and demographic endowments. This approach is policy-relevant because it strips away many factors over which telecom policymakers have very little influence or control. As a result, we believe that the BPI provides telecom policymakers with a method of comparing broadband subscription rates among countries that is superior to existing measurements, all of which depend upon raw data that do not take these factors into account.

We compute the Broadband Performance Index for each OECD country by first estimating the relationship between these endowments and broadband subscriptions, and we use that information to compare how that country performs relative to expectations. The index for each country indicates whether a country’s broadband subscription rate meets, exceeds, or falls below what would be reasonably expected for that country, given its demographic and economic endowments.

Some of our findings will be of significant interest to policymakers. For example, we find that the United States generally meets expectations in its conversion of its national endowments into broadband subscriptions. This finding conflicts with claims that the United States is in a “broadband ditch” and is failing to perform up to expectations, at least with respect to subscriptions.

Also, we find that many relatively poor countries, like Turkey and Portugal, which actually rank behind the United States according to the OECD, are doing a better job of converting their national endowments into broadband penetration than many highly ranked countries. Indeed, many countries that rank higher than the United States according to the OECD, like Denmark and Norway, are in fact underperforming the United States when one considers demographic and economic factors.

Update (2007/7/25): You might find this item over at Marginal Revolution interesting and relevant.

Do you think this approach has merit? How much should a nation's policy be guided by how it ranks internationally with other countries?