There are no shortage of articles like
this one in the Washington Post. The theme of these articles compares the state of broadband in the US to Japan and South Korea, where access speeds and prices are better. Quoting the article:
Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.
Accelerating broadband speed in this country -- as well as in South Korea and much of Europe -- is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States.
The reason for this is given to be (again, quoting the article):
Japan has surged ahead of the United States on the wings of better wire and more aggressive government regulation, industry analysts say.
The copper wire used to hook up Japanese homes is newer and runs in shorter loops to telephone exchanges than in the United States. This is partly a matter of geography and demographics: Japan is relatively small, highly urbanized and densely populated. But better wire is also a legacy of American bombs, which razed much of urban Japan during World War II and led to a wholesale rewiring of the country.
In 2000, the Japanese government seized its advantage in wire. In sharp contrast to the Bush administration over the same time period, regulators here compelled big phone companies to open up wires to upstart Internet providers.
In short order, broadband exploded. At first, it used the same DSL technology that exists in the United States. But because of the better, shorter wire in Japan, DSL service here is much faster. Ten to 20 times as fast, according to Pepper, one of the world's leading experts on broadband infrastructure.
Indeed, DSL in Japan is often five to 10 times as fast as what is widely offered by U.S. cable providers, generally viewed as the fastest American carriers. (Cable has not been much of a player in Japan.)
Perhaps more important, competition in Japan gave a kick in the pants to Nippon Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise and still Japan's largest phone company. With the help of government subsidies and tax breaks, NTT launched a nationwide build-out of fiber-optic lines to homes, making the lower-capacity copper wires obsolete.
This article (as do others of its kind) raise a number of questions that are interesting to consider:
- Can you really compare developments in Japan and South Korea to the US?
- The article mentions that the developments in Japan and South Korea are the result of government subsidies. Is this efficient?
- The article discusses local loop unbundling as one of the supporting policies. These policies have been in place in the US since the mid-1990s, although recent decisions have exempted newer infrastructure builds from this policy. Telephone companies have argued that the rates that were set were non-compensatory ... that is, amounted to a subsidy of their competitors because they were below cost. It turns out to be difficult to determine the truth of this. There were many competitors in the US in the late 1990s ... many of these collapsed during the dot-com bust ... was that due to poor business decisions or changes in the rates charged by telephone companies?
- Does the US need a different broadband policy? What should it be? There are many opinions on this (see, for example DACA on the one hand and this on the other, though there are many other proposals as well)
