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Why is U.S. Broadband Adoption Stagnating?

May 22, 2012 - 0 Comments

By Howard Baldwin, Contributing Columnist

Two reports issued recently  on global broadband adoption reveal a dim outlook for the United States when it comes to competitive parity. This is merely the latest assessment that raises the question — when will America attain parity within the key economic centers of the nation?

First, the Broadband Forum released its annual Broadband and IPTV Progress Report. Globally, the news is good: almost 600,000,000 people worldwide have broadband access, and the annual growth rate of 12.3% is the largest seen in five years.

But among 20 countries, the U.S. was among the five worst countries for percentage growth rate in broadband adoption. Granted, when you talk about percentage growth, you always have to take into account the starting point; a country with higher penetration to begin with is going to have a lower growth rate.

Using that parameter, it’s not surprising that BRIC countries — Brazil (19.33%), Russia (36.85%), India (24.46%), China (20.35%) — all had double-digit growth, as did Mexico (10.4%) and the Ukraine (34.59%).

Nor is it surprising that the five lowest countries in percentage growth were Italy (3.47%), Australia (3.91%) South Korea (4.36%), Canada (4.69%) and the United States (5.09%) —  South Korea is traditionally considered one of the leaders in broadband deployment.

Why the Adoption Engine has Stalled

The second report, issued by TechNet (a bipartisan group of CEOs promoting technology) and entitled Broadband Adoption in 2012: Little Movement Since ‘09 & Stakeholders Can Do More To Spur Adoption, corroborates the disappointing state of U.S. adoption. Admittedly, the TechNet report focuses solely on consumer adoption, rather than business-oriented networking, but the report nonetheless focuses blame on issues that affect adoption throughout the country.

Specifically, there’s a lack of coordination of programs such as the National Broadband Plan and the 2009 American Recovery and Reinvestment Act and “insufficient attention to assessing program outcomes.” The report notes:

[This] is a problem for two reasons. First, it means stakeholders are flying blind when it comes to understanding best practices to improve broadband adoption. Second, to the extent that poor policy coordination hampers efforts to increase broadband adoption, we run the risk of having a less inclusive society, a smaller domestic market for tech goods and services, and a less innovative economy.

Does TechNet have a point about lack of coordination at the federal level? One need only look at the recent kerfuffle over broadband spectrum, with the FCC, Congress, the Department of Defense, and both rural and national carriers pointing fingers at each other regarding the inability until recently to schedule a wireless spectrum auction.

But even the most inattentive consumer can understand the ramification of government regulations: when I moved into my current residence, in the heart of Silicon Valley, AT&T told me that they couldn’t guarantee my DSL service because I was beyond the 10,000-foot limit from the closest central office.

When I asked why AT&T wasn’t concentrating DSL deployment in one of the wealthiest and most technologically advanced regions of the country, I was told that federal law prohibited the carrier from deployment based on income; it had to fairly deploy broadband capabilities no matter what the potential payback was.

Thriving in a Global Networked Economy

Time founder Henry Luce dubbed the 1900s “the American Century,” because of the industrial strength the U.S. amassed, particularly after World War II. The world has evolved, and industrial strength is no longer the yardstick of power – it’s now technological strength.

The United States may currently have an edge in technological and entrepreneurial spark — ironically, thanks to federal regulations that protect intellectual property, oversee financial transactions, and guard against corruption – but what happens as other governments move toward American-style democracy and an entrepreneur based anywhere in the world can set up shop and hire local talent?

Combine a decreasing commitment to American education (especially in math and science) with a decreasing commitment to broadband adoption and its resulting innovations, and it’s not hard to foresee a shift in the global balance of where work gets done — and where it gets done the fastest online.

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