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May 19, 2008
Understanding International Broadband Comparisons
Understanding International Broadband ComparisonsScott Wallsten
May 2008
The OECD Broadband Rankings are a flawed and misleading basis for policy making.
- The OECD rankings do not separate business from residential connections and miss many business connections altogether. Indeed, the OECD misses about 70 million workplace connections in the U.S. and an unknown number in other countries.
- The declining rank of the U.S. is largely a statistical anomaly resulting primarily from larger average households in the U.S., which inexorably leads to lower per capita penetration relative to other countries since each household has a single connection. Thus, there is no basis for the claim that the U.S. relative position has been deteriorating over time.
- In fact, broadband is nearly universally available in the U.S. and the U.S. compares favorably to other rich countries in terms of broadband penetration, speeds, and in broader measures of information and communications technology.
High levels of availability, rapidly increasing penetration, increasing available speeds, and ambiguous consumer demand for faster speeds imply that the broadband market is working reasonably well in the U.S. The apparent lack of a general market failure suggests that any policies intended to affect broadband should be targeted narrowly to avoid directing scarce resources to areas that would not yield net benefits.
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