CASE STUDY 4

GLOBAL BROADBAND ACCESS All historical accounts agree that the Internet was birthed in the United

States. If this is true, does the U.S. continue to be the world foremost user

of the network that it created?

The answer to this question depends on how you look at the numbers.

According to the OECD (Organization of Economic Co-operation and

Development), the U.S. continues to be one of the world frontrunners in

both fixed and mobile broadband subscriptions for Internet access

[OECD11]. However, when viewed on a per capita or population percentage

basis, there is considerable evidence that the average citizen in many of

other highly developed nations around the world is more likely than the

average American to have broadband access to the Internet. Although more

than two-thirds of U.S. households have broadband Internet access,

America’s broadband penetration rate lags that for many other countries

[SALW12].

Recent research indicates that Bulgaria has the highest level of

broadband adoption; it has an adoption rate of 96 percent. South Korea

leads the world in average broadband connection speeds (16.7 Mbps).

Although 81% of the broadband connections in the U.S. had connection

speeds of 2 Mbps or more, 35 other countries had higher percentages in

2011. The U.S. is 13th place worldwide in average broadband connection

speeds [MALI12].

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On a per capita basis, as of January 2012, European nations led the

world in both fixed and mobile broadband adoption. At that time, twenty-six

of every hundred citizens (26%) in European Union (EU) nations had fixed

broadband connections while 54 of every 100 (54%) EU residents had a

mobile broadband connection [WEBS12]. The Netherlands led all countries

worldwide with 38.1 fixed broadband subscribers per 100 inhabitants.

Switzerland and Denmark are not behind. South Korea led Asian nations in

fixed broadband connections with a 35.7% penetration rare. The US was

16th with a 27.6% fixed bandwidth penetration rate.

Mobile access to the Web continues to grow. At the beginning of 2012,

there were over 5.9 billion mobile subscribers worldwide [MOBI12]. Of

these, 1.2 billion were active users of mobile broadband services, according

to a 2011 survey performed on behalf of the (ITU) International

Telecommunications Union [WEBS12]. At that time, 90% of the world’s

population had access to second generation (2G) broadband, while 45% of

the world could access third generation (3G) services. In the U.S., there

were more than 203 million mobile broadband users in 2011 [OECD11].

India and China have the fastest growing populations of mobile users,

but South Korea and Japan have the highest percentages of mobile

broadband users with respective penetration rates of 91% and 88%

[MOBI12]. According to the OECD, the U.S. ranks seventh in mobile

broadband penetration with a rate of nearly 66% [OECD11].

In terms of broadband access speeds, cities in South Korea and Japan

dominate other population centers around the world. Although 23 U.S. cities

made it into the global top 100 list for broadband access speeds in 2011,

none made the top 10 [MALI12]. Citizens in the Romanian city of Timişoara

enjoyed the highest peak broadband access speeds at 41.5 Mbps.

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What do the Numbers Tell Us? So what do all of these facts and figures tell us about broadband access in

the U.S.? Well, it is clear that we continue to be one of the global leaders in

broadband Internet connections. However, it is also apparent that citizens in

other countries can lay claim to being more “connected” to the Internet than

Americans, at least in terms of the percentage of the population with

broadband connections and average connection speeds. In terms of social

media use, however, the U.S. is still at or near the top [HUFF12].

Many reasons have been advanced for why multiple countries can claim

to be more “wired” and Internet-centric than the U.S. For example, in terms

of geographic size, countries like Japan, Singapore, and South Korea have

much smaller footprints than the U.S. for building out fiber optic and mobile

broadband infrastructure. The challenge in bringing this infrastructure to the

comparable percentages of the population in the U.S. is far greater.

Government supported national infrastructure initiatives have also

contributed to greater broadband pervasiveness in numerous countries.

These have enabled Japan, South Korea, and multiple EU nations to roll out

broadband infrastructure to most, or all, corners of their countries. Similar

initiatives have been proposed to bring broadband to the majority of citizens

in the U.S., including those in rural areas, but the legislation needed to make

this happen has languished in Washington, D.C. For mobile broadband, those

countries with the highest penetration rates typically have standardized on a

single multiple access protocol. The U.S., on the other hand, seems content

to let the market sort out which access protocol will dominate. As a result,

no single path forward for either 3G or 4G mobile broadband access has

been adopted and this helps explain why there are pockets of GSM, CSMA,

TDMA, OFDM, and LTE within the mobile broadband marketplace in the U.S.

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Why Aren’t U.S. Percentages Higher? Multiple additional explanations have been provided for why the U.S. lags

other developed countries in broadband access penetration rates. The most

frequently mentioned reasons for why American households not adopting

broadband are summarized in Table C5.1. For some households,

affordability is the most important reason for not having broadband Internet

access. Both the cost of purchasing an acceptably powerful computer and

the recurring monthly subscription Internet access costs are frequently

mentioned as being important deterrents within households for which

affordability is an issue.

The most frequently reported reason for not adopting broadband is the

perception that broadband is not needed [SALW12]. The U.S. has a

significant percentage of its citizens who see little need and/or have little

interest in having high-speed Internet access. Such perceptions persist

among nearly 30% of the households in the U. S. The widespread nature of

such thinking has the potential to undermine government initiatives to

provide government subsidies for building out broadband networks across

the U.S. If potential subscribers do not see a benefit in having broadband

connections to the Internet, why should the government invest money to

make broadband networks accessible to them?

Table C5.1 Major Reasons for no Broadband in U.S. Households

• Lack of need or interest

• Affordability

• Lack of adequate computer

• Unavailability of broadband Internet service

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In the U.S., broadband Internet adoption and use varies across

demographic and geographic groups. Lower income families, people with less

education, those with disabilities, Blacks, Hispanics, and rural residents

generally lag U.S. averages for both broadband adoption and computer use.

Households with children in school, however, tend to have higher broadband

adoption and computer use rates than other households.

Internet access is a central focus of “digital divide” concerns within the

U.S. and across nations around the world. The populations that are most

likely to benefit most from Internet access are those that are least likely to

have it. The potential for digital “have not’s” to be left behind economically

still persists [ZICK12].

Broadband adoption rates around the world suggest that a compelling

case can be made that broadband can and does enhance people’s lives.

However, these have to be communicated to American households without

broadband in a convincing manner. In the U.S., half of the households

without broadband access express very little interest in getting it. These

Americans don’t go online because they do not perceive the Internet as

relevant to them [ZICK12]. Needless, to say, as long as such attitudes exist,

the U.S. will have a hard time catching up with the broadband adoption and

penetration rates that have been experienced by other countries around the

world.

Discussion Points 1. Do some Internet research on national infrastructure initiatives that

have contributed to expanded broadband infrastructure and access in countries around the world. Identify several countries that have benefitted from national broadband infrastructure initiatives and briefly summarize the programs that they implemented.

2. Do some Internet research to on the current status of the National

Broadband Plan and other government-backed broadband access expansion programs in the U.S. Briefly summarize the content of

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pending or recently passed legislation or executive initiatives to bring broadband Internet access to more U.S. citizens.

3. Do some Internet research on the “digital divide” within the U.S.

Summarize which segments of the population are most at risk for being digital “have nots”. Identify efforts being made to address the digital divide within the U.S.

4. Do some research related to identify the countries that have the lowest

broadband and Internet access rates. What patterns can be observed across these countries? How can these low rates be explained.

5. Do some Internet research on the benefits associated with high

broadband access connections? What do users like most about higher connection speeds and how does it improve their lives?

Sources [HUFF] Huffington Post Canada. “Most Wired Countries In The World: Canada To Lose Top Social Media Spot This Year, eMarketer Says.” Retrieved online at: http://www.huffingtonpost.ca/2012/02/29/social-media-rankings- canada_n_1311093.html#s741908&title=6_United_Kingdom [MAKI12] Malik, O. “Global broadband zooms, U.S. penetration is over 80 percent.” Gigaom.com. Retrieved online at: http://gigaom.com/broadband/global-broadband-zooms-us-penetration-is- over-80-percent/. [MOBI12] MobiThinking.com. “Global Mobile Statistics 2012: All quality Mobile Marketing Research, Mobile Web Stats, Subscribers, Ad Revenue, Usage, Trends….” Retrieved online at: http://mobithinking.com/mobile- marketing-tools/latest-mobile-stats. [OECD11] OECD.org. “OECD Broadband Portal.” Retrieved online at: http://www.oecd.org/document/54/0,3746,en_2649_34225_38690102_1_1 _1_1,00.html#Penetration. [SALW12] Salway, D. “New Broadband Adoption Rate Study Released by Department of Commerce.” About.com. Retrieved online at: http://broadband.about.com/od/broadbandadoption/a/New-Broadband- Adoption-Rate-Study-Released-By-Department-Of-Commerce.htm

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[WEBS12] WebSiteOptimization.com. “1.2 Billion Active Mobile Broadband Users – Europe Leads World in Broadband Penetration – December 2011 Bandwidth Report” Retrieved online at: http://www.websiteoptimization.com/bw/1112/ [ZICK12] Zickuhur, K. and Smith, A. “Digital Differences.” Pew Internet. Retrieved online at: http://pewinternet.org/Reports/2012/Digital- differences.aspx