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The Broadband Numbers Racket

Financial Times has an article called The broadband numbers racket, by former FCC chief economist Thomas Hazlett, now a professor of law and economics at George Mason University.

Hazlett points out that too many people use superficial selection of statistics to bolster questionable policy positions.

Cherry picking broadband penetration numbers to imply the US is slipping into Third World status is fine for a quickie term paper, at least if Wikipedia goes down. But adults ought sort through the multi-dimensional complexity of the real world -

The article refers to a paper [PDF] published in the Review of Network Economics. The paper looks at different models of regulation on broadband networks and among the findings, it states

incentives for network investment decline when network owners lose a set of valuable property rights.

Both articles—from Financial Times and Network Economics—make an interesting read.

By Mark Goldberg, Telecommunications Consultant

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Comments

Interesting Dan Campbell  –  Sep 28, 2009 2:38 PM

An interesting article and even better evaluation paper. It just goes to show how difficult it is to really make fair comparisons across the globe when there are all sorts of factors at play, many that aren’t assessed even in this paper, e.g., geography and how that plays into the logistical hurdles and costs of deployment; the fair comparisons of homes passed versus actual broadband users, including (actually excluding) those that have options for broadband but choose not to get it; considering single family homes passed versus multi-dwelling units in a fair comparison of true connectivity and bandwidth to the door (and not just the street or building demark); etc.

It seems like all these global broadband “ranking” evaluations are as nebulous as the college football BCS rankings.  Worse actually.  You see everything from the US is 19th to 3rd to 50th to…on and on.  Then you have hype thrown in like “the US is behind the rest of the world” in broadband.  Although those that say that I am sure do not mean to be taken literally, that is a gross exaggeration and blatently false, and it is that type of reckless language that just clutters the debate.  The US is behind all 230+ countries all over the world?  Really??  No.  Of course not.  There are places on the planet where Internet access is not available at all, others where it is available but at low speeds, and plenty of places where the pricing is extortionate (by any standard).

It is best to try to put some sanity to it all and take these evaluations across country and continental boundaries with a pound of salt.  I like how this paper stuck to evaluating US policy and its possible effects on broadband numbers, acknowledging that there are other factors through those same years that play into the numbers but are not included (e.g., technology changes, differences and advancements (or lack thereof)), and using close neighbors like Canada as a comparison that is more fair than (pick a much underserved country than the US.  There are many.)

The US can certainly do better, and regulation is a massive factor in it, maybe the biggest, but not the only factor.  The comparisons are fun but very speculative no matter how scientific they seem.

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