[Infowarrior] - Is U.S. stuck in Internet's slow lane?

[Richard Forno]

Is U.S. stuck in Internet's slow lane?
'We're now in the middle of the pack of developed countries' says expert
By Peter Svensson
The Associated Press
updated 8:54 p.m. ET, Tues., Oct. 30, 2007

NEW YORK - The United States is starting to look like a slowpoke on the
Internet. Examples abound of countries that have faster and cheaper
broadband connections, and more of their population connected to them.

What's less clear is how badly the country that gave birth to the Internet
is doing, and whether the government needs to step in and do something about
it. The Bush administration has tried to foster broadband adoption with a
hands-off approach. If that's seen as a failure by the next administration,
the policy may change.

In a move to get a clearer picture of where the U.S. stands, the House
Energy and Commerce Committee on Tuesday approved legislation that would
develop an annual inventory of existing broadband services ‹ including the
types, advertised speeds and actual number of subscribers ‹ available to
households and businesses across the nation.

The bill, introduced by Rep. Ed Markey, D-Mass., is intended to provide
policy makers with improved data so they can better use grants and subsidies
to target areas lacking high-speed Internet access. He said in a statement
last week that promoting broadband would help spur job growth, access to
health care and education and promote innovation among other benefits.

The inventory wouldn't cover other countries, but a cursory look shows the
U.S. lagging behind at least some of them. In South Korea, for instance, the
average apartment can get an Internet connection that's 15 times faster than
a typical U.S. connection. In Paris, a "triple play" of TV, phone and
broadband service costs less than half of what it does in the U.S.

The Organization for Economic Co-operation and Development ‹ a 30-member
club of nations ‹ compiles the most often cited international comparison. It
puts the U.S. at 15th place for broadband lines per person in 2006, down
from No. 4 in 2001.

The OECD numbers have been vigorously attacked by anti-regulation think
tanks for making the U.S. look exceedingly bad. They point out that the OECD
is not very open about how it compiles the data. It doesn't count people who
have access to the Internet at work, or students who have access in their
dorms.

"We would never base other kinds of policy on that kind of data," said Scott
Wallsten, director of communications policy studies at the Progress and
Freedom Foundation, a think tank that favors deregulation over government
intervention.

But the OECD numbers are in line with other international measures. Figures
from the British research firm Point-Topic Ltd. put the U.S., with 55
percent of its households connected, in 17th place for adoption rates at the
end of June (excluding some very small countries and territories like Macau
and Hong Kong).

"We're now in the middle of the pack of developed countries," said Dave
Burstein, telecom gadfly and the editor of the DSL Prime newsletter, during
a sometimes tense debate at the Columbia Business School's Institute for
Tele-Information.

Burstein says the U.S. is lagging because of low levels of investment by the
big telecom companies and regulatory failure.

Several of the European countries that are doing well have forced telephone
companies to rent their lines to Internet service providers for low fees.
The ISPs use them to run broadband Digital Subscriber Lines, or DSL, often
at speeds much higher than those available in the U.S.

The U.S. Federal Communications Commission went down this regulatory road a
few years ago, but legal challenges from the phone companies forced it to
back away.

In 2004, President Bush called for nationwide broadband access by 2007, to
be nurtured by an absence of taxation and little regulation. The U.S. is
very close to Bush's goal, thanks to the availability of satellite broadband
across the lower 48 states.

But the Internet by satellite is expensive and slow. Nearly everyone may
have access to the Internet, but that doesn't mean they're plugging in.

Part of the problem may be that people don't see fast Internet access as an
essential part of modern life, and may need more of a push to get on. The
U.S. does have wider income disparities than many of the countries that are
outdoing it in broadband, and people in poverty may have other priorities
for their money.

Dan Correa, research analyst at the Information Technology and Innovation
Foundation, believes the U.S. needs a more "proactive" broadband policy, and
compares the lack of government involvement in the field with the situation
in other utilities, which are mostly heavily regulated.

"In the 1930s, we recognized that electricity was essential. We're not quite
at that level in broadband," Correa said.

An FCC chairman appointed by a Democratic president in 2009 may agree.
Current Democratic Commissioner Michael J. Copps has said broadband
availability could be encouraged with tax incentives and loans to rural
utilities.

The United States doesn't look set to catch up to South Korea or even Canada
(with 65 percent of households connected to broadband, according to
Point-Topic) by then, because broadband adoption is slowing down after an
initial growth spurt.

In the last few weeks, the U.S.'s three largest Internet service providers
reported adding 1.2 million subscribers in the third quarter, down from 1.54
million in the same quarter last year, according to a tally by UBS analyst
John Hodulik.

But the U.S. does have a few aces up its sleeve. Apart from satellite
broadband it has widespread cable networks, which provide an alternative to
DSL. Cable has some technical advantages over phone lines, and a new cable
modem technology called Docsis 3.0 could allow U.S. Internet speeds to
leapfrog those in countries dominated by DSL in a few years.

On the phone side, the country's second largest telecommunications company,
Verizon Communications Inc., is spending $23 billion to connect homes
directly with super-fast fiber optics.

"Twenty percent of the U.S. is getting a decent network," Burstein
acknowledges. The new network can match or outdo the 100 megabits per second
Internet service widely available in Japan and Korea, but Verizon isn't yet
selling service at that speed.

___

AP Business Writer Dibya Sarkar contributed to this report from Washington,
D.C.
Copyright 2007 The Associated Press. All rights reserved. This material may
not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/21549824/
MSN Privacy . Legal
© 2007 MSNBC.com