Understanding International Broadband Comparisons
Scott 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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Scott Wallsten is President and Senior Fellow at the Technology Policy Institute, a Policy Fellow at the Stanford Institute for Economic Policy Research (SIEPR), and a senior fellow at the Georgetown Center for Business and Public Policy. He is an economist with expertise in industrial organization and public policy, and his research focuses on competition, regulation, telecommunications, the economics of digitization, and technology policy. He was the economics director for the FCC's National Broadband Plan and has been a lecturer in Stanford University's public policy program, director of communications policy studies and senior fellow at the Progress & Freedom Foundation, a senior fellow at the AEI–Brookings Joint Center for Regulatory Studies, a resident scholar at the American Enterprise Institute, an economist at the World Bank, and a staff economist at the U.S. President's Council of Economic Advisers. He holds a PhD in economics from Stanford University.
