Perception Denies America’s Broadband Leadership
Perception is a powerful force.
Despite an extensive list of statistics indicating just the opposite, Susan Crawford continues to lambaste the state of American broadband. In an op-ed for The New York Times titled, “How to Get America Online,” Crawford opines that “the wireless and wired markets for high-speed Internet access have become heavily concentrated” due to “a few powerful companies with enormous influence over policymaking.” As a result, “prices are too high,” “speeds [are] too slow” and “America lags behind almost every other industrialized country in high-speed access — even France, the bête noir of American free-marketeers, has better and cheaper Internet access.” One wonders what Crawford means by “better” and “cheaper.”
When it comes to broadband speeds, the U.S. is a clear leader over France. According to the latest Akamai report, France ranks number 36 in average broadband speeds, clocking in at 4.8 Mbps, while the U.S. comes in at number 8, with an average of 7.2 Mbps. Peak speeds in the U.S. amount to 29.6 Mbps compared to France’s 19.6 Mbps.
So, then, is broadband access in France really “cheaper” than in the U.S.? Not quite. In fact, as the Discovery Institute’s Hance Haney explains, the same “pro-competition” policies that Crawford commonly advocates for have made French citizens dependent upon government financing for the deployment of fiber networks.
In 2009, the French government forced France Télécom to lease capacity on its wires to rivals for a regulated price. DSL subscriptions, the majority of which ride France Télécom’s network, make up 95% of all broadband connections in the country. While competition among DSL providers has produced lower prices for consumers, it has come at the expense of private investment in fiber networks. It’s not hard to see how the heavy-handed government regulation, in the name of increasing competition, could have extremely detrimental effects on America’s broadband networks. Given the difficult fiscal situation facing the federal government, it’s not clear how Crawford will fund the “long-term, low-interest financing” or “subsidies… for competitive companies” she calls for.
Private companies have invested more than $1.2 trillion to deploy state-of-the-art broadband networks in America, including $250 billion during the height of the recession between 2008 and 2011, thanks to the “hands off” policies implemented in the 1990s by President Clinton and a bipartisan Congress. President Clinton’s appointee, FCC Chairman William E. Kennard, declared that “the best decision government ever made with respect to the Internet was the decision that the FCC made 15 years ago NOT to impose regulation on it.”
Crawford is entitled to her own perception that “communications regulation… unleashes human ingenuity.” But if her goal is to get Americans online, as the title of her op-ed suggests, she should look to history to see the limitations of a heavily-regulated broadband market and the benefits of light-touch regulatory policies that incent private sector investment.