Is the U.S. really lagging behind in broadband speeds? Probably not

Zack Christenson Research Fellow, American Consumer Institute
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It’s a largely held thought that broadband around the world is much better, faster and cheaper than it is in the United States. You see reports in the media about how the U.S. can’t keep up in broadband services, or that the U.S. ranks low on broadband speed tests. These reports are usually used as an indictment against broadband providers, and used to lobby for more government regulation of the Internet or even for government-run broadband programs.

In most respects, the reports are untrue — depending on the data you use and the case studies you select. A new report from the American Enterprise Institute suggests that the United States is doing pretty well when it comes to broadband, and that it even far surpasses what’s offered in many EU countries, which is the standard often used.

The report from AEI, authored by Roslyn Layton, who lives in Europe, makes compelling points that not only is the EU’s Internet service worse than in the U.S., it’s actually in dire need of an overhaul and deregulation if Europe intends to compete with the US.

Contrary to many claims, broadband in the U.S. is far cheaper that it is in the EU, when accounting for Value Added Taxes or various fees tacked on by different countries. Moreover, broadband speeds are also much higher than in the EU despite claims. According to an article from the study’s author:

Data from both the U.S. and EU demonstrate that the U.S. exceeds the EU on a number of important broadband measures, including prevalence of speeds of 100 Mbps or greater and availability of cable, LTE, and Fiber-to-the Home (FTTH). All told, 74% of Europeans rely on DSL for broadband, whereas only 34% of Americans do.

Investment in broadband in the U.S. is very high; $68 billion in 2012, and more than $1.2 trillion invested since 1996. The U.S. wireless industry alone has invested $94 per subscriber with the rest of the world spending $16 per subscriber.

According to the AEI study, per capita investment in the U.S. is double what it is in the EU. The investment in infrastructure has shown a clear indication of the United States commitment to faster and better broadband speeds. These investments also show that as more investment is made in things like wireless broadband, prices continue to drop.

Congress can also do more to make sure speeds increase and investment in new broadband infrastructure continues — it can move faster to approve spectrum auctions, thereby repurposing vast amounts of spectrum currently sitting dormantm either because broadcasters don’t need it or the government is sitting on spectrum they don’t use. Congress can also see to it that the FCC prevents further regulation of the Internet, something that could be terribly detrimental to the Internet’s future.

As we recently saw between the deal between Netflix and Comcast or between ESPN and AT&T, the market is perfectly capable of brokering deals that will ultimately be beneficial to consumers. On its current course, and without further government interference, the future of broadband will look even better, faster and cheaper.

Zach Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization.  For more information about the Institute, visit www.theamericanconsumer.org.