Despite claims to the contrary, the United States is not falling behind other countries in the development of broadband networks, according to a report released Tuesday by the Mercatus Center.
The report, authored by Roslyn Layton and Michael Horney, compares broadband in the U.S. and other countries, and finds that “the United States is a global leader in broadband, as measured by the level of broadband-enabled economic activity, the number of Internet-based companies, the level of digital exports, and the level of Internet-enabled employment.” (RELATED: Is the U.S. Really Falling Behind in Broadband Speeds? Probably Not)
One claim addressed in the report is that Europeans pay less for faster broadband speeds. The authors dispute this, saying such assertions “fail to standardize the comparisons—for example, to compare similar networks and speeds.”
They point out that only 26 percent of Europeans have access to 4G/LTE coverage, compared to 97 percent of Americans, and that “American networks are 75 percent faster than those in the EU.”
Moreover, they say, traditional comparisons fail to account for media license fees, which are rare in America but common in much of the rest of the world, and “can add as much as $44 to the monthly cost of broadband.” Although the overall price of broadband remains higher than average in America, this is more than made up for with lower unit costs and higher quality of service, meaning, “Americans get more value for their money.”
Another claim sometimes made by broadband pessimists is that America needs to regulate broadband as a utility in order to ensure sufficient investment. However, a decade of experience in the EU contradicts that argument, according to Layton and Horney.
Over the last decade, America has consistently accounted for roughly one-quarter of worldwide investment in broadband infrastructure, even as global investment increased by more than 150 percent. Conversely, over the same period Europe’s share of global broadband investment fell from about one-third to less than one-fifth, “largely because of onerous utility-style regulation.” (RELATED: Why Europe is Falling Behind America on Broadband)
Based on their findings, Layton and Horney suggest several steps the U.S. can take to maintain its dominance in broadband technology.
First, they advocate “technology neutrality,” meaning the government should not encourage any particular form of broadband technology through subsidies or regulation. “Given the cash flow of the broadband industry, Americans’ voracious appetite for the Internet, and the fact that existing broadband technology enables all current applications,” they argue that there is no need for subsidies.
Additionally, government subsidies compel taxpayers to foot the bill for technologies they may or may not want, whereas a reliance on private investment ensures that technological development conforms to the demands of consumers. (RELATED: The Top Ten Reasons to Oppose Broadband Utility Regulation)
They also recommend removing barriers to infrastructure construction at the local level.
According to the report, “Municipalities often hinder the deployment of infrastructure by charging exorbitant rents, making unnecessary delays, requiring unreasonable conditions and fees, and opposing masts and towers for a variety of reasons.” They are able to do this because towers and masts for mobile networks frequently must be located in a specific site, giving the landowner “a monopoly of sorts on the site in question.”
If the government wishes to encourage infrastructure deployment in rural areas, they conclude, “it may be in the public interest to remove barriers, especially on public land.”
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