ing to the National Broadband Map,
approximately 98% of U.S. households
have Internet access with speeds at
least 768kbps downstream and at least
200kbps upstream, and 96% have access to broadband of at least 3mbps
downstream and 768kbps upstream.
Nearly everyone without terrestrial
access can purchase service from two
satellite providers that are both in
the process of significantly upgrading
While availability is not a significant
problem, a large income-based digital divide remains: poor people adopt
broadband at substantially lower rates
than wealthier people. Yet, U.S. policy
does not focus on changing adoption.
It focuses on building out to under-served areas, a less effective way to increase adoption.
2 For example, the $7.1
billion in broadband stimulus grants
focused almost exclusively on building
infrastructure, and the enabling legislation even barred the program from
granting subsidies to individuals rather than firms. Current efforts to reform
universal service suggest this focus is
unlikely to change much.
Speed. Average advertised download
speeds in many OECD countries are
generally faster than they are in the U. S.
As the accompanying figure indicates,
however, the means of advertised plans
do not reflect the speeds consumers
actually purchase or receive. As it turns
out, measured speeds are remarkably
similar across rich countries.
Conventional wisdom holds that
faster broadband speeds are always
better, but is faster more useful? Most
consumers do not value very high
speeds and do not purchase those
speeds even when they are available. It
is true that speeds considered acceptable in the early days of DSL are too
slow for many of today’s common applications. But even today, speeds faster than approximately 10mbps deliver
little incremental value for the simple
reason that even the most bandwidth-intensive uses, like streaming high-definition video, require much less.
Netflix and Amazon, for example,
stream high-definition video at under
5mbps. A broadband connection cannot pull in the video faster than it is being pushed out.
Speed seems to be of so little concern to most U.S. broadband users
wisdom holds that
speeds are always
better, but is faster
since the Bell 103 modem first communicated at a blazing 300bps, and
someday we might consider today’s
speeds similarly absurdly slow, but no
evidence suggests speeds are holding
back innovation today. The typical purchased and available speeds in nearly
every OECD country already exceed
the bandwidth required for commonly
that 80% of them do not even bother to
remember or check their own speed. A
recent FCC survey found that 80% of
U.S. broadband users did not know
the speeds of their home broadband
connections, yet 50% of users reported being “very satisfied” and 41% reporting being “somewhat satisfied”
with their speed. In a detailed study of
residential broadband demand in the
U.S., Rosston, Savage, and Waldman1
found that consumers were willing to
pay about $80 per month for a reliable,
“fast” connection, but were willing to
pay only an additional $3 per month
for a “very fast” connection.
To be sure, demand for speed will
continue to change over time, as it has
What should We measure?
Comparing performance across countries can be valuable, but we should focus on the right things.
Wireless Inputs and Outputs. A few
years ago broadband implicitly meant
wired connections. Within wired
broadband, even as late as 2009 many
industry observers thought the future
of broadband exclusively meant fiber.
Cable’s DOCSIS 3.0 technology improved the capacity of cable broadband
to such an extent that some analysts
believe hybrid-fiber coaxial connections will allow the cable industry to
dominate the wired market in much of
Perhaps even that prediction is
changing. The iPhone, iPad, Android
operating system, and related app
stores have made wireless an increasingly important part of the broadband
ecosystem. Soaring wireless broad-
measured and advertised download speeds (in kbps).
median speedtest.net measured data mean advertised speed
source: speedtest.net, oeCd
note: speedtest.net: median “country daily speed” in Q2 2010
as calculated by the author from net Index source data.