Why does the US continue to lack high-speed Internet connectivity?

I’ve posted on the myth that the US has high speed Internet access before. Yesterday, Stephen DeAngelis at Enterprise Resilience Blog posted on the latest mainstream news article about this myth.  

Last November I posted a weblog about America’s slow progress towards better broadband connectivity [Broadband Bound]. According to a Washington Post article by Blaine Harden, things have not improved much since then, especially in comparison to other developed countries like Japan [“Japan’s Warp-Speed Ride to Internet Future,” 29 August 2007].

“Americans invented the Internet, but the Japanese are running away with it. Broadband service here is eight to 30 times as fast as in the United States — and considerably cheaper. Japan has the world’s fastest Internet connections, delivering more data at a lower cost than anywhere else. … Accelerating broadband speed in [Japan] — as well as in South Korea and much of Europe — is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States. The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.”

The key to success in the information age in large measure depends on the reliability and speed of the connections that can be achieved. Neither individuals nor most companies can increase connection speeds on their own. They must rely on the infrastructure put in place by the telecom sector. Therefore, it is a bit alarming to see the U.S. falling behind so early in the game. The Japanese have pursued an aggressive strategy of “wiring” the country that has been pushed by government policy.

“Japan has surged ahead of the United States on the wings of better wire and more aggressive government regulation, industry analysts say. The copper wire used to hook up Japanese homes is newer and runs in shorter loops to telephone exchanges than in the United States. This is partly a matter of geography and demographics: Japan is relatively small, highly urbanized and densely populated. But better wire is also a legacy of American bombs, which razed much of urban Japan during World War II and led to a wholesale rewiring of the country. In 2000, the Japanese government seized its advantage in wire. In sharp contrast to the Bush administration over the same time period, regulators here compelled big phone companies to open up wires to upstart Internet providers.”

The U.S. is taking a much different course to faster broadband — opting to go wireless rather than wired (I’ll have a post on WiMAX in the near future). Japan’s “wired” solution provides speeds faster than either U.S. DSL or cable modem connections.

“At first, [Japan] used the same DSL technology that exists in the United States. But because of the better, shorter wire in Japan, DSL service here is much faster. Ten to 20 times as fast, according to Pepper, one of the world’s leading experts on broadband infrastructure. Indeed, DSL in Japan is often five to 10 times as fast as what is widely offered by U.S. cable providers, generally viewed as the fastest American carriers.”

Japan didn’t stop with copper connections, it has moved ahead with fiber-optic connections.

“Competition in Japan gave a kick in the pants to Nippon Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise and still Japan’s largest phone company. With the help of government subsidies and tax breaks, NTT launched a nationwide build-out of fiber-optic lines to homes, making the lower-capacity copper wires obsolete. … [NTT] now offers speeds on fiber of up to 100 megabits per second — 17 times as fast as the top speed generally available from U.S. cable. About 8.8 million Japanese homes have fiber lines — roughly nine times the number in the United States.”

In the information age, if you’re not progressing you’re falling behind. There is a lot of talk about a digital divide between the developed and developing world, but a digital divide could also be opening within the developed world and the U.S. is on the wrong side of that gap.

“Japan’s leap forward, as the United States has lost ground among major industrialized countries in providing high-speed broadband connections, has frustrated many American high-tech innovators. ‘The experience of the last seven years shows that sometimes you need a strong federal regulatory framework to ensure that competition happens in a way that is constructive,’ said Vinton G. Cerf, a vice president at Google. Japan’s lead in speed is worrisome because it will shift Internet innovation away from the United States, warns Cerf, who is widely credited with helping to invent some of the Internet’s basic architecture. ‘Once you have very high speeds, I guarantee that people will figure out things to do with it that they haven’t done before,’ he said. As a champion of Japanese-style competition through regulation, Cerf supports ‘net neutrality’ legislation now pending in Congress. It would mandate that phone and cable companies treat all online traffic equally, without imposing higher tolls for certain content. The proposed laws would probably save billions for companies such as Google and Yahoo, but consumer advocates say they would also save money for most home Internet users. U.S. phone and cable companies, which control about 98 percent of the country’s broadband market, strongly oppose the proposed laws, saying they would discourage the huge investments needed to upgrade broadband speed. Yet the story of how Japan outclassed the United States in the provision of better, cheaper Internet service suggests that forceful government regulation can pay substantial dividends.”

When it comes to building infrastructure, governments have historically been intimately involved. The lessons of the past shouldn’t be lost as we sit on the cusp of a new future. Harden notes, however, that even as NTT moves toward a monopolistic position in the fiber-optic business regulatory battles over the future of broadband in Japan are still being fought. His article was accompanied by some interesting figures that demonstrate how the U.S. is falling behind in the broadband race. They are worth examining.

My take on this is Stephen is too light on the US government’s role in failing to provide incentives or force infrastructure upgrades. As he says at the end, governments have historically been involved but with the Internet, they took a hands off approach. Similar to California’s electricity crunch a couple of years ago that resulted from too much unregulated ‘outsourcing’, private industry couldn’t be relied on to provide the systems required.

A number of years ago, nearly ten I think, the local phone company was preparing their field techs on fibre they were so close to rolling it out. Then they decided to go corporate, were bought, and still, no fibre. My neighborhood doesn’t have the population density to satisfy the short-term economic case to upgrade local switches etc, to the telecom doesn’t. I can’t get VOIP via my telecom because they didn’t and still don’t see the economic case to upgrade the local equipment, nor can I get greater than 3mb, so I switched to cable which gives me 7-8mb (download that is, upload is 300-400kb), which is still a far cry from true high-speed.

As Chicago’s recent back down from a city-wide WiFi plan may be based on a valid tech argument (that WiMax will be better and cheaper), but at some point waiting for the next big thing is more expensive than deploying what we have today and upgrading it later. That’s true if you’re looking to build capacity and resulting second and third order effects and not revenue.

By outsourcing the infrastructure, we’re not looking long term. Equal inattention to our road infrastructure is fitting. We need reliable and fast connectivity in
the meat-space as well as in the virtual space to grow the economy, but without the long view of Japan, Korea, and others, short-sightedness in the US wins the day.  

Posted in ICT