ITIF: Competition and U.S. Broadband Policy
Dr. Robert Atkinson of the Information Technology and Innovation Foundation (ITIF) has authored a report on "The Role of Competition in a National Broadband Policy" that explores one of the key questions in the ongoing debate about the state of broadband in the United States: is existing competition in the marketplace adequate? And, if it isn't, what is the best approach to spurring greater competition given the nature of the broadband industry?
As ITIF's report acknowledges, "almost everyone involved in broadband policy in the United States agrees that regardless of the current state of competition, more competition is better." Yet Atkinson cautions policymakers against pushing for more competition without first understanding what he calls "significant tradeoffs" that are inherent to the broadband industry. According to ITIF, the "issue, then, becomes one of how to attain the right balance between the cost efficiency of fewer networks and the competitive benefits of more networks."
Here's a summary of key findings from the report:
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In terms of price per megabit per second (mbps), broadband prices in the United States have fallen over the last decade. Compared to other OECD countries, the U.S. ranks 7th in broadband pricing. See the chart we created based on one in the ITIF report.
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While the Federal Communications Commission reports that 87.5 percent of U.S. zip codes have three or more broadband providers (telephone, cable and satellilte), ITIF notes that satellite's higher prices and slower speeds in effect results in most consumers only having two - or two and a half - competitors to choose from.
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Broadband policies should not favor one technology over the other. If the goal is to create more "pipes" to give consumers additional choices, government should enable but not promote.
Download a PDF of the full report from the ITIF. Published October 19, 2007.
Disclosure: Dr. Atkinson has volunteered to be on the advisory board for Tech Policy Summit, and ITIF is a conference sponsor.
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