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U.S. Should Draft Comprehensive Strategy, Provide Incentives to Boost Broadband Access

ITIF Report Explains International Broadband Leadership; Includes New 2008 ITIF Broadband Rankings

WASHINGTON, D.C. - The federal government should create a national broadband strategy, create incentives and support efforts to boost broadband demand in order to increase broadband access, according to a new report released today. The report by the Information Technology and Innovation Foundation finds that the U.S. government could and should learn from the successful broadband policies followed by other governments.

In a new report examining broadband policies in 9 nations, the Information Technology and Innovation Foundation (ITIF) finds that while we shouldn't look to other nations for silver bullets or assume that practices in one nation will automatically work in another, U.S. policymakers can and should look to broadband best practices in other nations. Learning the right lessons and emulating the right policies here will enable the United States to improve our broadband performance faster than in the absence of proactive policies. These lessons include:

Leadership matters. Nations with robust national broadband strategies fare better than those without. For example, leadership from the very top of the Japanese government and corporate world, including Prime Minister Yoshiro Mori and Sony Chairman Nobuyuki Idei, helped craft and implement a strategy to make Japan the "world’s leading IT nation" by 2005.

Incentives matter. Because it is expensive for operators to deploy broadband networks, many countries have provided financial incentives. For example, the Swedish government allocated more than $800 million to spur broadband deployment, particularly in rural areas of the country. For the U.S. to match this investment as a share of GDP, it would need to invest more than $30 billion, a far cry from the minimal public investments made to date.

Competition matters. But in contrast to those who promote unbundling of networks as the key factor in national success, the report finds that both inter-modal and intra-modal competition have strengths and weaknesses and national environments largely influence which mode of competition is best for a nation to promote. For example, many European nations turned to unbundling regulations to promote intra-modal competition because inter-modal competition was limited, in part due to the fact that regulators had let incumbent telecommunications companies own cable networks.

Demand-side policies matter. Given that only around two-thirds of Americans have a computer at home, even the most robust supply-side policies will not produce universal broadband usage. Other nations have taken the demand side more seriously. For example, the Swedish government has subsidized computer purchases and as a result, almost 90 percent of Swedes have a PC at home.

It's high speed networks, stupid. With broadband take-up rates increasing in most nations and with the advent of a host of next-generation applications that demand faster networks, broadband speeds are becoming just as important when assessing a nation's progress in broadband. In some countries fiber to the home is responsible for a large and growing share of connections (for example, 36 percent in Japan and 31 percent in South Korea). While the United States lags behind South Korea and Japan, as a share of