Assessing Broadband in America: OECD and ITIF Broadband Rankings

The United States continues to fall behind in broadband adoption, ranking 15th among 30 OECD nations according to the latest installment of the organization’s semiannual survey of broadband subscribership. The number of U.S. broadband subscribers per 100 people grew to 19.6 in December 2006, up 0.4 percentage points from 19.2 in June 2006, a growth rate far below the 2.0 percentage point OECD average. Many of the leading European countries – including Denmark, Netherlands, Iceland, Switzerland, and Norway – continue to pull away from the pack with faster adoption rates. When the OECD first collected this data in 2001, the United States ranked 4th among the 30 nations surveyed. After several years of steady decline in the rankings, we now rank 15th (see Figure 1).

While adoption rate is an important measure, it is not sufficient to accurately assess a nation’s relative position in broadband technology. A more complete measure would also consider speed and price. Increasingly, in the digital economy it is the speed and capacity of the network that matters. Therefore, ITIF has expanded upon the OECD rankings, developing a model that measures broadband penetration, price and speed in OECD countries. The findings show that America, which ranks 12th overall, faces a multifaceted broadband challenge.

There are several steps that policymakers should take to ensure faster progress toward ubiquitous high-speed broadband, including:

• Congress should exempt broadband services from federal, state and local taxation and from requirements to pay into the Universal Service Fund.
• All states should enact video franchise laws.
• Congress should enact tax incentives for the deployment of new high-speed broadband networks.
• The FCC should move to a two-tiered definition of high-speed Internet by developing a more robust 3 megabit per second (mbps) asymmetrical “broadband” standard.
• The FCC should collect county-level subscriber data for both speed tiers.
• If Congress fails to mandate changes to FCC local broadband data collection, states should work through non-governmental entities to collect and report local data.
• The National Telecommunications and Information Administration (NTIA) should help facilitate the development of a bottom-up database of local broadband speeds and prices.