Discovery Institute

« Disco-Tech in Wall Street Journal | Main | Oil and Water: Lessons from the Past »


July 15, 2005
Broadband Lite Blooms, But Asia Zooms

The latest broadband deployment report from the Federal Communications Commission (FCC) announced a 34% jump in total high-speed (broadband downstream, narrow-or broadband upstream) lines, from 28.2 to 37.9 million at year-end 2004. 35.3 million of these lines (93%) were to residential and small business users. DSL jumped 45%, from 9.5 to 13.8 million lines; cable modem lines rose less sharply, 30%, from 16.4 to 21.4 million lines. The remaining 2.7 million lines were for miscellaneous access modes, with 700,0000 fiber or powerline and 500,000 satellite. Advanced service (two-way broadband) lines rose 42%, from 23.5 to 28.2 million lines, with 26.4 million of the 28.9 million total (94%) representing residential and small business users. Advanced service thus represented 76% of all broadband connections at end-2004. Bidirectional lines at 2 megabits-per-second stood at 400,000 at end-2004, with 60 percent optical carrier and 21% traditional wireline. The gap between low-income (under $21,465) and high-income (over $53,494 up to $291,938) users has shrunk from 41 points (96% v. 54%) at end-2000 to 15 (98/8% v. 83.3%) at end-2004. Meanwhile, total domestic wireless connections crossed landline at end-2004, ahead 181.1 to 177.9 million, giving wireless 50.4% of the combined total.

Recently new FCC Chairman Kevin Martin called broadband growth a top priority and pledged further deregulation. But he doesn't yet have the votes, with two opposing Democrats (Jonathan Adelstein and Michael Copps), one vacant Republican seat (his, when he moved up to Michael Powell's chairman seat) and one departing staunch Republican deregulator (Kathleen Abernathy). The numbers above provide Martin with useful ammunition in his stated quest for less regulation.

First, wireline dominance is hard to establish with more wireless links in service than wireline. Second, low-income users have sharply narrowed the usage gap between them and wealthier users. Third, while US "fast web page download" broadband--the FCC's definition begins at 200 kilobits-per-second access, about four times dial-up access speed--is growing nicely, the 2 megabit category still is under one million. South Korean and Japanese users have speeds five to twenty times 2 megabits, for many millions of users. They have what amounts to Turbo-Broadband while we make do with access speeds ranging from Narrowband Deluxe to Broadband Lite. Ranked 12th in global broadband deployment, the US is losing broadband leadership to the East.

Will these arguments carry the day? They should, but never underestimate the pressure state commissions can put to resist deregulation. Also, the Bush White House shows no signs of regarding broadband as a serious policy priority. Martin's main job seems to be to keep the FCC from stirring up hornet's nests with either Congress or the press. Thus do the odds still favor glacial movement, if at all, towards full broadband market deregulation.

Dotted Divider Line





Contact Us
Discovery Institute Logo

Click here for additional contact information