US Broadband Mix is Far More Competitive and Consumer Friendly than the EU

On Monday, June 17th The Information Technology & Innovation Foundation (ITIF) hosted a panel discussion titled International Broadband Quality: How’s That Policy Working?  The members of the panel included Martin Thelle, Managing Director for Copenhagen Economics; Roslyn Layton, Vice President of Strand Consult and Ph.D Fellow at Aalborg University’s Center for Communication; Jeffrey A. Eisenach, Managing Director and Principal of Navigant Economics; and Richard Bennett, Senior Research Fellow at ITIF.  ITIF President, Robert Atkinson served as moderator.


During the discussion, Thelle pointed out that while the US and Europe started out at similar points 10-15 years ago, each has since made different approaches to telecommunication regulation and has experienced different results.  Thelle explained that the policies of the U.S. placed it in a much better position than Europe currently is in, mainly due to the ability of the U.S. to rely upon infrastructure-based competition.


Layton pointed out that DSL predominates fixed-line high-speed Internet access in Europe; however, in the U.S. there is more balance between DSL and cable networks, as well as a higher percentage of other wireline technologies such as fiber. Layton stated that, “technology development is driving competition in the USA;” it is the level of technology that drives competition, not the number of competitors.”


In 2008 people were convinced that the US had taken the wrong path and that Europe had it right with unbundling policies, however recent events have proven that the U.S. is ahead of Europe, said Eisenach.  The Telecomm Act led to the development of our present diversity of service providers; The US also provides much needed higher levels of speed and capability; more Americans are buying more devices and using them more than individuals in the EU do.  While some point out that the EU pays less per month for service, they also have a lot less choices.  


The specific services utilized by American that provide them with an edge in productivity when compared to their European counterparts.  Bennett explained that 19% of American homes have access to a fiber to the home product, like Verizon FIOS .  In the United States companies are installing roughly 19 million miles of fiber each year for the last two years, which is more than Europe as a whole.


The US connectivity mix is continually expanding, offering more services, and a variety of connection options. AT&T’s U-VERSE and CenturyLink are increasing deployment of VDSL 2+ in the US, which reduces the length of the copper loop by replacing part of the copper with fiber.  Thereby consumers are able to get faster speeds and transmit more data if they need to.  Bennett noted that these advances would be difficult in an unbundled system such as Europe because it would require coordination with all the small business ISPs, however in the U.S., AT&T or CenturyLink simply have to pull the fiber out and install the node. 


It is also of note that these fiber-based services are gaining subscribers faster than DSL service is.

This expert ITIF panel provided some excellent insight into the advancement of the U.S. telecommunications industry in comparison to the European telecommunications industry.  Furthermore, the panel was able to elaborate on the strengths of the U.S. telecomm industry, while delving into some of the opportunities the U.S. industry still has to harness.  A complete video of the panel can be found here.

Additionally, yesterday the New York Times published an op-ed by Lowell McAdams, Chairman and CEO of Verizon, who provided a complementary opinion to those of the members of the ITIF panel.  McAdams discussed how Verizon, along with some of its competitors such as AT&T, Comcast, and Time Warner Cable, are investing in infrastructure.  He also mentioned the high level of smartphone use in America, stating "fifty-six percent of American adults have smartphones that give them access to mobile broadband data and video. Our country is the center of a booming mobile ecosystem in which new devices and applications are being used to do everything from personal health monitoring and e-commerce to tracking deliveries and saving energy."  Inversely, McAdams believes, the EU networks have grown stagnate due to regulations placed on investment and innovation.  Like Eisenach had discussed, McAdams suggests the Telecommunications Act of 1996 sparked the start of network investment in the U.S.  McAdams further elaberates and explains that the absence of "heavy-handed" regulations over the past two decades on broadband networks allowed them to develop into their current state. The complete op-ed can be found here.