By: Katie McAuliffe
Germany’s failure to incentivize private companies to invest in broadband infrastructure and deployment has led to them having very poor internet access. This should serve as an example to US policymakers who think that broadband networks can magically materialize by ignoring private sector investment in broadband. This failure is inventible if you focus on a single model and a single technology for broadband deployment.
Germany’s Broadband Failures
Reports have increasingly shown that US broadband is superior to broadband found in the EU. This is often attributed to the US’s use of private sector deployment over burdensome government regulation.
Outside of major cities, broadband access is low in Germany, and while it has been that way for years, the pandemic made the issues much more substantial.
In terms of fixed broadband speeds Germany ranks 35th in the world, and they rank 29th for mobile speeds. For a point of comparison, the US ranks 18th and 11th respectively, and is continuing to improve annually.
Remedying the Situation
In an attempt to remedy the situation, Germany is preparing into implement a subsidy system that would support household purchases of the hardware necessary to utilize Elon Musk’s Starlink. Starlink is a network of almost 1,500 satellites that provide internet access to users across the globe. The internet speeds provided by Starlink are about 100 Mbps.
The program would allow households to receive up to $650 that would go to the purchase of necessary hardware for any high-speed wireless provider. Estimates show that the program could cost up to €100 million. The grant money could go to up to 200,000 rural households across Germany.
Lessons for US Policymakers
The major errors in Germany’s broadband deployment efforts should serve as an example to US policymakers as they look for ways to bridge the digital divide. They need to not prioritize just one form of technology, but instead embrace all of our technological tools. There are many ways to deliver broadband, each with their own strengths and weaknesses that might make one technology better suited for an area over another.
Germany also serves to teach us how a heavy-handed approach to broadband regulation only crushes innovation and kills investement. Europe regulates its internet in what would be called a “Title II” approach. This approach has led to Germany’s low ranking in broadband speed. Additionally, when the U.S. followed a similar approach for a handful years, we saw our investment in broadband decrease for two consecutive years as well.
This pattern of investment has real consequences. During the pandemic European networks were unable to handle the surge of internet traffic that came from remote work, remote learning, telehealth and entertainment. Speeds in Europe fell during the pandemic and ISP’s were throttling traffic of video streaming to prevent network overloads. This is contrasted to the U.S. where our networks out-performed expectations. Our networks withstood 40 to 60% increases in internet traffic. Our speeds remained high and our networks were not restricted.
This path we chose to regulate our internet matters. As we look towards policies that will close the digital divide, we should be more cautious of plans that merely want to mimic the European approach, without looking at results of that approach.
Photo credit: Christian Wiediger