Yet Another Study Proclaims U.S. Broadband Awesome If You Intentionally Ignore All The Warts

from the damn-lies-and-statistics dept

To be clear, the United States is indisputably mediocre when it comes to broadband. It doesn't really matter if you look at data from FCC, the the OECD, OOkla's Net Index or walk next door and ask your neighbor. We're average or worse on metrics like speed (three quarters of the country has no competitive option at speeds faster than 25 Mbps), penetration, price and adoption, and we're among the worst anywhere when it comes to customer service. In fact U.S. broadband customer service is so bad, people rank the IRS, banking industry, insurance companies and the airlines higher.

That said, it's endlessly amusing to watch the broadband industry (and its varied assortment of fauxcademics, sock puppets, think tankers, lobbyists and PR tendrils) time and time and time again declare that U.S. broadband is secretly incredibly awesome, and the people stuck paying $100 for a sub 3 Mbps DSL connection and mandatory (though unwanted) landline aren't looking at the numbers right.

The latest study of this type comes courtesy of our friends over at the Verizon, Comcast and AT&T funded American Enterprise Institute, whose latest analysis (pdf) compares U.S. broadband to only other G7 countries, since a broader global comparison makes us look worse. Unsurprisingly, the AEI finds we're competitive under this criteria if you look at specific metrics in just the right way, ignore all previous studies, tilt your head just the right way, and ignore the industry's awful customer service. The study resulted in websites like Vox recently running articles with headlines like "American broadband is better than you think." Much of the AEI data is sound, it's just highly selective and selectively re-arranged.

For example the study is quick to point out that the United States has done a better job at deploying the latest DOCSIS 3.0 cable network upgrades than other G7 countries. That's not particularly surprising. The predominant connectivity option overseas is DSL, which costs significantly more to upgrade to fiber to the home, while U.S. cable networks were relatively inexpensive to upgrade to DOCSIS 3.0 (Comcast is on record stating DOCSIS 3.0 upgrade costs were "the kind of money we can find in the sofa cushions"). The fact that we're leading in a highly specific metric certainly makes a very lovely chart:
The fact the United States leads in DOCSIS 3.0 deployment becomes less sexy when you realize that two-thirds of U.S. consumers still only have one competitive choice when it comes to speeds above 25 Mbps. That one choice is thanks to (you guessed it) DOCSIS 3.0 upgrades, which while an improvement still lag on the upstream side of the equation, which is why your cable speeds tend to be so top heavy (say 30 Mbps downstream, 2 Mbps upstream). But while the United States has more cable in the ground than Europe sounds nice, it's kind of like observing that Europe has different trees. It's perhaps notable, but doesn't refute U.S. broadband mediocrity. Also worth noting (since the study doesn't): companies like AT&T and Verizon in the U.S. are simply giving up on DSL in many markets, leaving cable the only game in town.

Similarly, the study makes a big deal out of the fact the United States leads many G7 countries when it comes to the number of total fiber based connections, a metric that includes fiber to the home connections like Google Fiber, and the slower and much less costly fiber to the node connections like AT&T U-Verse. Of course, all G7 countries (sans Japan) have struggled with broad fiber deployment, since it's very fashionable to throw subsidies at your regional incumbent telco for fiber, then hope for the best. According to the Fiber to the Home Council website, there are now 640,000 North American households receiving fiber to the home service with connection speeds of at least 100 megabits per second after a generation of broadband subsidies. Hooray for us, I guess?

The study makes light of all price studies that came before it, arguing that every earlier study and stat firm in the world managed to get their broadband price calculations wrong, but a think tank employed in part by the nation's largest ISPs has cornered the market on sound broadband pricing analysis. AEI appears to be largely fixated on a recent study by the Open Technology Institute, which noted that U.S. cities are falling behind when it comes to broadband pricing (with the exception of cities that build their own networks like Chattanooga):
"Our findings show that the average cost of plans in nearly every speed tier we selected is higher in the U.S. than in Europe, and seven of the nine U.S. cities surveyed for the report have average prices that are higher than the median for plans offered between 25 and 50 Mbps download speeds...We found similar results when comparing the average speed of plans ranging from $35 to $50, and the average data cap for mobile broadband plans ranging from $35 to $45."
U.S. incumbent broadband pricing has long taken a particular beating when compared to places like Paris, where regulators took our discarded idea of local loop unbundling (opening up the incumbent networks to third party competition) and made it work. The result? Stories like this, where people visit Paris and are shocked to learn that Parisians can get 100 Mbps broadband, 250 cable channels, home phone service and a wireless phone with 3 GB of data -- for $63 a month. Yet to hear the AEI study author tell it in a blog post, France got it wrong, and the U.S. (where those same services will likely run you $250 or more a month) has it oh so right:
"In reality, the nations that have treated broadband networks as public utilities are high on promises and low on results. France and Italy are the truest examples of the utility model for broadband; wired broadband in France is no faster than mobile broadband, and Italy has the slowest networks in the G7. Both Italy and France have promised heavy subsidies to broadband carriers for upgraded networks, but austerity measures and other budget constraints have prevented the subsidies from materializing. Overall, broadband users in the US, Japan, and Canada have the best services, and those in Germany, France, and Italy have the worst among G7 nations. Careful examination of the data shows that the US is fundamentally on the right track; policy makers are well advised to stay the course."
Stay the course! Maintain the status quo! Ignore the lumpy fat man behind the curtain! The study takes the very long way home to ultimately conclude that America's actually doing a really good job at broadband, and therefore the sector should be deregulated even further. Obviously you can manipulate any data set with enough elbow grease and pie charts. That certainly works for broadband, at least until you actually go visit some of these duopoly markets (like my former hometown of Binghamton, NY) where your only choice is aging, over-priced DSL, or slightly faster, over-priced cable service -- both with an extra helping of abysmal service and disdain for the customer.

Everybody all together now: we're number one! We're number one! We're number one!

Filed Under: broadband, cost, g7, selective reasoning, speeds, study, us


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  • icon
    Daniel Berninger (profile), 5 Dec 2014 @ 5:32am

    How do we improve broadband outcomes?

    Karl,

    Your complaint list pursues the same selective comparison model you accuse the broadband survey of following.

    The conversation is old - "you suck, no were great, no you suck..."

    Let's try something new and just ask the direct question.

    How do we improve broadband outcomes?

    Google Fiber illustrated the benefits of ending the adversarial model between operator, public, and government. One can argue about the extent the results generalize, but it seems like a significant contribution to new ideas.

    We can keep ourselves busy accumulating lessons learned from these experiments.

    The zero sum environment of the telephone network no longer exists - sell the same product for decades with the game merely reducing costs, raising prices, and maximizing share. Maximizing the value of an IP network requires maximizing the functionality of a network - which therefore aligns the interests of end users and network operators. Moore's Law improvement in the equipment sector makes expanding capacity the least expensive way to attract usage and expand average revenue.

    Progress relative to the theoretical advance of Moore's Law provides an objective point of reference. Internet connectivity moved from the Hayes 300 baud (bps) modem in 1982 to an 11.1 Mbps (US average per Akamai) in Q1 2014. Computing moved from the Intel the 80286 with 134,000 transistors in 1982 to the 1.4 billion transistor Intel Core i5 processor in the most recent iMac. Bandwidth expanded by a (larger) factor of 37,000 as computing expanded by 10,447 over the last thirty years.

    The progress owes to the non-regulated information services status of both computing and Internet connectivity. The Title II side of communication made precisely no progress from the perspective of the end user value proposition over the same period.

    The unfortunate track record of Title II regulation is self-evident regarding the pace of progress. The namesake Moore's Law was funded by a monopoly (Moore co-founded Intel), because expanding capacity expands addressable market and offers a sustainable means of growth.

    Let's get beyond name calling and just ask the direct question - how do we improve broadband outcomes?

    If you want to end the non-regulation of IP networks by applying Title II, then you need to deal with the 80 year innovation free track record of domains under Title II regulation.

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    • icon
      Violynne (profile), 5 Dec 2014 @ 6:17am

      Re: How do we improve broadband outcomes?

      This has been my argument for over two years. Writing to the FCC is a pure waste of time, as only Congress can fix what's truly broken.

      We can't sit idly by and allow outdated laws to regulate an infrastructure that isn't covered by them. Title II isn't the answer, even if it's deemed "one step in the right direction".

      The mere fact only a small clause in Title II will be applied (if it goes that way) says there's a problem inherent with Title II's broad classification as a communication law.

      In fact, the entire purpose of Title II's existence is to prevent communications from being monopolized in the first place, which fails to do its job when there are only a handful of communication companies to begin with, each doing the same practice of over-charging consumes for a basic service and giving them no choice save a brand name.

      Sadly, Americans will simply have no choice or alternatives but to pay for crap service, bad customer support, and copyright control because they're not lobbyists. Instead, the lobbyists win with attempts like "6 strikes" and "SOPA" while charging $200/mo for the privilege of having their services throttled.

      The entire industry is corrupt, price-fixed, and price-gouged, yet the very government's power to prevent this is actually being used to support it.

      If you want the answer to "how to fix broadband", it's going to have to come from Americans willing to crowd-fund their own corporations to lay new fiber and build new data centers, because trying to push it municipally will fail as these greedy corporations interfere, as we've seen with AT&T and a small town in Kansas.

      It's the only way, because shareholders won't allow any other choice.

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    • icon
      John Fenderson (profile), 5 Dec 2014 @ 6:57am

      Re: How do we improve broadband outcomes?

      "How do we improve broadband outcomes?"

      By getting a competitive market. Unfortunately, it doesn't appear that there's a way to get there. Lacking that, regulatory solutions are the only other option.

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    • identicon
      Rich Kulawiec, 5 Dec 2014 @ 7:34am

      Re: How do we improve broadband outcomes?

      A Modest Proposal.

      It should, at this point, be blindingly obvious to even the casual observer that expecting corporations to solve this national infrastructure problem is a non-starter. They haven't. They're not. They won't.

      It will never happen no matter what the FCC or Congress or any other governmental agency does. The corporations will spend billions (on lobbyists and lawyers and payoffXXXXXXgifts) not doing it.

      So: nationalize them. Yes, yes, yes, I know about the kazillion problems that entails but it's worked out pretty well for the interstate highway system, and I think a decent argument can be made that this infrastructure is just as critical to the economy, to education, to communication, to everything else. The federal government has its issues, but one thing that it's displayed competence (sometimes erratic competence) at is maintaining large-scale infrastructure. Even the dysfunctional FAA works -- mostly.

      Yes, yes, yes, I know that every three-letter-agency will take advantage of this to wiretap the hell out of it. How, exactly, is that different from the current situation?

      Yes, yes, yes, I think some of it could be delegated to states and municipalities who have built or are building or want to build their own. That's fine. Do it.

      Yes, yes, yes I know that this will put some companies out of business. Too bad. The needs of the many outweigh the needs of the few. We simply can't afford this any more: the industry as a whole has failed the nation. (Can you imagine what driving from Philly to Chicago would be like if Comcast, AT&T, Verizon and Charter operated the highways?)

      Now...of course we know that some of these corporations would be unhappy about this. And that is where the second part of this Modest Proposal comes into play. You see, we have another pressing problem: the militarization of police forces across the country. But here's a use for them: load up the MRAP and get the riot gear and the automatic weapons and the LRAD and whatever else they have sitting around (apparently the LA police have lots of snowshoes courtesy of the feds, not sure how to use those, but okay) and roll it up to the HQ of any that decline to participate.

      This will give the police something useful to do and I'm reasonably sure that even the most tenacious duopoly executive will think twice about refusing if there's a howitzer outside the building. (Do they have howitzers? I dunno. Whatever. They have big things that go boom, same difference.)

      Now you, dear reader, might be saying "But what if?" and you know, you're right: what if? But I submit that this would simultaneously address two problems of note and -- if nothing else -- it would give us all the satisfaction of watching the Cxx-level staff of the duopoly frog-marched out of their cushy offices. I think that alone is well worth the cost, don't you?

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      • icon
        tqk (profile), 5 Dec 2014 @ 12:20pm

        Re: Re: How do we improve broadband outcomes?

        So: nationalize them.

        Seriously, go talk to your doctor. You need those prescription dosages adjusted.

        Presidential assassinations are not funny, and that is what you're leading to. Obama nationalizing the telcos/ISPs? "They've cum tuh take are intartubes!"

        It's also silly. You need to get rid of all the crap which leads to mono/duopoly, that's all. Make the buggers compete, or go out of business! That will take care of the Cxx-level moochers you'd love to get back at. Leave that to competitive market forces.

        Then again, Squeaky Fromm and Gerald Ford was pretty comical, but still, don't go there. The last one was ugly and went on ugly for years afterward.

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        • identicon
          Rich Kulawiec, 5 Dec 2014 @ 2:05pm

          Re: Re: Re: How do we improve broadband outcomes?

          You haven't read Swift, have you? Please see: https://en.wikipedia.org/wiki/A_Modest_Proposal and then perhaps my intent will become clear.

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        • identicon
          Pragmatic, 8 Dec 2014 @ 5:24am

          Re: Re: Re: How do we improve broadband outcomes?

          You're right in principle, tqk, but how do you make a sewn-up market competitve? We can't trade or boycott our way there. I say, "Break 'em up."

          I actually have no problem with a govt.-run telco as long as other companies are allowed to compete on an equal basis. This would cause them to compete on service, thereby improving everything for everyone.

          All monopolies are bad on principle, whoever is running it.

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          • identicon
            Pragmatic, 8 Dec 2014 @ 5:24am

            Re: Re: Re: Re: How do we improve broadband outcomes?

            ...whoever is running it.*

            *them.

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          • icon
            tqk (profile), 8 Dec 2014 @ 8:38am

            Re: Re: Re: Re: How do we improve broadband outcomes?

            ... how do you make a sewn-up market competitve?

            I thought Karl's answer to that was correct. The FCC ought to have 'em by the cojones. They were given their position in the market for a quid pro quo. Fine the pants off 'em until they start holding up their end of the bargain.
            All monopolies are bad on principle ...

            I *still* don't agree with that. There's nothing wrong with a natural monopoly. They get there by serving the customer better than any competitors could, and they do it without favors from legislators. The alternative is unnatural monopoly, and those are bad.

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      • icon
        That One Guy (profile), 5 Dec 2014 @ 2:32pm

        Re: Re: How do we improve broadband outcomes?

        As an added bonus regarding the second part, I don't imagine anyone would be shedding any tears if the police decided to play 'Pin the truncheon on the CEO', so the police would get to exercise those arm muscles in an approved fashion, instead of on some random citizen.

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  • icon
    Karl Bode (profile), 5 Dec 2014 @ 5:41am

    Let's get beyond name calling and just ask the direct question - how do we improve broadband outcomes?
    One, I think insisting that all I've done is "name calling" is disingenuous and intentionally dismissive of what you just read. Two, you act as if I've never talked about this when I've repeatedly pointed out where we start. Stop letting AT&T, Verizon and Comcast write state telecom law, and stop doling out billions in subsidies to giant companies we then let ignore their obligations. The solution isn't recombinant gene technology or rocket science. It doesn't even require a full paragraph.

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  • identicon
    Anonymous Coward, 5 Dec 2014 @ 6:46am

    Both Italy and France have promised heavy subsidies to broadband carriers for upgraded networks, but austerity measures and other budget constraints have prevented the subsidies from materializing
    This is an incredibly rich statement coming from the likes of a pro-austerity think tank.

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  • identicon
    Anonymous Coward, 5 Dec 2014 @ 6:54am

    "American broadband is better than you think."

    Hmm how do I put this...
    Perhaps the problem lies in why people think American Broadband is bad and that telling them that their experiences are wrong is probably not going to make them suddenly realize things are dandy.

    Telling people their broadband is Dandy A+ Okay! when they've been jerked around at every turn is not going to change their mind.

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  • icon
    John Fenderson (profile), 5 Dec 2014 @ 7:00am

    I'd take that

    In reality, the nations that have treated broadband networks as public utilities are high on promises and low on results. France and Italy are the truest examples of the utility model for broadband; wired broadband in France is no faster than mobile broadband, and Italy has the slowest networks in the G7.


    For most people (including me), unaffordable but speedy service is a worse option than affordable, less speedy service. Between France's model and the US model, France's appears to be the better solution.

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    • identicon
      Michael, 5 Dec 2014 @ 7:04am

      Re: I'd take that

      wired broadband in France is no faster than mobile broadband

      ...and both are faster than what is available for me...

      Italy has the slowest networks in the G7

      If you have been to Italy you would know that they are pretty ok with moving slowly.

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  • identicon
    Just Another Anonymous Troll, 5 Dec 2014 @ 7:05am

    We're number one?
    *raises middle finger*

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  • icon
    PaulT (profile), 5 Dec 2014 @ 7:32am

    "Stories like this, where people visit Paris and are shocked to learn that Parisians"

    Erm, the author mentions repeatedly that he's in Toulouse. Toulouse is a city near the south of France, about 650km (400 miles) away from Paris.

    I'm sure that's insignificant in American miles, but it's a huge difference to the locals. I've not been to Toulouse specifically, but the south of France tends to be culturally a long, long way away from the capital.

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    • icon
      Karl Bode (profile), 5 Dec 2014 @ 7:36am

      Re:

      Whoops, error on my part, thanks. Though I was recently in Paris and found the value of their bundles are comparable. I think the point still stands that claiming France is "low on results" is bunk. Their speed average is dragged down by the same thing ours is in the States -- rural DSL lines nobody wants to upgrade. They just have more of those DSL lines than we do, since cable never really took off in the same fashion.

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  • icon
    mattshow (profile), 5 Dec 2014 @ 7:55am

    US telecom critics might be amused to know that the CRTC (Canada's answer to the FCC) just finished a two week hearing on Canada's ISP regulatory regime. As is Canada's way, there were constant comparisons to Europe (in which ISPs are typically more regulated than Canada) and the US (in which ISPs are less regulated than Canada).

    The incumbent Canadian telephone and cable companies, who of course want less regulation, repeatedly held up the US as a shining example of telecom excellence and a case study in the beneficial effects of de-regulation.

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  • identicon
    Anonymous Coward, 5 Dec 2014 @ 8:33am

    If you think you have problems with your broadband, you should see the crap we have to put up here in brazil. Way worse than anything you can imagine. And of course, there is no signs of getting any better.

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  • icon
    John85851 (profile), 5 Dec 2014 @ 9:04am

    A study can get any result

    The great thing about studies and surveys is that they can be worded to get any result you desire.
    For example, they could ask the question "How much do you like your broadband company? From 'a little' to 'a lot'."

    There, every single person who took the survey said they liked their broadband company. Some people like it a little, some like it a lot, but they all like it.

    It's funny how a survey like this would never ask something like "Would you like a 50M connection for $10, like in other countries?".

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  • identicon
    me, 5 Dec 2014 @ 9:51am

    its so awesome

    Mine has been out since last night

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  • icon
    Matthew (profile), 5 Dec 2014 @ 10:01am

    He commissioned a study...

    Vladimir Putin commissioned a study to find out who the most awesome person in the world is and the results have just come back. Folks, he's as surprised as you are by this, but the answer is Vladimir Putin. This fair and completely objective assessment clearly shows that Putin is the most awesome person in the whole world. Kim Jong-un was a close second, followed distantly by Bashar al-Assad in third.

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  • identicon
    Anonymous Coward, 5 Dec 2014 @ 10:04am

    'aren't looking at the numbers right.'

    it makes no difference if you look at the figures while standing on your head or having a crap, 3mbs download speed is absolutely disgraceful!! no ISP can justify that disgraceful service, particularly when there has been millions of dollars of public money handed to the likes of Verizon and they still haven't found their ass while holding it in both hands!
    it's a shame that the government and Congress haven't got the balls to do anything about it, preferring, obviously, to ignore all the problems while sticking another check for a gazillion dollars from those same ISPs into the bank!!

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  • icon
    Groaker (profile), 5 Dec 2014 @ 11:07am

    It is not just OOKLA. The reputed US government broadband site speed test showed TWC running my downloads at 23Mbs when I had only paid for 6. And nothing was downloading as fast as 6Mbs.

    I sent complaints over this repeated anomaly to the Feds, but of course nothing happened.

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  • icon
    Jeffrey Nonken (profile), 5 Dec 2014 @ 3:47pm

    I'm in this little hick town in the middle of nowhere... it's called Rosemont. It's part of Sacramento, California.

    You know, the capitol of one of the largest states in the US, and that's supposed to be one of the best at technology.

    Fiber? Hah hah hah! I laugh at your pretention. I'm lucky to get DSL.

    My choices are: AT&T DSL or Comcast. I'm currently running Comcast. I've tried both. They both have their plusses and minuses.

    I recently called Customer Lack of Service because every time it rains, my Comcast Internet dies. So after poking through his script for 20 minutes, the drone's conclusion was that it's my MODEM. When I emphasized that it only happens when it rains, and it always happens when it rains, and he should send a tech to check the outside wiring, he blew me off. "Yep, we could do that too." Uh huh.

    And naturally during the course of all this, you do know what he did, right? Go on, you'll never guess. Correct, he tried to upsell me. He tried to sell me on higher speeds that I don't need and CATV that I don't want for more money, and he neglected to include the cost of renting the MODEM into the price. Of course. Oh, and it's a promotional price, so the cost would go up even farther a year from now.

    Because nothing says "Customer Service" like ignoring what your customers say and then trying to sell them more expensive product when they're obviously already pissed off about the product they have.

    Anyway, sorry about the rant, no I'm not really but whatever. I'm still waiting for AT&T to roll out fiber to Sacramento. AT&T are liars and cheats and thieves and I'm sorry if I've ever said anything nice about them.

    Checking... checking... yep. Still pissed off.

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    • icon
      That One Guy (profile), 5 Dec 2014 @ 5:57pm

      Re:

      But see, it's all those dastardly regulations getting in the way of them offering awesome customer service, if only the government would relax or remove the regulations they have to deal with, I'm sure their service and product would improve immediately! /s

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  • identicon
    spodula, 6 Dec 2014 @ 9:28am

    Another thing they have "forgotten"

    DOCSYS is a cable protocol. Most people in the UK use DSL or fibre lines, and don't have cable at all.

    I am currently using DSL at 4Mbs/0.7Mbs for about $24/mo (Mainly because i am out in the sticks a bit). However when I upgrade to Fibre (They have just fitted the boxes!) i expect to get closer to 100Mbs for about $40ish...

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  • icon
    Richard Bennett (profile), 8 Dec 2014 @ 7:27pm

    Amazingly weak article

    First, let me congratulate you for commenting on my study. While your post is less than illuminating, at least you didn't try to ignore my G-7 study; I suppose I can thank Vox.com for forcing your hand. The study is iconoclastic because undermines the credibility of the endless stories tech blogs like to run about how the man is keeping the hipsters down and it's soooooo much better in Europe. So there's that. Now let's take note of the outright falsehoods in your story.

    1. The United States is not "indisputably mediocre when it comes to broadband." I see this turn of phrase often in Bode/TechDirt articles when the author can't be bothered to make a provable claim. The US isn't "indisputably" anything in broadband as there's a lively debate about how to assess our standing and what the data actually show. But more importantly, even the sources that claim the US is less good than I find us to be tend to rate the US somewhere between 20th and 40th on measures such as download speed, subscription rate, or price/performance. That sounds bad until you realize that there are close to 200 nations in the world, so mediocre would be closer to 100th place than to first. The top quarter isn't "mediocre".

    2. You say "It doesn't really matter if you look at data from FCC, the the OECD, OOkla's [sic] Net Index or walk next door and ask your neighbor. We're average or worse on metrics like speed (three quarters of the country has no competitive option at speeds faster than 25 Mbps), penetration, price and adoption..." Yet I cite all the sources you mention, as well as Akamai, Cisco, the EU, SamKnows, ITU, Google, Merrill Lynch, Infonetics, the Boston Consulting Group, Ofcom, Japan's MIC, and Plum, and I don't find any support for the claim that we're in the bottom 100 in the world. And no, walking next door and asking your neighbor will not tell you anything meaningful about international standings unless your neighbor is a scholar, and the number of competitors has less to do with speed than does the nature of the competition. More on that to follow.

    3. You claim "The latest study of this type comes courtesy of our friends over at the Verizon, Comcast and AT&T funded American Enterprise Institute, whose latest analysis (pdf) compares U.S. broadband to only other G7 countries, since a broader global comparison makes us look worse."

    I focused on the G-7 in this study because this is a group of nations that are more closely comparable with the US than city states such as Hong Kong, Singapore, and South Korea, but I've covered the whole OECD in the past. In fact, comparing the US to the entire 194 countries in the world makes us look a lot better than simply comparing us to the rest of the G7, G20, or OECD does.

    4. You engage in ad hominem by claiming that I say "a think tank employed in part by the nation's largest ISPs has cornered the market on sound broadband pricing analysis" and that my study "makes light of all price studies that came before it." In the first place, AEI is not employed by anybody; it accepts donations from hundreds of contributors - most of whom are not even known to me - and I did not consult with a single one about this study.

    It's also false to claim I make light of all previous pricing studies. I analyze most of them - including the credulous OTI report that takes advertising claims as reality - and I criticize some of their methods. In particular, I find that a dollars/Mbps analysis is less meaningful than a bit miles analysis.

    Rather than making light of the OTI and some OECD studies that have used the wrong yardstick, I explain why I think measuring traffic and miles of cable is more meaningful. YMMV about which metric is more informative, but I show the math: wiring a Hong Kong apartment with fiber costs $200, but pulling fiber in the suburbs costs closer to $1000/home. That's a fact.

    5. You say I claim "we're competitive under this criteria if you look at specific metrics in just the right way, ignore all previous studies, tilt your head just the right way, and ignore the industry's awful customer service." If this were the case, why would I cite the OTI, Ookla, and OECD studies you praise? I looked at every bit of public data I could find, and generated 70 charts and graphs showing how the various studies rank us. I refrained from making any claims that aren't supported by more than one source, and in most cases I use three or more sources before making any claims.

    6. Your comments on cable are strangely inconsistent. On the one hand, you admit that cable modem is faster than the DSL that accounts for 80% of Europe's broadband connections, but on the other hand you say observing "United States has more cable in the ground than Europe sounds nice, [but] it's kind of like observing that Europe has different trees". When we're assessing speed, technologies matter, and cable affords the speeds that policy analysis classifies as "next generation broadband", 25 Mbps downloads or better. Because the US has more cable than Europe and Japan, we can employ different regulatory models to achieve performance-based competition, something that's lacking in most nations, including most of Europe where retail ISPs can only compete on price since they use the incumbent's DSL wires.

    7. You claim I make a big deal over the fact that the "United States leads many G7 countries when it comes to the number of total fiber based connections, a metric that includes fiber to the home connections like Google Fiber, and the slower and much less costly fiber to the node connections like AT&T U-Verse." I follow the FCC/NTIA convention of excluding VDSL systems like U-Verse from fiber connections and only count genuine FTTH/B. This departs from the European convention that counts VDSL as "FTTx". The US leads all of the G7 on FTTH except Japan, where it's essentially universal. In fact, the US has twice as much FTTH as Europe's G7 nations have, and we continue to install more fiber miles each year than does the EU as a whole.

    8. You make the false claim that Local Loop Unbundling leads to higher speeds and lower prices: "U.S. incumbent broadband pricing has long taken a particular beating when compared to places like Paris, where regulators took our discarded idea of local loop unbundling (opening up the incumbent networks to third party competition) and made it work. The result? Stories like this, where people visit Paris and are shocked to learn that Parisians can get 100 Mbps broadband, 250 cable channels, home phone service and a wireless phone with 3 GB of data -- for $63 a month."

    LLU is a system that allows retail ISPs to lease DSL from the incumbent, often at cost or below. There is not a single case of LLU for cable in the G7, and only one in the OECD (Denmark) so there's no way it affects these higher speed networks.

    Given that, there's certainly no way that LLU brings 100 Mbps services to anybody in the G7 unless FTTH is unbundled. I do a very thorough analysis of G7 FTTH policies and find that they're actually based on regulatory holidays from unbundling.

    In Japan, NTT-E/W will only lease fiber to a competitor in groups of 8 strands, which makes competition impractical. Germany and the UK also restrict access to FTTH for competitors, but there's very little FTTH in these nations to begin with: 2.6% of homes in Germany, 0.7% in UK, vs. 23% in the US. In fact, regulators in other countries incentivize fiber by copying the deregulatory US model for fiber while retaining LLU for DSL. This discourages upgrading to higher speeds because it makes DSL artificially cheap.

    9. Finally, you mention customer service several times, despite the fact that I make no mention of it. While it's certainly true that US carriers and utilities score low in customer service, even a quick Google search will show you that this is a global pattern. Nobody likes their carrier or utility, not even people in Europe and Asia, and but most people who use the Internet really like it. So there's no meaningful or measurable difference between the US and the rest of the world on that score, which is why I don't discuss it in the paper. In reality, telecoms are less reviled than actual public utilities in most nations.

    Conclusion: I realize that I've simply cited facts here and haven't made appeals to emotion. Having seen that facts and logic don't weigh heavily against emotion, I don't expect you to change your tune, but I take satisfaction in knowing that in the back of your mind you'll be aware that at least some of your readers are aware of the way they're being manipulated when they see your leaps of logic, your ad homs, and your non sequiturs.

    That pleases me.

    reply to this | link to this | view in chronology ]


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