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You are here: Home / World Wide Web / Lagging Broadband Hurts Economy
Lagging Broadband in U.S. Damages Economy
Lagging Broadband in U.S. Damages Economy
By Peter Piazza / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
The broadband gap usually refers to the many people, particularly in rural areas, who have no access to high-speed Internet services. But there's another gap as well -- how the Federal Communications Commission defines "broadband" and how most of us define it.

The FCC still defines broadband as 200 kilobits per second (Kbps). If you think that's fast, consider that it would take a 256 Kbps connection more than 13 hours to download a 1.5GB movie.

The U.S. continues to lag many other countries in terms of broadband rollout. New research from Tellabs, which makes telecommunications infrastructure equipment, shows that while broadband is widely considered a critical asset for business in the 21st century, the U.S. needs to take steps to widen availability, and to update the definition of broadband to match business requirements.

Where the U.S. fits in terms of broadband penetration depends on who you ask and how the numbers are tallied, but it is not particularly high.

Research last year by the Organization for Economic Co-operation and Development noted that the U.S. has the largest broadband market of OECD countries with more than 66 million subscribers, but its broadband penetration was halfway down a list of 30 countries. The Information Technology and Innovation Foundation's figures put the U.S. at number 12, behind Korea, Japan, eight European and Scandinavian countries, and Canada.

Broadband Gap Hurts the Economy

Most of those surveyed (89 percent) by Tellabs said the lack of broadband damages the education and employment potential of those living in areas where broadband isn't available or affordable. More than eight in 10 of those surveyed felt that the FCC's Universal Service Fund, which provides federal money to alleviate the cost of telecommunications in underserved areas, should be used to expand rural broadband availability.

Expanding broadband isn't just about fairness. Research shows it could be a huge economic shot in the arm, said Mike O'Malley, director of external marketing at Tellabs. "A group called Connected Nation recently announced a study where they compared progress made expanding broadband in the state of Kentucky to the country at large. Their analysis showed expanding broadband would pump more money into the American economy than the recent tax-stimulus package passed by Congress." In fact, the group estimated an economic stimulus of $134 billion from "a modest increase in broadband adoption."

Redefining Broadband

The Tellabs survey of 451 telecommunications-industry professionals revealed that almost everybody believes broadband is an essential component of Web 2.0. And 84 percent of respondents noted that it's a "serious problem" when the U.S. lags so many other nations.

The first step might be redefining broadband to ensure it means what most people think it means. In the Tellabs survey, 84 percent agreed that a better definition would be "a service that can deliver high-quality streaming video."

Redefining broadband is important to small and midsize businesses (SMB), O'Malley said. "They are too small to afford private-line services, and carrier Ethernet hasn't been deployed widely yet." Once the definition becomes more realistic, so will the picture of how many Americans in fact have broadband.

"Large enterprises already have high-speed broadband," O'Malley said, "so a lot of the companies that stand to gain from expanded availability are SMBs."

The FCC has acknowledged that its definition is inadequate. A year ago, FCC Commissioner Michael J. Copps noted that this measure "was outdated even when it was introduced years ago, and that has become increasingly untenable today." But the definition of 200 Kbps remains on the FCC's Web site.

Image credit: iStock/Artist's Concept.

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