GAO (United States Government Accountability Office)
[Reproduced from GAO document, GAO-10-825, September 2010, TELECOMMUNICATIONS] http://energycommerce.house.gov/index.php?option=com_content&view=article&id=2138:waxman-boucher-release-gao-report-on-global-broadband-deployment-and-adoption&catid=122:media-advisories&Itemid=55
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Report to Congressional Requesters
National Broadband Plan Reflects the Experiences of Leading Countries, but Implementation Will Be Challenging
- GAO analyzed relevant information for 30 developed countries that are members of the Organisation for Economic Cooperation and Development (OECD) and visited 7 of these countries selected for their broadband policies and economic or demographic characteristics. GAO also interviewed public- and private-sector ontacts in these countries and FCC officials. FCC provided technical comments on this report.
- This report addresses the following questions:
- What is the status of broadband deployment and adoption in developed countries?
- What actions have selected countries taken to increase broadband deployment and adoption?
- How do recommendations outlined in the National Broadband Plan reflect the actions of selected countries to increase broadband deployment and adoption?
- Consumers can receive a broadband connection to the Internet through a variety of technologies, including, but not limited to, the following:
- Cable modem
- Digital subscriber line (DSL)
- Wireless – Land-based, or terrestrial
- Fiber optic
- In 27 of the 30 OECD countries, including the United States, broadband has been deployed to 90 percent or more of households regardless of demographic or geographic differences. High rates of broadband deployment have been achieved despite geographic and financial differences among the OECD countries. However, not all OECD countries have overcome the same challenges in deploying broadband infrastructure. For example, in Denmark, which is one of the smallest and most densely populated OECD countries, with an average of 128 people per square kilometer, broadband has been deployed to 99 percent of households. Yet in the United States, which is 228 times larger geographically, and 56 times more populous, and which has an average of 32 people per square kilometer, broadband has been deployed to more than 95 percent of households.
- Three localities—Berkeley, California (18.730 Mbps); Chapel Hill, North Carolina (17.483 Mbps); and Stanford, California (16.956 Mbps)—offer the highest average broadband speeds in the world. In addition, 21 of the 100 top cities Akamai evaluated are in the United States.
- Seventeen OECD countries have broadband adoption rates that exceed the average of 23.3 subscriber lines per 100 inhabitants, 24 including the United States, at 26.4 subscriber lines.
- The United States has more subscribers than any other OECD country—81 million, or more than twice as many as Japan, which has 31 million, the second highest number of subscribers.
- Population is an important factor to consider when analyzing broadband adoption rates. For example, 7 of the 10 countries with the highest adoption rates are also among the 10 countries with the smallest populations.
- The seven countries (GAO selected—Canada, France, Japan, the Netherlands, South Korea, Sweden, and the United Kingdom) we selected as case studies, all of which had achieved higher levels of either broadband deployment or broadband adoption than the United States as of the fourth quarter of 2009, have taken similar actions to increase deployment and adoption—actions that stakeholders in these countries told us they considered effective. Through our case studies, we identified five overall categories of actions:
- establish plans and policies to guide deployment and provide leadership support,
- provide government funding through public/private partnerships,
- promote competition,
- implement strategies to make broadband services more available and useful to consumers, and
- provide digital literacy training and consumer subsidies.
- Japan adopted a plan in 2001 with the goal of providing speeds of up to 30 Mbps to at least 30 million households and speeds of up to 100 Mbps to at least 10 million households by 2005 and achieved this goal by 2003. In 2009, Japan adopted the e-Japan Strategy 2015 and set new target speeds of 1 Gbps for fixed networks.
- In 1997, Canada started the Government On-Line program to organize service and information around the needs of its people and businesses. Since 2002, through such programs as Broadband for Rural and Northern Development (BRAND) and Connecting Canadians, Canada has brought connectivity to rural and remote areas and achieved the goal of connecting public institutions, including schools and libraries, in all of Canada’s 4,000 communities.
- In 2009, the United Kingdom issued the Digital Britain plan, which calls for 100 percent availability of a connection capable of download speeds of at least 2 Mbps by 2012.
- In Sweden, from 2001 to 2007, the government adopted a policy of deploying broadband to rural areas lacking access, and, in 2008, 99 percent of households had access to some form of broadband. In 2009, the Swedish government adopted the Broadband Strategy for Sweden with the goal of ensuring that 90 percent of households have access to broadband speeds of at least 100 Mbps by 2020.
- In Korea, government officials cited their President’s constant emphasis on broadband initiatives as a factor that has helped to increase broadband adoption. In addition, the country’s ministries emphasize e-government services and often compete with each other to develop new Internet applications. Officials told us they have used public/private partnerships to help reduce the digital divide between urban and rural areas.
- In France, the government created the Office of the Digital Development Minister in March 2008 and made it responsible for crafting a national broadband strategy known as Digital France 2012.
- Japan’s Ministry of Information and Communications told us that, although 98.6 percent of households have broadband access, the government has instituted a public/private partnership program to support the establishment of broadband infrastructure in rural and remote areas where broadband service is not available and hopes to eliminate all areas without broadband access by the end of March 2011.
- In 2006, in order to stimulate economic growth, a large suburb of Paris, France, Hauts-de-Seine, issued a request for proposal; in 2007, Hauts-de-Seine hired a private company to deploy a fiber network to all its residents, enterprises, and public sites within 6 years and to operate the network as a shared fiber network, one open to all competitors.
- In Canada, in 2001, the City of Ottawa was amalgamated with several of its surrounding municipalities, and, within the new boundaries, 90 percent of the city’s landmass and 10 percent of its residents were rural. At that time in the rural areas, 2 percent of the residents had access to broadband. To bring broadband to the entire amalgamated area, in 2007, Ottawa entered into a partnership with a private broadband provider.
- Stokab, a municipally-owned fiber network, was founded in 1994. Stokab officials told us that the municipality of Stockholm had determined that fiber appeared to be the most viable technology for the foreseeable future, although the local telephone provider did not express any interest in deploying fiber infrastructure at that time. In addition, city officials told us they knew that if, in the future, multiple companies chose to provide fiber to the city, the streets could be dug up several times, causing disruption and damaging Stockholm’s historic buildings and cobblestone streets. To avoid such a scenario, Stockholm officials set up Stokab, which deploys and maintains the physical infrastructure and leases dark fiber35 to multiple businesses, which may use the fiber for their own business or to provide service to others.
- In Amsterdam, the Netherlands, in 2000, broadband service was widely available over cable and telephone lines, but there was no fiber to the home. Officials said they believed fiber would protect the city’s future competitiveness, although commercial companies did not want to invest in fiber at that time. Accordingly, in 2006, Amsterdam formed Glasvezel Amsterdam (GNA) to finance a fiber network in conjunction with private investors to provide broadband services throughout the city. The city is not a majority shareholder in GNA, and it is treated like any other private investor. GNA has deployed infrastructure to multiple dwelling units comprising 43,000 apartments and began a new roll out to another 100,000 homes in 2009.
- Two providers told us that they think it is unfair to use public funds to finance wireline broadband to compete with a company providing broadband over a satellite or wireless network in rural areas because there is not enough business in such areas to support one unsubsidized company.
- Officials at companies in Japan and Canada questioned the sustainability of government-funded projects and expressed concern about who would be responsible for maintaining government-funded infrastructure once the government funding is gone.
- Public officials have also expressed concern about the interoperability of municipal networks and have identified a need to provide some guidance to municipal personnel. Public officials in Sweden, the United Kingdom, and the Netherlands have suggested that uniform standards or some form of guidance from the central or national government would be helpful when localities are forming public/private partnerships to deploy broadband infrastructure.
- To ensure a national competitive market for wireline broadband services, six of seven countries have increased the level of competition in the provision of wireline broadband service through laws, regulations, or both, which require the incumbent telephone carrier to open its copper networks (the legacy infrastructure used to provide telephone service) and provide access to competitors at wholesale prices. This activity is commonly referred to as “unbundling.” Unbundling has been credited with giving most urban residents in France, the United Kingdom, Sweden, the Netherlands, and Japan a choice of three or more providers.
- Swedish authorities credit network unbundling with relatively low consumer prices and good service quality.
- Officials in the Netherlands told us that unbundling the local loop has stimulated competition, resulting in the deployment of DSL to more than 99 percent of the country’s households.
- Officials of the Office of Communications (Ofcom, UK), the telecommunications regulator, told us that, since unbundling, at least four additional operators have entered the British broadband market.
- In Korea, although unbundling has not increased competition, several companies are competing with incumbent providers by building their own networks. One company official attributed the limited success of unbundling in South Korea to difficulties in getting access to the incumbent’s network.
- Countries have also funded research to promote the use of broadband. For example,
- in the Netherlands, the government provided grants for three projects to promote high-speed broadband use to facilitate infrastructure deployment and service.
- Canada sponsors the Scientific Research and Experimental Development program, which provides federal tax incentives for Canadian businesses to conduct research and development in Canada that will lead to new, technologically advanced products or processes, including broadband technologies.