Advocates for increasing regulation of broadband providers in the United States frequently point to Europe’s highly regulated broadband market as an example the US should emulate — if only their claims were true. A new research report prepared by a PhD fellow in Internet economics at Aalborg University in Denmark concludes that, “The data unequivocally demonstrate that the US exceeds the EU [European Union] on a number of important broadband measures.”
The most dramatic difference is in the availability of high-speed Internet technologies, including Internet speeds of 100 Mbps or greater, fourth generation (4G) wireless LTE broadband, fiber to the home (FTTH), and broadband over cable systems. This chart comparing the availability of broadband technologies, which uses data from the report, illustrates the stark differences between broadband deployment in the US and the EU. (Click on the chart to enlarge it.)
Europe’s struggle with broadband availability is largely due to the lack of private investment in broadband infrastructure within the EU. The report notes that several major EU companies have decided to invest in expansion abroad rather than within the EU itself. In contrast, US broadband providers, who are subject to less invasive regulation than their European counterparts, have concentrated their investments at home and have consistently ranked among the largest capital investors in the United States (AT&T ranks number one and Verizon is in the top 5). As a result, broadband providers have invested nearly twice as much in the United States as their European counterparts have invested in the EU. It is no mere coincidence that broadband capital investment in the US and the EU began diverging sharply in 2005 — the year in which the Federal Communications Commission (FCC) deregulated broadband services provided by US telephone companies. (To see the difference, take a look at Figure 1 in the report.)
The report also compared prices between premium cable broadband services in the US and in Denmark to debunk the myth that broadband services cost more in America. The report concludes that, when applicable taxes and fees are considered — e.g., the 25% “value-added” tax and compulsory “media license” fees imposed by the Danish government — Danish subscribers pay 35% more than Americans for a similar package of services.
The data aptly illustrates that, as a result of America’s pro-investment policies, more Americans enjoy access to greater broadband speeds than their European counterparts — without paying higher prices. That’s great news for US consumers and further proof that pro-investment policies work.