U.S. Gets Points For Telecom Policy
April 9th, 2008 by Peter SudermanTurns out all the criticism of U.S. broadband policy (Obama mentioned in in a recent speech) may not be warranted. According to the New York Times, “European researchers say that the Internet infrastructure of the United States is one of the world’s best and getting better.”
How does the U.S. stay ahead despite somewhat lower average connection speeds? Sayeth one of the researchers to the NYT:
[Soumitra Dutta, a professor of information systems at Insead] pointed to France as a country that was a technology leader in terms of network services that had trailed in the study, ranked at 21. “It’s not because France is lacking in technology,” Professor Dutta said. “If you look at other kinds of regulatory issues and labor conditions, you find a rigid situation that prohibits companies from making the most effective use of technology.”
In other words, regulation matters, and the less rigid regs found in the U.S. mean we’re able to take better advantage of the network we have. And then there’s always the fact that our lower population density, as well as sheer size, makes achieving the same sort of service as in, say, Japan, not terribly feasible. Comparing telecom services in the U.S. to in tiny countries just doesn’t make any sense. You’d be better off comparing Japan to New York City or L.A. rather than to the U.S. as a whole.
April 9th, 2008 at 4:39 pm
Just to clarify what you said above. The article does not, in fact, say that “less rigid regs” allow us to “take better advantage of the network we have.” In the very next paragraph after the one you quoted, the author of the article expands on this theme:
In other words, they couldn’t draw the conclusion you drew, that is was our “less rigid regs” that made us do better (remember, we’re still behind a number of European countries). Instead, the economist suggests that it’s the lack of competition in the U.S. that makes things more efficient, since “bundling” allows the creation of virtual monopolies for computing hardware, software, and services. The Europeans don’t allow bundling, so consumers have more choices over there than Americans do here. More choices mean a less-streamlined infrastructure, and is actually a good indicator of the health and diversity of the market.
The question is whether or not you think consumer choice is more important than protecting monopolistic practices, which is an entirely debatable point. Also, the study did not exactly debunk prior studies which were of a purely technical nature, and which will not go away.