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Policy Issues

The Case for a National Broadband Policy

By Robert D. Atkinson
June 15, 2007

It’s hard to pick up a business or technology magazine without reading how the United States is falling behind in broadband telecommunications. After the requisite bemoaning of our low and falling rank, these articles usually close with a vague and ill-defined plea for policy makers to do more to accelerate broadband deployment and take-up.

What is all too often missing from the debate over broadband is a case for why public policy should focus on broadband. After all, a host of other cool digital technologies have been recently introduced, but there is no talk of an iPod gap or the need for a national Blu-Ray player strategy. But broadband is different in two key ways. First, it is a not just a consumer technology like the iPod or Blu-Ray player, it is “prosumer” technology that is enabling consumers to also be producers who contribute to economic growth and innovation. Second, it exhibits positive network externalities where the benefits from broadband adoption accrue not just to individual consumers, but to other broadband users and society as a whole. Because of this the social returns from investing in more broadband exceed the private returns of companies and consumers. As a result, market forces alone will not generate the societally optimal level of broadband, at least for the foreseeable future. In markets like this public policies – in this case a proactive national broadband strategy – are needed to maximize overall societal welfare.

This paper makes the case for proactive public policy support of broadband telecommunications. It first examines whether the United States has fallen behind in broadband. It then discusses four reasons why leaving it to the market alone is likely to lead to slower deployment and take up of broadband, especially next generation, high speed broadband:

1) network externalities;

2) “prosumer” investment externalities;

3) competitiveness externalities; and

4) regional externalities.

Read the full text of this report (PDF)

Related Links

"The Role of Competition in a National Broadband Policy"
October 19, 2007
Recent report examining the importance of competition in broadband.

"Building the Broadband Economy and Society: A Forum"
October 19, 2007
See video and other details from recent ITIF Forum.

"C-SPAN’s The Communicators: Broadband Internet Access"
July 7, 2007
ITIF President Robert Atkinson and Scott Wallsten of Progress and Freedom Foundation discuss broadband on C-SPAN’s new show, The Communicators. Click here for streaming video (RealPlayer).

"ITIF Debate: Is the United States Falling Behind in Broadband?"
June 15, 2007
See video, presentation slides, and other details from recent ITIF Debate.

"Broadband Blues"
June 4, 2007
Rob Atkinson’s Huffington Post blog entry outlining the need for proactive broadband policies to address America’s lagging broadband.

"Assessing Broadband in America: OECD and ITIF Broadband Rankings"
April 24, 2007
An examination of international broadband rankings, including the ITIF Broadband Rankings, which measure penetration, price and speed. The report also outlines several steps policymakers should take to reach the goal of high-speed ubiquitous broadband.

"Experts: Better Broadband Stats Needed" PC World, June 28, 2007