Americans Online In The Slow Lane

Americans are not ardent fans of the Winter Olympics, partly because the nation's athletes do not dominate the medal count. But a foreign competitor at the Games in Turin, Italy, this month demonstrates how the United States is falling behind in a different sort of race.

The competitor is not a skier or a figure skater -- or a person at all, but a new technology for wireless broadband Internet access developed in South Korea, called WiBro. And the race in question? How fast a country can provide its population with high-speed Internet access.

After ranking as high as third worldwide in 2000, the United States dropped to 16th last year for its number of high-speed Internet subscribers per capita, according to the International Telecommunication Union, with 11.4 broadband subscribers per 100 inhabitants. South Korea, the global leader, has 24.9 subscribers per 100 inhabitants, trailed by Hong Kong, the Netherlands, Denmark, Canada and Switzerland, which all have at least 17 subscribers per 100 inhabitants. Updated data is expected soon for 2006, and some predict the United States will fall out of the top 20.

The WiBro technology on display in Turin by Samsung Electronics Co. can transmit 30 megabits per second to a wireless tablet in what eventually could be a residential service. "They're already on to the next generation," says Jonathan Taplin, a professor at the Annenberg School for Communication at the University of Southern California.

Other countries may have higher percentages of people using broadband because of their dense populations, which makes it easier to build the necessary network infrastructure, but Canada's strong showing proves that government policy is another reason the United States has begun to lag behind.The government's role in overseeing the Internet has become a popular topic recently with the "Net neutrality" debate in Congress.

Cable and telecom providers want to be able to charge Google Inc., Yahoo Inc. and Microsoft Corp.'s MSN and other Internet companies for using their high-speed connections to the home. The other side argues that the Internet should remain a neutral playing field where no one pays a toll. Charging for the use of a broadband network would hamper innovation and make it more difficult for smaller companies to offer Web services, the Internet companies say.

Some consumer advocates fear that if broadband providers got their way, it would lead to higher monthly bills for consumers for high-speed Internet access, but Taplin and other academics dispute that.

"This notion of some grand battle between content owners and network owners, I think it's specious," Taplin says. "Network owners can partition bandwidth in such a way that everyone can have access to the Internet in a way we have today and provide some value-added services. There should be plenty of room for everyone to do what they want."

As proof that consumers shouldn't worry about their bills, Taplin cites the recent offers by Verizon, SBC Communications (before it merged with AT&T) and others to provide faster-than-dial-up access of up to 768 kilobits per second for $14.95 per month.He's also encouraged by results of a workshop on this issue at the Annenberg Center earlier this month in which business interests, regulators, academics and consumer advocates agreed on a set of principles for the industry, though the results won't be published for another couple weeks.Still, there's no doubt that the rate at which Americans are turning to high-speed access is slowing – almost to a crawl. Between December 2004 and May 2005, the number of home Internet users with high-speed connections climbed from 50 percent to 53 percent, according to a study last fall by the Pew Internet Project, which called it a "small and not statistically significant increase."

By contrast, two-thirds of Canadians have broadband access. Nearly one-third of American adults do not use the Internet at all, the study found; just 23 percent of those who came online in the previous year chose a high-speed connection.

After the initial rush to sign up customers for high-speed DSL and cable Internet service, the remaining dial-up users who haven't switched to faster service aren't attractive candidates to do so because they tend to be older, less educated, with lower income and relatively apathetic about using the Internet in the first place, says John B. Horrigan, associate director for research at the Pew Internet & American Life Project.

Should Congress decide to side with telecom and cable providers in the Net neutrality debate, it could discourage people from paying for faster online access. If the broadband providers got their way, they could build their own network of content and services within the Internet, and discourage people from going outside to competitors.

"Net neutrality doesn't fit comfortably into the way users actually behave when they use high-speed Internet connections. They like to pilot their own ships online," Horrigan says. "With high-speed connections, you don't behave as if you'd want walled gardens, you go far and wide and satiate your info needs."The Net neutrality debate and broadband adoption have one thing in common: they both involve national policy butting heads with the local business interests of carrier companies, says David S. Isenberg, a fellow at the Berkman Center for Internet and Society at Harvard Law School and a former distinguished member of technical staff at AT&T Laboratories.

Because the cost of the network is falling -- or, depending on how you look at it, performance for the same cost is improving -- Isenberg believes that telephone and cable companies could be giving their customers a lot more. He estimates that in Japan, where broadband subscribers per capita outnumber those in America by 24 percent, the service is six or seven times as fast, as much as 100 megabytes, for roughly the same monthly price, about $50.

"The reason is not that Japan has better technology, because everybody in the world has the same technology; the reason has to do with politics and policy," Isenberg says. "If the U.S. had a different policy for broadband, we might see a factor of 10 increase at the same price and our network carriers would make money."Governments in Japan as well as Korea, Finland and other countries with high amounts of access have all operated according to the belief that building the broadband infrastructure is a critical component of a competitive economy.

"The government either helped subsidize the price or pushed network providers to go faster," Taplin of USC says. "Instead of taking a 'we'll let the market figure it out' approach, the Koreans said this is a critical part of a competitive economy, we're going to make sure we get good cheap broadband in place quickly. And they did." Closer to home, across the northern border in Canada, a high-speed connection is available to 90 percent of the population, and two-thirds choose to go online with it, for about $30 per month. The province of Alberta has just completed the SuperNet, a $260 million project that laid 12,000 kilometers of fiber and wireless technology for broadband service in 429 communities, 95 percent of the province. "Our government policy for the last several years has been concerned with connectivity," says Charles Zamaria, a professor at Ryerson University in Toronto who helped write a report last November for the Canadian Internet Project. "The public supports public policy that supports infrastructure deployment rather than leaving it to commercial interests."

And it helps, he says, that the country's telecoms wired for high-speed the first time they wired for cable. "It didn't mean there had to be a complete rewiring. In many of the first original rollouts it was in anticipation of high speed."Zamaria also says that social networking projects mean a lot to Canadians because of the relatively small population of 30 million spread out over a large land area and because of the opportunity to disseminate cultural content and strengthen the sense of national identity.

Americans shouldn't discount the value of high-speed access for building social networks and accessing government health services, says Pew's Horrigan.

"At a very broad level high-speed Internet is about an information society, which touches on social benefits, how business gets done, how people interact with others in their social networks -- both close to home and overseas. It's important to have the highest form of infrastructure in this area," he says. "We should worry about where we stand in relation to the rest of the world."