As Published in The Wall Street Journal on July 7, 2005
Broadband access is essential to an expanding Internet-based information economy. Creating a policy environment that speeds the deployment of broadband throughout the U.S. is my highest priority as the new chairman of the FCC.
We recently received two pieces of encouraging news on the spread of broadband. First, the Supreme Court affirmed the FCCs decision to refrain from regulating cable companies provision of broadband services. This was an important victory for broadband providers and consumers. Cable companies will continue to have incentives to invest in broadband networks without fear of having to provide their rivals access at unfair discounts. The decision also paves the way for the FCC to place telephone companies on equal footing with cable providers. We can now move forward and remove the legacy regulation that reduces telephone companies incentives to provide broadband.
Second, today, the FCC will release its most recent broadband deployment report. The dramatic growth in broadband services depicted in this report proves that we are well on our way to accomplishing the Presidents goal of universal, affordable access to broadband by 2007.
The report contains two key findings. First, the U.S. leads the world in the total number of broadband connections with 38 million subscribers. And we are signing up new subscribers at an incredible rate. In 2004, broadband subscribership increased by 34%, with a 45% increase in DSL subscribership, and a 30% increase in subscribership to cable modem. Second, broadband platforms are engaged in fierce competition. In addition to telephone and cable providers, broadband access is increasingly being delivered to consumers via satellite, wireless, and fiber or powerline providers. In 2004, satellite and wireless connections to the Internet increased by 50% and fiber or powerline connections by 16%. This competition is leading to broadband providers offering customers faster and faster connections at lower and lower prices.
Most Americans today can choose between several competing broadband service providers and service packages. Telephone companies, wireless carriers, cable TV service providers and satellite providers are aggressively getting into the broadband business. New technology platforms are also growing. Increasingly, users of "Wi-Fi" technology can get high-speed Internet connections at "hot spots" located at coffee shops, hotels, airports, city parks, streets, and squares. These proliferating service providers are increasingly competing with each other, and that holds down prices, increases consumer choice, and creates a vast new array of services.
Although last Decembers report by the OECD ranks the U.S. 12th with respect to broadband subscribership per 100 inhabitants, there is more to the story: broadband growth in the U.S. is exceptional and leads the world. Unfortunately, our OECD ranking does not match the reality. For example, in terms of size, the U.S. has more than twice the population of the other countries ahead of it on the OECD list. And, no other country has as many urban areas or as many remote and widely-dispersed rural areas spanning huge distances.
If you compare the broadband penetration rates of some "leading" countries with comparable U.S. states with similar population density, you see similar penetration rates. For example, Japan, which ranks 8th in the OECD report has a population density of 350 inhabitants per square kilometer and has 15 broadband subscribers per 100 inhabitants. These numbers are very similar to Massachusetts which has a population density of 317 inhabitants per square kilometer and 18 broadband subscribers per 100 inhabitants.
Although we have seen billions of dollars of new investment in broadband networks, there is still more that the government must do to spur broadband deployment. We need to place all broadband providers on equal footing so that they can fairly compete in the marketplace. This means that we must treat all such providers in the same manner -- free of undue regulation that can stifle infrastructure investment. This does not mean, however, that the government should have no role in the broadband market. To the contrary, we must be vigilant in ensuring that public safety, law enforcement, and consumer protection needs continue to be met.
Now that the Supreme Court has provided much-needed clarity, the ball is in the FCCs court. I welcome the opportunity to address the remaining obstacles in the path to universal, affordable broadband access to ensure that all Americans are empowered for success in tomorrows economy.