Critics of America’s free market approach to telecommunications have long advocated for more robust government involvement in service operations and building out network infrastructure. They argue that there is currently a lack of adequate investment needed to close the digital divide and provide consumers with low-cost, high-quality options. Therefore, their reasoning goes, government intervention is needed to introduce market competition and deliver high speed internet to every corner of America. To summarize their position, Europe serves as the perfect role model for what the U.S. should strive to emulate.
Unfortunately, these critics have things backwards.
A new report by The Broadband Association calls these assumptions into question. The report, called US vs EU Broadband Trends 2012-2020, provides evidence that the United States continues to lead the European Union (EU) on several important benchmarks, including three critical connectivity metrics: broadband deployment, broadband adoption, and market competition. The results for each metric are provided as follows:
- Deployment: US leads by 11 percentage points ≥30 Mbps; +25 pp ≥100 Mbps
- Adoption: US leads by 10 pp ≥25 Mbps; +21 pp ≥100 Mbps
- Competition: US benefits from nearly twice the fixed facilities-based competition of the EU overall; when comparing rural areas, the US lead extends to 7x (US. vs. Broadband Trends 2012-2020, 2022, p. 1)
Each metric represents a unique data point by which America’s regulatory network can be compared to the EU’s. Whether it is in deployment, where American telecom has made a sizable investment in network infrastructure, adoption, where America has outpaced the EU in connecting households, or competition, where America has a wide range of private service providers, the U.S. leads the EU on all three metrics.
The report also produced some other starting discoveries.
For instance, the report found that in rural areas, 91% of U.S. households now have fixed broadband and high-speed internet. This number is only 60% for EU households. Even for rural households covered by fixed broadband at “any” speed, only 90% of EU households have coverage. This is opposed to 98% for U.S. households.
The U.S. also possess a sizable lead over the EU in other areas like the percent of households with high speed internet subscriptions. For instance, 77% of U.S. connected households have fixed broadband high-speed internet compared to only 67% of EU households. Similarly, 55% of American households have access to internet speeds greater than 100 Megabytes per second (MBPS) compared to only 34% of EU households.
The report also notes that the U.S. has managed to expand consumer access while simultaneously reducing prices for consumers. For instance, a recent study by the independent research organization, Broadband Now, found that US broadband prices have fallen broadly since 2016. This includes falling 42%, or almost $60 a month on average, for consumers using 500 Mbps internet speeds. Other studies have observed similar trends. This is all despite a sharp increase in the price of most other goods and services, making US broadband affordability all the more impressive. The report goes on to provide a range of other facts that reinforce the notion that it is the U.S., not the EU, that possesses the superior regulatory model.
Critics would do well to remember that transformational outcomes occur when the government takes a hands-off approach to regulation and provides space for the market to thrive and meet consumer needs.