U.S. vs. European Broadband Deployment: What Do the Data Say?

As the Internet becomes more important to the everyday lives of people around the world, commentators have tried to identify the best policies increasing the deployment and adoption of high-speed broadband technologies. Some claim that the European model of service-based competition, induced by telephone-style regulation, has outperformed the facilities-based competition underlying the US approach to promoting broadband deployment. The mapping studies conducted by the US and the EU for 2011 and 2012 reveal that the US led the EU in many broadband metrics. • High-Speed Access: A far greater percentage of US households had access to Next Generation Access (NGA) networks (25 Mbps) than in Europe. This was true whether one considered coverage for the entire nation (82% vs. 54%) or for rural areas (48% vs. 12%).• Fiber Deployment: The US had better coverage for fiber-to-the-premises (FTTP) (23% vs. 12%). Furthermore, FTTP remained a less important contributor to NGA coverage than other technologies.• Regression Analysis of Key Policy Variables: Regressions built around the mapping date indicate that the US emphasis on facilities-based competition has proven more effective in promoting NGA coverage than the European emphasis on infrastructure sharing and service-based competition.• Investment: Other data indicate that the US broadband industry has invested more than two times more capital per household than the European broadband industry every year from 2007 to 2012. In 2012, for example, the US industry invested US$ 562 per household, while EU providers invested only US$ 244 per household.• Download Speeds: US download speeds during peak times (weekday evenings) averaged 15 Mbps in 2012, which was below the European average of 19 Mbps. There was also a disparity between the speeds advertised and delivered by broadband providers in the US and Europe. During peak hours, US actual download speeds were 96% of what was advertised, compared to Europe where consumers received only 74% of advertised download speeds. The US also fared better in terms of advertised vs. actual upload speeds, latency, and packet loss.• Pricing: The European pricing study reveals that US broadband was cheaper than European broadband for all speed tiers below 12 Mbps. US broadband was more expensive for higher speed tiers, although the higher cost was justified in no small part by the fact that US Internet users on average consumed 50% more bandwidth than their European counterparts.Case studies of eight European countries (Denmark, France, Germany, Italy, the Netherlands, Spain, Sweden, and the United Kingdom) confirm that facilities-based competition has served as the primary driver of investments in upgrading broadband networks. Moreover, the countries that emphasized fiber-to-the-premises had the NGA coverage rates in this study and ranked among the lowest NGA coverage rates in the European Union. In fact, two countries often mentioned as leaders in broadband deployment (Sweden and France) end up being rather disappointing both in terms of national NGA coverage and rural NGA coverage. These case studies emphasize that broadband coverage is best promoted by a flexible approach that does not focus exclusively on any one technology.