Telecommunications: National Broadband Plan Reflects the Experiences of Leading Countries, but Implementation Will Be Challenging
Published: 2010-09-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Increasingly, broadband Internet service is seen as critical to a nation's physical infrastructure and economic growth. Universal access to, and increased use and adoption of, broadband service are policy goals stated in the National Broadband Plan, which the Federal Communications Commission (FCC) released in March 2010. Some recent studies indicate that despite achieving nearly 95 percent broadband deployment and globally competitive adoption rates, the United States has moved from the top to the middle of the international rankings. Other developed countries, which have made universal access and increased adoption priorities, rank higher than the United States in these areas, and their experiences may be of interest to U.S. policymakers. GAO was asked to address (1) the status of broadband deployment and adoption in developed countries, (2) actions selected countries have taken to increase deployment and adoption, and (3) how recommendations in the National Broadband Plan align with the selected countries' actions. GAO analyzed relevant information for 30 developed countries that are members of the Organisation for Economic Cooperation and Development (OECD) and visited 7 of these countries selected for their broadband policies and economic or demographic characteristics. GAO also interviewed public- and private-sector contacts in these countries and FCC officials. FCC provided technical comments on this report.
section_title: What GAO Found
paragraphs: Broadband infrastructure has been widely deployed in developed countries, but broadband adoption rates are more variable because of cost and other factors. In 27 of the 30 OECD countries, including the United States, broadband has been deployed to 90 percent or more of households, regardless of differences in demographic and geographic factors, while broadband adoption rates are affected by factors such as population, cost, and computer ownership. In the United States, which ranks 15th for both deployment and adoption, broadband has been deployed to 95 percent of households, with 26.4 subscribers per 100 inhabitants--above the OECD average of 23.3. To increase broadband deployment adoption, the 7 countries GAO selected--Canada, France, Japan, the Netherlands, South Korea, Sweden, and the United Kingdom--have taken actions that stakeholders in these countries considered effective. GAO placed these actions in five categories--(1) instituting plans and policies (2) providing funds through public/private partnerships, (3) increasing competition, (4) expanding online services, and (5) providing digital literacy training, consumer subsidies, or both. All 7 countries have instituted some type of broadband plan. To help increase deployment in areas private enterprise views as unprofitable, national or regional governments in all 7 countries have used public/private partnerships. To help increase usage and thus expand adoption, all 7 have enacted policies to encourage competition and have increased the number of government services available online. Several countries have also offered training or subsidies, often targeting populations with low adoption rates. The recommendations outlined in the National Broadband Plan reflect actions taken in GAO's 7 selected countries to increase broadband deployment and adoption. The plan contains over 200 recommendations for FCC, other government agencies, and Congress, which the plan's executive summary groups in four broad areas. These four areas are not identical to the five types of actions GAO identified in the selected countries, but both represent similar approaches to expanding broadband deployment and adoption. For example, the plan calls for adopting strategies and long-term goals, while the actions taken by the selected countries include instituting plans that contain strategies and goals. Similarly, the plan advocates policies to promote robust competition, just as the selected countries have taken actions to promote competition. While the United States plans to take actions similar to those of other leading countries to achieve the National Broadband Plan's goals of universal access and increased adoption, achieving these goals will be challenging. Actions will be required by governments at all levels and the private sector. Furthermore, implementing the plan's recommendations will require coordinating the work of multiple stakeholders and obtaining sufficient funding, among other actions. How effectively federal agencies will be able to address these challenges and implement the plan's recommendations, as well as what the private sector will do to further deployment, use and adoption, remains to be seen.

section_title: Letter
paragraphs: Increasingly, broadband Internet service is viewed as a critical component  of a nation’s physical infrastructure and a key driver of economic growth  in the world’s most economically developed countries. Both the  Organisation for Economic Cooperation and Development (OECD)— which brings together the governments of about 30 developed countries to  promote sustainable economic growth and expand world trade—and the  Federal Communications Commission (FCC) have recognized the  economic and social importance of broadband service today. Ensuring  that the infrastructure necessary to provide broadband service is  universally available and that all citizens who wish to subscribe are able to  do so are policy goals of many governments. Universal availability is, for  example, a policy goal set forth in the National Broadband Plan, issued by  FCC in March 2010 in response to a congressional mandate. To achieve  their policy goals, governments of developed countries around the world  have taken actions to increase broadband infrastructure deployment, and  to increase usage and adoption, particularly in areas with little or no  service. Several recent studies on levels of broadband deployment and  adoption across countries allow for international comparisons. Although  such studies have limitations, as we noted in an earlier report,  stakeholders across countries have agreed that they are useful for alerting  policymakers and the public to areas deserving of particular attention in  future policy decisions.
Some recent studies show that, as other developed countries have enacted  policies to increase their levels of deployment and adoption, the United  States has moved lower in the international rankings. Specifically, despite  achieving nearly 95% broadband deployment and globally competitive  adoption rates, the United States has moved from the top to the middle of  the scale in both areas. Hence, the actions of stakeholders in other  countries that have achieved higher deployment and adoption rates are of  interest and offer examples that could inform future U.S. broadband policy  decisions. To obtain a better understanding of these actions, you asked us  to examine efforts of other countries. Accordingly, this report addresses  the following questions:  1.  What is the status of broadband deployment and adoption in  developed countries? 2.  What actions have selected countries taken to increase broadband  deployment and adoption? 3.  How do recommendations outlined in the National Broadband Plan  reflect the actions of selected countries to increase broadband  deployment and adoption?
To address the first question, we obtained information on broadband  deployment and adoption in the 30 countries that were members of OECD  as of January 1, 2010, through a review of OECD’s ranking of broadband  subscribers per 100 inhabitants, and we analyzed key demographic and  socioeconomic data identified by FCC as potentially affecting broadband  deployment and adoption in all 30 countries.
To address the second question, we selected 7 countries from the original  30 countries—Canada, France, Japan, the Netherlands, South Korea,  Sweden, and the United Kingdom—for further analysis and comparison  with the United States, using a case study approach. These countries were  among those that had instituted policies or practices credited with  increasing broadband deployment, adoption, or both, and had economic or  demographic characteristics somewhat similar to those of the United  States. To determine the actions these selected countries have taken to  increase broadband deployment and adoption, we obtained and analyzed  relevant policies, plans, and guidance issued by responsible government  agencies, regulatory authorities, and broadband providers in our 7 selected  countries and actions taken by these countries’ governments and other  stakeholders to increase broadband deployment and consumer adoption.  We identified these actions through semistructured interviews with public-  and private-sector stakeholders in the 7 countries and placed these actions  in five categories. Actions in the first two categorizes serve primarily to  increase deployment, while those in the remaining three categories are  largely intended to increase adoption, although some actions may promote  both deployment and adoption. Furthermore, to better understand  stakeholders’ views on the effectiveness of these actions, we interviewed  national and local government officials and representatives of broadband  providers and consumer interest groups in each of the selected countries.
To address the third question, we analyzed the National Broadband Plan’s  recommendations, which the plan’s executive summary groups in four  broad areas, and compared these areas with the five categories in which  we placed the selected countries’ actions. We also compared individual  recommendations with specific actions taken in the selected countries and  spoke with relevant FCC officials about how the actions recommended in  the plan align with the five identified categories. We did not evaluate the  potential impact or effectiveness of the recommendations.
We conducted this performance audit from June 2009 to September 2010,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. See appendix I for more  information about our scope and methodology.
subsections: section_title: Background
paragraphs: During the 1990s, the primary means for residential users to access the  Internet was a dial-up connection, in which a standard telephone line is  used to make an Internet connection at data transmission speeds of up to  56 kilobits per second (kbps). Broadband access to the Internet became  available to residential customers by the late 1990s. Broadband  connections offer a higher speed Internet connection than dial-up. For  example, some broadband connections in the United States offered over  telephone lines can provide speeds exceeding 1 million bits per second  (Mbps) both upstream (data transferred from the consumer to the Internet  service provider, also known as upload) and downstream (data transferred  from the Internet service provider to the consumer, also known as  download). These higher speeds enable consumers to receive information  much faster and thus access certain applications and content that might be  inaccessible with a dial-up connection. Also, broadband typically provides  an “always on” connection to the Internet, so users do not need to  establish a connection to the Internet service provider each time they want  to go online. The higher transmission speeds that broadband offers  generally cost more than dial-up, and some broadband users pay a  premium to obtain very-high-speed service.
Consumers can receive a broadband connection to the Internet through a  variety of technologies, including, but not limited to, the following:  Cable modem. Cable television companies first began providing  broadband cable modem service in the late 1990s. This service, which is  primarily available in residential areas, enables cable operators to deliver  broadband service through the same coaxial cables that deliver pictures  and sound to television sets. Although the speed of service varies with  many factors, download speeds of up to 6 Mbps are typical. Some cable  providers are offering even higher download speeds, up to 100 Mbps.
Digital subscriber line (DSL). Local telephone companies provide DSL  service, another form of broadband service, over their telephone networks  on spectrum unused by traditional voice service. To provide DSL service,  telephone companies must install equipment in their facilities as well as  installing or providing DSL modems and other equipment at customers’  premises; they may also have to remove devices on phone lines that may  cause interference. Most residential customers receive older, asymmetric  DSL (ADSL) service with download speeds of 1.5 Mbps to 3 Mbps. ADSL  technology can achieve speeds of up to 8 Mbps over short distances.  Newer DSL technologies can support services with speeds of over 8 Mbps  up to 50 Mbps in some areas.
Satellite. Satellites transmit data to and from subscribers from a fixed  position above the equator, eliminating the need for a telephone or cable  connection. Typically, a consumer can expect to download data at a  speed of about 1 Mbps and upload data at a speed of about 200 kbps.  Transmission of data via satellite results in a slight lag in transmission,  typically one-half to three-fourths of a second, thus rendering this service  less suitable for certain Internet applications, such as videoconferencing.  While satellite broadcast service may be available throughout the country,  its use requires a clear line of sight between the customer’s antenna and  the southern sky. The equipment necessary for service, the recurring  monthly fees, and the installation costs are generally higher for satellite  broadband service than for most other broadband transmission modes.
Wireless. Land-based, or terrestrial, wireless broadband service connects a  home or business to the Internet using a radio link. Some companies are  offering fixed wireless broadband service throughout cities. Also, mobile  telephone carriers have begun offering broadband mobile wireless  Internet service, allowing subscribers to access the Internet with their  mobile phones or laptops in areas throughout cities where their provider  supports the service. Also, wireless fidelity (Wi-Fi) networks—which  provide broadband service in so-called “hot spots,” or areas within a  radius of up to 300 feet—can be found in cafes, hotels, airports, and  offices. Hot spots generally use a short-range technology that provides  speeds up to 54 Mbps. In addition, Fourth Generation, i.e., 4G, wireless  technology, now in the early stages of deployment, is expected to achieve  broadband speeds as fast as 50 to 100 Mbps for a few users over an  extended period of time or for short periods of time for many users. Some  4G technologies, such as Worldwide Interoperability for Microwave  Access (known as WiMAX), can provide broadband service up to  approximately 30 miles, but at that distance, data transmission rates would  be low.
Fiber optic. Fiber optic technology converts electrical signals carrying  data to light and sends the light through transparent glass fibers about the  diameter of a human hair. In countries such as Japan and Korea, the  government is encouraging providers to offer, in the next 3-5 years, data  transmission speeds exceeding current DSL or cable modem speeds,  typically by tens or even hundreds of megabits per second, up to 1 gigabit  per second (Gbps) in some areas. Fiber may be provided in several ways,  including direct connection to a customer’s home or business, or to a  location somewhere between the provider’s facilities and the customer. In  the latter case, the last part of the connection to the customer’s premises  may be provided over coaxial cable, copper loop, or radio technology.  Such hybrid arrangements may be less costly than providing fiber all the  way to the customer’s premises, but they generally cannot achieve the high  transmission speed of a full fiber-to-the-premises connection.
In the United States, FCC is the federal agency principally responsible for  broadband but the scope of its authority has not been resolved. In a series  of decisions starting in 2002, FCC classified broadband Internet services as  “information services” under the Communications Act. “Information  services” are not subject to Title II of the Communications Act, which  addresses telecommunications services like phone service, but gives FCC  authority to regulate these services.  However, FCC asserted that it had  authority to regulate broadband Internet service using its “ancillary  authority” under Title I of the Communications Act. A recent decision of  the U.S. Court of Appeals for the District of Columbia Circuit called that  authority into question. In this case, Comcast Corp. v. FCC, the court  reviewed an FCC decision that relied on ancillary authority to address an  Internet service provider’s network management practices.  The court  held that the use of ancillary authority must be tied to a specific statutory  mandate in the Communications Act and that FCC had not done that in its  order. Since that time, FCC has released a Notice of Inquiry (NOI) to seek  public comment on its legal framework for regulating broadband Internet  services. The NOI suggests that there are at least three legal options for  FCC as follows:  1.  Maintain the current “information service” framework for broadband  Internet service based on the Title I ancillary authority questioned in  Comcast. 2.  Identify the connectivity portion of broadband Internet service as a  “telecommunications service” to which all requirements of Title II of  the Communications Act would apply. 3.  Following the framework Congress established for cell phone services  in 1993, identify the connectivity portion of broadband Internet service  as a telecommunications service and simultaneously forbear from  applying all but the minimum number of provisions of Title II needed  to implement fundamental universal service, competition and market  entry, and consumer protections.
The NOI seeks comment on the three legal options and any other  approaches that will restore a solid legal foundation for FCC’s broadband  policies. Public comments were due on July 15, 2010, and replies on  August 12, 2010.
Three other federal agencies also have responsibilities for broadband in  the United States:    The Office of Science and Technology Policy (OSTP) within the Executive  Office of the President has a broad mandate to advise the President and  the federal government on the effects of science and technology on  domestic and international affairs and has led interagency efforts to  develop science and technology policies and budgets.
Within the Department of Commerce, the National Telecommunications  and Information Administration (NTIA) serves as the President’s principal  telecommunications and information adviser and works with other  executive branch agencies to develop the administration’s  telecommunications policies.
Within the Department of Agriculture, the Rural Utilities Service (RUS)  provides financial resources for broadband deployment.
Under the American Recovery and Reinvestment Act of 2009 (Recovery  Act), enacted on February 17, 2009, NTIA and RUS have responsibility for  distributing federal moneys to expand broadband. The act provided $7.2  billion to extend access to broadband throughout the United States,  including $4.7 billion for NTIA and $2.5 billion for RUS. Specifically, the  Recovery Act authorized NTIA, in consultation with FCC, to create the  Broadband Technology Opportunities Program (BTOP) to manage  competitive grants to a variety of entities for broadband infrastructure,  public computer centers, and innovative projects to stimulate demand for,  and adoption of, broadband. The Recovery Act made up to $350 million of  the $4.7 billion available for developing and maintaining a nationwide map  featuring the availability of broadband service, as provided in the  Broadband Data Improvement Act. In addition, the Recovery Act made  some of NTIA’s appropriation available for transfer to FCC for the  development of a national broadband plan to help ensure that all people in  the United States have access to broadband. The Recovery Act also  authorized RUS to establish the Broadband Initiatives Program (BIP) to  make loans and to award grants and loan-grant combinations for  broadband infrastructure projects in rural areas. Pursuant to the Recovery  Act, all BTOP and BIP funds must be awarded by September 30, 2010.
In May 2009, we reported on the broadband deployment policy of the past  administration, the principal federal programs that helped fund broadband  infrastructure, and stakeholders’ views on the usefulness of those  programs. We also compared the policies of some OECD countries,  which had higher broadband adoption rates than the United States, and  recommended that those agencies responsible for overseeing federal  efforts to increase broadband deployment and adoption—FCC, NTIA, and  RUS—work together to specify performance goals and measures for  broadband deployment and coordinate their efforts in carrying out the  plan.
section_title: Broadband Deployment Rates Are Generally Comparable across OECD Countries, but Adoption Rates Vary because of Cost and Other Factors
subsections: section_title: Broadband Infrastructure Has Been Deployed to Nearly All Households in Developed Countries despite Significant Demographic and Geographic Differences
paragraphs: In 27 of the 30 OECD countries, including the United States, broadband  has been deployed to 90 percent or more of households regardless of  demographic or geographic differences. High rates of broadband  deployment have been achieved despite geographic and financial  differences among the OECD countries. However, not all OECD countries  have overcome the same challenges in deploying broadband  infrastructure. For example, in Denmark, which is one of the smallest and  most densely populated OECD countries, with an average of 128 people  per square kilometer, broadband has been deployed to 99 percent of  households. Yet in the United States, which is 228 times larger  geographically, and 56 times more populous, and which has an average of  32 people per square kilometer, broadband has been deployed to more  than 95 percent of households. See figures 1 and 2.
Across the 30 OECD countries, average broadband download speeds range  from 1.352 Mbps in Mexico to 11.717 Mbps in South Korea, and the  majority of countries have average broadband speeds of 3 Mbps to 8 Mbps,  according to Akamai Technologies, a global Internet content provider that  issues reports assessing broadband download speeds in approximately 71  countries. The United States, with assessed average speeds of 3.808 Mbps,  ranks 14th among the OECD countries. However, broadband speeds can  exceed averages under certain conditions. For example, in the United  States, three localities—Berkeley, California (18.730 Mbps); Chapel Hill,  North Carolina (17.483 Mbps); and Stanford, California (16.956 Mbps)— offer the highest average broadband speeds in the world. In addition, 21 of  the 100 top cities Akamai evaluated are in the United States.
The quality of broadband infrastructure is often characterized by the  speed it is capable of providing to users. Greater broadband speeds enable  the use of more services over the Internet. For example, the United States  and Japan lead the world in demand for high-definition television (HDTV),  which can consume up to 18 Mbps if broadcast over the Internet. Current  Internet-based video requires 1-4 Mbps; if these speeds grow over time and  demand for Internet-based HDTV is combined with demand for other  broadband-based services, such as Web browsing and online gaming, a  household’s demand for broadband speeds could exceed 20 Mbps or  more. See table 1. However, since most HDTV today is carried on  dedicated infrastructure, the impact on demand for Internet broadband  speeds is small.
section_title: Broadband Adoption Rates Are Variable and Are Affected by Cost and Demographic Factors
paragraphs: A number of demographic factors, such as population, cost, and computer  ownership, affect broadband adoption rates. Seventeen OECD countries  have broadband adoption rates that exceed the average of 23.3 subscriber  lines per 100 inhabitants, including the United States, at 26.4 subscriber  lines. Furthermore, the United States has more subscribers than any other  OECD country—81 million, or more than twice as many as Japan, which  has 31 million, the second highest number of subscribers.
Population is an important factor to consider when analyzing broadband  adoption rates. For example, 7 of the 10 countries with the highest  adoption rates are also among the 10 countries with the smallest  populations. Because the population of the United States is significantly  larger than that of the other OECD countries, a 1-unit increase in the  broadband adoption rate in the United States requires more than 3 million  new U.S. broadband subscriber lines. By contrast, the Netherlands would  need another 160,000 subscriber lines to achieve a 1-unit increase.  Assuming all other factors are equal, the cost of a 1-unit increase in  broadband subscriber lines per 100 inhabitants is considerably higher in  the United States than in any other country. See figures 3 and 4.
section_title: Cost and Demographic Factors Affect Broadband Adoption Rates
paragraphs: Cost—including a monthly broadband subscription price and the price of a  computer or other device for accessing the Internet—is another key factor  affecting broadband adoption rates. A 2009 survey conducted for FCC  determined that 65 percent of American adults use broadband at home,  although another 12 percent use the Internet, either through a dial-up  connection or at a place other than their home. However, this study also  surveyed nonadopters in the United States and determined that more than  one-third identified cost as the main factor affecting their decision not to  subscribe to broadband service. Additionally, subscription costs generally  increase with speed, making higher-speed services typically more  challenging for users to adopt. As a result, cost concerns may limit the  level of Internet-based applications consumers can access.
Broadband service prices can be assessed along several criteria, such as  the average price per megabit or the price for a given “speed tier.” As  table 2 shows, prices for broadband service in the United States are below  OECD averages except for very-high-speed service.
In the United States, several demographic factors, including education and  income, are also thought to affect broadband adoption. For example,  having a child in school and having a higher income are associated with  higher broadband adoption levels. According to FCC’s 2009 survey, 75  percent of parents with a minor child have broadband services at home, as  do 91 percent of households with annual incomes of more than $75,000.  Conversely, 40 percent of households with annual incomes of less than  $20,000 have broadband services at home. See table 3.
Personal computer ownership has also been linked to broadband  adoption, since computers enable users to access Internet-based services.  Of the 30 OECD countries, the United States ranks fifth in personal  computer ownership, with 80.6 per 100 inhabitants—a rate considerably  above the average of 52.3 per 100 inhabitants. Yet despite this high  personal computer ownership rate, FCC’s 2010 survey indicates that 10  percent of U.S. individual nonadopters surveyed cited the cost of  computer ownership as one of the main reasons for nonadoption.
According to our analysis of OECD and World Bank data, income is a  factor that drives broadband adoption across the OECD countries. For  example, Turkey, which has the lowest adoption rate (9.0 subscribers per  100 inhabitants), also has the lowest gross national income (GNI) per  capita ($9,020) of the OECD countries, while the United States, which  ranks 15th in adoption (with 26.4 subscribers per 100 inhabitants), ranks  eighth in GNI per capita ($47,930). Norway, which ranks third in adoption  (with 33.9 subscribers per 100 inhabitants), has the highest GNI per capita  ($87,340). As figure 5 shows, broadband adoption generally declines as  income declines, although outliers do exist.
section_title: Stakeholders in Selected Countries Have Taken a Wide Variety of Similar Actions to Increase Broadband Deployment and Adoption
paragraphs: The seven countries we selected as case studies, all of which had achieved  higher levels of either broadband deployment or broadband adoption than  the United States as of the fourth quarter of 2009, have taken similar  actions to increase deployment and adoption—actions that stakeholders  in these countries told us they considered effective. Through our case  studies, we identified five overall categories of actions: (1) establish plans  and policies to guide deployment and provide leadership support, (2)  provide government funding through public/private partnerships, (3)  promote competition, (4) implement strategies to make broadband  services more available and useful to consumers, and (5) provide digital  literacy training and consumer subsidies.
subsections: section_title: All Seven Selected Countries Have Instituted Broadband Plans, and Leaders Have Emphasized Broadband Initiatives
paragraphs: All seven selected countries have instituted broadband plans. Generally,  these plans include some mix of short- and long-term goals, action plans,  and performance metrics. Such attributes align with the framework set  forth by the Government Performance and Results Act of 1993 (GPRA),   which stresses the importance of having clearly stated objectives,  performance plans, goals, and measures to improve a program’s  effectiveness. Some stakeholders told us that the adoption of such plans,  with their accompanying goals and action items, helped focus national  efforts to increase the deployment and adoption of broadband. The  following are examples:    Japan adopted a plan in 2001 with the goal of providing speeds of up to 30  Mbps to at least 30 million households and speeds of up to 100 Mbps to at  least 10 million households by 2005 and achieved this goal by 2003. In  2009, Japan adopted the e-Japan Strategy 2015 and set new target speeds  of 1 Gbps for fixed networks, more than 100 Mbps for mobile networks,  and 100 percent adoption of broadband services by approximately 2015.
In 1997, Canada started the Government On-Line program to organize  service and information around the needs of its people and businesses.  Since 2002, through such programs as Broadband for Rural and Northern  Development (BRAND) and Connecting Canadians, Canada has brought  connectivity to rural and remote areas and achieved the goal of connecting  public institutions, including schools and libraries, in all of Canada’s 4,000   communities. In 2009, Canada adopted Broadband Canada, a program that  will provide $225 million over 3 years to deploy broadband infrastructure  to residents in unserved rural and remote areas.
In 2009, the United Kingdom issued the Digital Britain plan, which calls for  100 percent availability of a connection capable of download speeds of at  least 2 Mbps by 2012.
In Sweden, from 2001 to 2007, the government adopted a policy of  deploying broadband to rural areas lacking access, and, in 2008, 99 percent  of households had access to some form of broadband. In 2009, the  Swedish government adopted the Broadband Strategy for Sweden with the  goal of ensuring that 90 percent of households have access to broadband  speeds of at least 100 Mbps by 2020.
In addition to goals, leadership is recognized as important in helping to  increase broadband deployment and adoption. In Korea, government  officials cited their President’s constant emphasis on broadband initiatives  as a factor that has helped to increase broadband adoption. In addition,  the country’s ministries emphasize e-government services and often  compete with each other to develop new Internet applications. In France,  the government created the Office of the Digital Development Minister in  March 2008 and made it responsible for crafting a national broadband  strategy known as Digital France 2012. The goal of this strategy is to  achieve 100 percent broadband access by 2012 and to facilitate  coordination among the various ministries with authority over information  technology.
section_title: In All Seven Countries, National or Regional Governments Have Provided Funds for Public/Private Partnerships to Deploy Broadband Infrastructure
paragraphs: Case study governments, at the national or regional levels or both, have  used public/private partnerships to help fund broadband deployment in  unserved and underserved areas. Whereas private enterprises have  deployed broadband infrastructure in high-density urban areas where  there is a strong business case for such investment, they have  independently invested less in low-density rural areas or isolated  communities, where deployment costs more per household and offers less  opportunity for profit. Officials in both the public and private sectors of  several of the countries we visited acknowledged that some areas are  unprofitable to serve and some incentive, usually in the form of  government funding, is required to motivate private investment and  achieve universal access. The public/private partnerships in our case-study  countries range from local authorities and private companies that have  shared the cost of building a network to municipalities that own  broadband networks and contract with private companies to operate and  maintain them. The following are examples:    Japan’s Ministry of Information and Communications told us that,  although 98.6 percent of households have broadband access, the  government has instituted a public/private partnership program to support  the establishment of broadband infrastructure in rural and remote areas  where broadband service is not available and hopes to eliminate all areas  without broadband access by the end of March 2011. Under this  arrangement, the national government provides one-third of the total cost  of installing broadband networks, requiring that the local government  formulate plans in collaboration with the private sector and help create  demand for broadband. Local governments in Japan maintain ownership   of the network and attract the private sector by selecting one company to  provide service for the area.
From 2001 to 2007, Sweden initiated a broadband funding initiative to  expand broadband to rural and remote areas using a public/private  partnership model. Financing was provided through state funds, local  authorities, and broadband operators, and, in order to participate, a local  authority had to provide at least 5 percent of the funding. A government  evaluation of the funding program determined that broadband had been  deployed to more remote areas than would have received broadband  without the funding.
In 2006, in order to stimulate economic growth, a large suburb of Paris,  France, Hauts-de-Seine, issued a request for proposal; in 2007, Hauts-de- Seine hired a private company to deploy a fiber network to all its  residents, enterprises, and public sites within 6 years and to operate the  network as a shared fiber network, one open to all competitors. Regional  officials told us they entered into this arrangement to prevent the creation  of a digital divide, which would have occurred without the involvement of  the municipality because no commercial provider was expected to deploy  infrastructure equally to all areas, both rich and poor, urban and suburban.  Public officials of Hauts-de-Seine told us that the public/private  partnership arrangement would optimize the implementation of the  network by reducing the cost of deployment of a fully open infrastructure  and allowing service providers to increase their customer base. In  addition, after 25 years, ownership of the network will revert to Hauts-de- Seine.
In Canada, in 2001, the City of Ottawa was amalgamated with several of its  surrounding municipalities, and, within the new boundaries, 90 percent of  the city’s landmass and 10 percent of its residents were rural. At that time  in the rural areas, 2 percent of the residents had access to broadband. To  bring broadband to the entire amalgamated area, in 2007, Ottawa entered  into a partnership with a private broadband provider. Ottawa issued a  request for proposal, set a goal of 100 percent availability, and selected a  company that provided both fixed wireless and satellite service. A city  official told us that some satellite coverage was necessary because  Ottawa’s uneven terrain would have made it too costly to erect enough  towers to provide wireless connections for all residents. The city official  told us that the private company had given the city more than it had asked  for and its bid did not request the maximum contribution from the city.  Currently, broadband service is available to 100 percent of the  amalgamated area’s residents, with 98 percent of rural areas served by  terrestrial wireless and the last 2 percent served by satellite. Adoption  rates range from 80 percent in the city to 50 percent in the rural areas.
In Korea, officials told us they have used public/private partnerships to  help reduce the digital divide between urban and rural areas. For example,  rural villages with more than 50 households are receiving broadband  service at speeds of up to 50 Mbps from Korea Telecom (KT) in  partnership with the Korean government. When KT transitioned from  government to private ownership in 2002, it had to commit to providing  infrastructure to rural areas. However, since 2005, the government has  shared the cost, with KT contributing 50 percent, the central government  25 percent, and the local government 25 percent.
subsections: section_title: Localities Have Also Used Public/Private Partnerships to Deploy Fiber to Gain Greater Broadband Speed
paragraphs: Private enterprise has been slow to deploy fiber directly to customers’  premises in several countries. While fiber can provide the highest speeds,  it is costly to deploy, and consumer demand for speeds above 50 Mbps is  limited. Moreover, some existing DSL and cable networks can provide  speeds in excess of 50 Mbps. Nevertheless, some municipalities have  determined that fiber is necessary for their future well-being and have  decided to deploy it despite private companies’ unwillingness to bear the  full investment costs. To finance the deployment of fiber in their area,  some of these municipalities have established public/private partnerships  and examples of some of these are as follows:    Stokab, a municipally-owned fiber network, was founded in 1994. Stokab  officials told us that the municipality of Stockholm had determined that  fiber appeared to be the most viable technology for the foreseeable future,  although the local telephone provider did not express any interest in  deploying fiber infrastructure at that time. In addition, city officials told us  they knew that if, in the future, multiple companies chose to provide fiber  to the city, the streets could be dug up several times, causing disruption  and damaging Stockholm’s historic buildings and cobblestone streets. To  avoid such a scenario, Stockholm officials set up Stokab, which deploys  and maintains the physical infrastructure and leases dark fiber to  multiple businesses, which may use the fiber for their own business or to  provide service to others. Stokab is thus a wholesaler to other business   entities. Stokab officials told us that many municipalities in Sweden have  adopted models similar to Stokab.
In Amsterdam, the Netherlands, in 2000, broadband service was widely  available over cable and telephone lines, but there was no fiber to the  home. Officials said they believed fiber would protect the city’s future  competitiveness, although commercial companies did not want to invest in  fiber at that time. Accordingly, in 2006, Amsterdam formed Glasvezel  Amsterdam (GNA) to finance a fiber network in conjunction with private  investors to provide broadband services throughout the city. The city is  not a majority shareholder in GNA, and it is treated like any other private  investor. GNA has deployed infrastructure to multiple dwelling units  comprising 43,000 apartments and began a new roll out to another 100,000  homes in 2009.
section_title: Public/Private Partnerships Raise Some Concerns
paragraphs: Although public/private partnerships have provided both public and  private benefits, they have nevertheless raised some concerns. For  example, some providers have expressed reservations about using public  funds to support businesses in competition with private enterprise. Two  providers told us that they think it is unfair to use public funds to finance  wireline broadband to compete with a company providing broadband over  a satellite or wireless network in rural areas because there is not enough  business in such areas to support one unsubsidized company. In addition,  officials at companies in Japan and Canada questioned the sustainability  of government-funded projects and expressed concern about who would  be responsible for maintaining government-funded infrastructure once the  government funding is gone. The European Commission has placed some  limitations on the use of public funds to establish businesses in  competition with private enterprise.
Public officials have also expressed concern about the interoperability of  municipal networks and have identified a need to provide some guidance  to municipal personnel. Public officials in Sweden, the United Kingdom,  and the Netherlands have suggested that uniform standards or some form  of guidance from the central or national government would be helpful  when localities are forming public/private partnerships to deploy  broadband infrastructure. The following are examples:    Officials in Sweden told us that although the national government’s  provision of funds to municipalities from 2001 through 2007 helped to  deploy broadband to rural and remote areas, it also led to a profusion of  incompatible networks. If they were to support future efforts, the officials  said, they would impose more requirements and draw up standards  applicable to all municipal systems.
Officials in the United Kingdom told us that the government recognized it  would not achieve universal broadband deployment without the  cooperation of municipalities, but that municipalities needed guidance on  how to set up a municipal broadband network to receive state aid. The  government has provided such guidance.
Officials in the Netherlands told us that the ministry is publishing  guidelines for municipalities that contain best practices to give towns  ideas of how to set up and manage broadband networks.
section_title: Government Officials Say Actions to Increase Competition in Broadband Markets Have Helped to Increase Broadband Adoption by Increasing Consumer Choice and Reducing Prices
paragraphs: In all seven of our case-study countries, from 93.5 percent to 100 percent  of households have access to broadband, and those in the urban areas  have a choice of at least two broadband providers. In some of the  countries we visited, such as Canada and the Netherlands, the two main  providers of broadband service for the majority of urban and suburban  populations are the telephone company and the cable company, both of  which provide service over their own networks. However, in other  countries, such as France and Sweden, wireline cable service has not been  universally deployed, and there is no cable provider that is competing  nationwide with the telephone company. To ensure a national competitive  market for wireline broadband services, six of seven countries have  increased the level of competition in the provision of wireline broadband  service through laws, regulations, or both, which require the incumbent  telephone carrier to open its copper networks (the legacy infrastructure  used to provide telephone service) and provide access to competitors at  wholesale prices. This activity is commonly referred to as “unbundling.”  Unbundling has been credited with giving most urban residents in France,  the United Kingdom, Sweden, the Netherlands, and Japan a choice of three  or more providers. Government officials in some countries told us that  requiring companies to unbundle has provided several consumer benefits,  such as greater competition, higher speeds, more services, and lower  prices. Examples from some of those countries are as follows:    Swedish authorities credit network unbundling with relatively low  consumer prices and good service quality.
Officials in the Netherlands told us that unbundling the local loop has  stimulated competition, resulting in the deployment of DSL to more than  99 percent of the country’s households.
In the United Kingdom, officials of the Office of Communications (Ofcom),  the telecommunications regulator, told us that, since unbundling, at least  four additional operators have entered the British broadband market.
In Korea, although unbundling has not increased competition, several  companies are competing with incumbent providers by building their own  networks. One company official attributed the limited success of  unbundling in South Korea to difficulties in getting access to the  incumbent’s network. Another company official said several competing  telecommunications infrastructures had developed because competition  for customers is based on speed. If a company is using another company’s  network, it cannot provide faster service than the company whose  network it is leasing. Consequently, in most urban areas of Korea,  residents have a choice of four providers, each of which offers service  over its own infrastructure.
To further encourage competition and ensure that incumbents do not stifle  competition by charging prohibitively high prices for access to their  infrastructure, all seven countries also regulate the price the incumbent  carrier can charge competitors for network access.
The majority of our case-study countries have benefited from requiring the  incumbent telecommunications carrier to unbundle its copper telephone  lines, but the benefits of fiber unbundling are less clear. Both the  Netherlands and Japan have required fiber unbundling, and Great Britain  has proposed virtual unbundling of fiber; however, officials in some case- study countries cited concerns about the effect of requiring unbundling,  pointing out that overregulation too early in the fiber rollout will hamper  investment.
Furthermore, industry representatives in Japan told us that although the  unbundling of copper lines has increased competition, the unbundling of  fiber has had less effect, because of the high cost of accessing a  competitor’s fiber network. These industry representatives explained that  G-Pon, the most cost-effective and most widely used architecture for  deploying fiber, is currently cost-prohibitive to unbundle and technological  limitations restrict the profitability of leasing an incumbent’s fiber  infrastructure. Representatives of OECD also voiced similar concerns and  told us that they have advocated using a network architecture other than  G-Pon in order to facilitate competition. Thus, the manner in which fiber is  most often deployed could affect future efforts to foster competition over  fiber networks.
section_title: All Seven Countries Have Expanded Online Services to Increase the Usefulness of Broadband
paragraphs: Although from 90 percent to 100 percent of households in all seven of our  case-study countries have access to some form of broadband,  approximately 30 percent of households do not subscribe to wireline  broadband service. Increasing usage is important to policymakers  because, as OECD has stated, “Broadband not only plays a critical role in  the workings of the economy, it connects consumers, businesses, and  governments and facilitates social interaction.” Governments in all seven  of our case-study countries have attempted to increase usage through  strategies for making broadband services more available and more useful  to consumers. Examples are as follows:    All seven countries have provided funding to deploy broadband to schools,  and some have made computers available to students either free or at low  cost. Japan’s Ministry of Education provides one computer per student at  the elementary school level. Korea provided free Internet service to all  primary, middle, and high schools throughout the country. In the  Netherlands, the Ministry of Economic Affairs told us that every town was  subsidized in some way, to encourage broadband use in schools and in  new buildings. One subsidy was for people to buy personal computers for  the home, since the children were learning about the Internet in the  schools.
In all seven countries, to increase the usefulness of broadband to citizens,  governments have made services for citizens available over the Internet,  commonly referred to as e-government services. For example, in the  United Kingdom, the government is planning to introduce a service, Tell  Us Once, that will allow a person to register a birth or death online with  just one rather than multiple organizations, as is done currently. In Korea,  taxes can be filed online, and the government offers a rebate for using this  method of filing. The Netherlands has provided all citizens access to  government documents, including tax and social security information.
In the United Kingdom, Ofcom established a voluntary code of practice for  service providers to give the public information about and create  accountability for advertised broadband speeds. Ofcom took this step  because consumers were choosing service providers without knowing the  capabilities of various Internet speeds, why service speeds were  important, or whether they were receiving the advertised speeds they had  purchased. All the leading Internet service providers enrolled in the code  of practice, and Ofcom is now amending the code so that if a customer  gets below a certain estimate of speed, the customer can change providers  with no penalty. Ofcom also supported a research program to identify  actual broadband speeds and compare the different providers’ speeds and  services. Ofcom has published its research and made the results available  to the public on its Web site.
Korea instituted a voluntary premise certification program to encourage  building owners to upgrade their broadband access facilities. Once a  building is certified, the owner can display one of four emblems indicating  the speed or type of access provided or both, with speeds ranging from 10  Mbps (Class 3) to 1 Gbps (Special Class). Building owners have found that  offering faster broadband speeds allows them to charge higher rents.
Countries have also funded research to promote the use of broadband. For  example, in the Netherlands, the government provided grants for three  projects to promote high-speed broadband use to facilitate infrastructure  deployment and service. Canada sponsors the Scientific Research and  Experimental Development program, which provides federal tax  incentives for Canadian businesses to conduct research and development  in Canada that will lead to new, technologically advanced products or  processes, including broadband technologies.
section_title: To Increase Broadband Usage among Targeted Populations, Governments in Several Countries Have Provided Digital Training or Offered Subsidies or Both
paragraphs: Research in the United States has shown that portions of the population  do not use and have not adopted broadband Internet for various reasons,  including lack of knowledge, lack of interest, lack of access to a computer,  or inability to pay for broadband service. Governments of several of the  countries we studied determined that some initiatives are necessary to  increase broadband usage among these groups.
In South Korea, the government has provided classes to more than 10  million residents, including those living in rural areas, the elderly, and  housewives, to make them more comfortable with accessing and using the  Internet. The government has also provided Internet service at reduced  monthly subscription rates for the economically disadvantaged and offers  free Internet access to many rural communities through community access  points.
The United Kingdom expects to spend £300 million to provide reduced- cost broadband access to low-income subscribers.
The Ministry of Economic Affairs in the Netherlands has developed a  digital literacy program for the elderly to make them more comfortable  with the Internet.
From 1998 to 2007, Sweden implemented a measure to increase the  availability of personal computers to the home. The program offered a tax  deduction to all persons who were gainfully employed, regardless of  income, and resulted in purchases of some 2.1 million personal computers.
section_title: Recommendations in the National Broadband Plan Generally Reflect Selected Countries’ Actions to Increase Broadband Deployment, Usage, and Adoption
paragraphs: The National Broadband Plan includes over 200 recommendations, which  the plan’s executive summary groups into four areas—(1) designing  policies to ensure robust competition; (2) managing government assets,  such as rights-of-way, to encourage network upgrades; (3) using  government funds to help subsidize both deployment in high-cost areas  and adoption among low-income groups; and (4) maximizing the benefits  of broadband in the sectors government influences significantly, such as  education, health care, and government operations. These four areas are  not identical to the five types of actions we identified in our case-study  countries, but the areas and the types of actions overlap and represent  similar approaches to expanding broadband deployment and adoption. In  addition, FCC acknowledges that findings from its own international  research, conducted in part to implement the Broadband Data  Improvement Act, influenced aspects of the plan. Implementing the  plan’s recommendations will be challenging, requiring the coordination of  multiple public- and private-sector entities.
Table 4 compares the five types of actions taken in our case-study  countries with the plan’s four areas.
subsections: section_title: Establish Broadband Plans and Provide Leadership to Guide Deployment of Infrastructure
paragraphs: Just as the governments of our seven selected countries established plans  and policies to guide their efforts to expand broadband deployment and  adoption, the National Broadband Plan contains recommendations to  FCC, Congress, and federal agencies designed to guide future federal  efforts. The plan also calls for a number of actions to facilitate  measurement of its effects over time. These actions include collecting  more data to support benchmarking against goals and tasking FCC to  create a Broadband Performance Dashboard on its Web site to display key  indicators aligned with the plan’s long-term goals. The purpose of the  dashboard is to promote public understanding of important broadband  performance metrics and to clearly communicate the progress and  effectiveness of efforts to implement the plan. Specifically, the dashboard  is expected to detail the types of metrics that FCC should collect and  analyze in order to track progress toward the plan’s goals. Table 5  illustrates the dashboard information for one performance goal set forth  by the National Broadband Plan.
In addition to plans and policies, senior governmental leadership was  important for other countries to achieve or progress toward their  broadband goals. Similarly, the National Broadband Plan identifies  leadership commitment as a key to its success by recommending that the  executive branch create a Broadband Strategy Council consisting of senior  White House, National Economic Council, and Office of Management and  Budget officials, as well as high-level officials from FCC, NTIA, and other  agencies with a role in the plan’s implementation. The recommended  council would coordinate and implement the National Broadband Plan’s  recommendations across executive branch agencies.
section_title: Provide Government Funding through Public/Private Partnerships
paragraphs: In all seven selected countries, governments have provided funding  through various mechanisms, such as grants and loans, to help pay for the  deployment of infrastructure in areas private enterprise deems  unprofitable. Similarly, the National Broadband Plan proposes various  national funding strategies and mechanisms that are consistent with a  federal role in ensuring equal access to broadband services. For example,  to help accelerate the rate of broadband deployment to unserved areas,  the plan recommends that Congress consider providing funding to areas  where no business case exists for private-sector investment.
In all seven of our selected countries, public/private partnerships have  helped fund the deployment of broadband infrastructure. These  partnerships often help maximize government resources and minimize risk  for the private investors. Although the National Broadband Plan  recognizes the value of public/private partnerships in efforts to increase  adoption, it does not explicitly recommend their use to help fund  broadband deployment. However, it does recommend that Congress make  clear that tribal, state, regional, and local governments can build  broadband networks. Specifically, the plan says that when all other  options for meeting residents’ broadband needs are exhausted, it should  be clear that local authorities can build broadband networks. Stakeholders  from some of our selected countries, as well as in the United States,  commented on the advisability of providing some guidance to aid  municipalities in forming such partnerships and building broadband  networks, although we did not assess the need for such guidance.
section_title: Promote Competition
paragraphs: Each of our case-study countries found that competition had been a key  component of increasing innovation and, for several of the countries,  reducing prices. Six of our seven case-study countries found that  promoting competition by unbundling the telephone networks allowed  competitors to provide broadband service using existing DSL technology,  often avoiding the need for repeated and costly deployment of additional  telephone infrastructure. The National Broadband Plan has also identified  competition as a key component, noting that “Competition is crucial for  promoting consumer welfare and spurring innovation and investment in  broadband access networks. Competition provides consumers the benefits  of choice, better service and lower prices.” However, according to FCC,  it is unclear whether the broadband “ecosystem” in the United States is  competitive, so the government needs to continue to study the current  competitive environment and the future implications of the current  competition structure in America. To promote competition in the  wholesale market, the plan calls for FCC to “comprehensively review its  current policies and develop a cohesive and effective approach to  advancing competition through its wholesale access policies.” One  specific recommendation is for FCC to establish an analytical approach to  resolving disputes to ensure that the rates, terms and conditions that  incumbent local exchange carriers charge to competitors for special  access services are just and reasonable, since the plan recognizes that the  adequacy of the existing regulatory regime has been subject to much  debate. However, the plan does not recommend that FCC oversee the  prices incumbent carriers charge competitors to make certain they are  cost-based, as is done by several countries, including the United Kingdom  and France.
In addition, the plan finds that expanding wireless broadband  infrastructure by increasing the availability of wireless spectrum would  help spur competition in the United States. Currently, consumers who  value high download and upload speeds would not consider wireless  broadband to be a substitute for wireline service. However, additional  spectrum would make faster download speeds possible, allowing  companies to offer wireless services that would compete more effectively  with the capabilities of wireline broadband services.
section_title: Implement Strategies to Increase the Usefulness of the Internet to the Public
paragraphs: All seven of our selected countries have taken actions to increase the  number of government services available to the public on the Internet, as  has the United States. According to the United Nations (UN),   e-government is a powerful tool and essential to the achievement of  internationally agreed-upon development goals, including the Millennium  Development Goals. In 2010, the United States ranks second, behind  South Korea, in advanced e-service delivery, up from fourth place in 2008.  In fact, according to the UN, the United States has been a leader in the  provision of e-government services. The National Broadband Plan would  continue to strengthen this leadership by enhancing the availability and  capability of e-government services across the federal government.  Specifically, the plan calls for the Office of Science and Technology Policy  within the Executive Office of the President to develop a 5-year strategic  plan for online service delivery.
In addition, to advance the provision of e-government services, the plan  includes more than a dozen recommendations aimed at making a wider  array of citizen-based services available online to promote the use of  digital media content across government. For example, one  recommendation calls for executive branch and independent agencies to  make all responses to Freedom of Information Act requests available  online. Currently, there are no guidelines on the format to be used in  responding to such requests.
section_title: Provide Digital Literacy Training and Consumer Subsidies
paragraphs: Finally, several of our case-study countries have provided digital literacy  training or consumer subsidies or both to increase broadband usage, some  targeting certain subgroups, such as the elderly and the poor. Digital  literacy generally refers to a variety of skills associated with using  information and communications technology (ICT) to find, evaluate,  create, and communicate information. It also includes the ability to  communicate and collaborate using the Internet—through blogs, self- published documents and presentations, and collaborative social  networking platforms. The National Broadband Plan recommends digital  literacy training as a means of expanding broadband adoption, pointing  out that, according to an FCC survey conducted in 2009, 22 percent of  nonadopters in the United States identified lack of digital literacy as a  main barrier to adoption, second only to cost. Describing digital literacy as  a necessary life skill, much like the ability to read and write, the plan  recommends that the federal government create a Digital Literacy Corps to  conduct training and outreach. According to the plan, the corps would  help nonadopters overcome discomfort with technology and fears of  getting online while also helping people become more comfortable with  the content and applications relevant to them.
To further increase broadband adoption, the National Broadband Plan  identifies several options available to the government. For example, to  encourage adoption among low-income groups, the plan recommends that  FCC expand the Lifeline Assistance (Lifeline) and Link-Up America (Link- Up) programs to make broadband more affordable for low-income  households. Currently, Lifeline lowers the cost of monthly service for  eligible consumer households by providing support directly to service  providers on behalf of those households, and Link-Up provides a one-time  discount on the initial installation fee for telephone service but not for  broadband. The plan also recommends that FCC consider providing free  or very-low-cost wireless broadband service as a means to address or  reduce the cost barrier to adoption by offering a band of wireless  spectrum dedicated to free or low-cost broadband service as a  complement to Lifeline.
section_title: Implementing the National Broadband Plan Will Be Challenging
paragraphs: While the United States plans to take actions similar to those of other  leading countries to achieve the National Broadband Plan’s goals of  universal access and increased usage and adoption, implementing the plan  will be challenging. Action will be required by governments at all levels  and the private sector to deploy broadband infrastructure to the last 5  percent of households at a reasonable cost and to promote broadband  usage and adoption by increasing digital literacy and making broadband  services more affordable for certain populations, especially the elderly and  the economically disadvantaged. Furthermore, as the Chairman, FCC, has  acknowledged, implementing the plan will require obtaining sufficient  funding and coordinating the work of multiple federal, state, local, and  private entities, among other actions. It remains to be seen whether and  how effectively federal agencies will be able address these challenges and  implement the plan’s recommendations, as well as what the private sector  will do to further deployment and adoption.
section_title: Agency Comments
paragraphs: We provided a draft of this report to FCC for review and comment. FCC  provided technical comments, which we incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees, the Secretary of Commerce, the  Secretary of Agriculture and the Chairman of the Federal Communications  Commission. The report will also be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Contact information and major contributors to  this report are listed in appendix II.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the status of broadband deployment and adoption in  developed countries, we reviewed data collected by the Organisation for  Economic Co-operation and Development (OECD) for the 30 countries  that were members of OECD as of January 1, 2010. Chile has since become  a member, but relevant data were not available for our review.  Specifically, we considered broadband wireline infrastructure coverage by  country, total subscriptions by country, and subscriptions per 100  inhabitants. To understand demographic and socioeconomic factors  associated with broadband deployment and adoption, we considered  information obtained from several sources, including the World Bank for  income levels by country and numbers of personal computers per 100  inhabitants; the Central Intelligence Agency (CIA) World Factbook for  population and land mass statistics; and the Federal Communications  Commission (FCC) for demographic information on current broadband  adoption levels in the United States. For analysis of broadband speeds, we  obtained and reviewed data from Akamai Technologies, Inc. For analysis  of average broadband prices, we obtained and reviewed data from OECD.
We assessed the reliability of OECD and Akamai Technologies, Inc., data  by (1) reviewing existing information about the data and the systems that  produced them; (2) interviewing agency and company officials  knowledgeable about the data; and (3) performing manual testing for  missing data, outliers, and obvious errors in required data elements. We  determined that these data were sufficiently reliable for the purposes of  this report. We assessed the reliability of the World Bank, CIA, and FCC  data by (1) reviewing existing information about the data and the systems  that produced them and (2) performing manual testing for missing data,  outliers, and obvious errors in required data elements. We determined that  these data were sufficiently reliable for the purposes of this report.
To better understand the status of broadband deployment in the United  States, we interviewed relevant federal government officials at FCC, the  Department of Commerce’s National Telecommunications and  Information Administration (NTIA), and the Department of Agriculture’s  Rural Utilities Service (RUS). We also interviewed officials of companies  that provide broadband service in multiple states—Verizon, AT&T,  Comcast, and Windstream—and representatives of a national consumer  welfare organization, Consumers Union. To help inform our analysis of  public/private partnerships, we interviewed officials of a public/private  partnership in Bristol, Virginia, which was highlighted in the National  Broadband Plan, as well as representatives of other public/private  partnerships recommended to us. These included a consortium of  public/private partnerships in Utah, an official of ECFiber in Burlington,  Vermont, and a former Motorola executive working on a public/private  partnership in Massachusetts. To better inform our understanding of the  deployment of fiber infrastructure, we interviewed representatives of the  Fiber-to-the-Home Council.
To determine the actions stakeholders in selected countries have taken to  increase broadband deployment and adoption in the last decade, we first  chose 7 countries for case-study analysis. We limited our potential field of  countries to those that were members of OECD and were ranked among  the top 20 in broadband subscriptions per 100 inhabitants as of the first  quarter of 2009. We used OECD’s list of country rankings as our basis for  selecting countries because it is the only annually updated report that  offers a comprehensive analysis of data provided by governments.
We analyzed the demographic profile of each of these countries, including  its land area, population and population density, gross national income  (GNI), and actions its government had taken to increase broadband  deployment and adoption. Actions taken included, but were not limited to,  national broadband plans, broadband deployment plans, specific adoption  strategies, and e-government services. We chose countries that were in  some way similar to the United States and recognized as being particularly  successful in increasing broadband deployment or adoption. To determine  if a country’s government had taken action to increase the deployment of  broadband infrastructure to rural or underserved areas, we performed a  literature search of publicly available government documents, as well as of  international documents that provided country-specific information about  broadband deployment, including reports from OECD, the European  Union, the International Telecommunication Union (ITU), and the World  Bank. Furthermore, to understand each country’s broadband adoption  strategies, we conducted literature reviews and reports from government  agencies and OECD. We also reviewed the United Nations’ (UN) E- Government Survey 2010 to understand and compare OECD countries’  efforts to deliver citizen-based services over the Internet. We assessed the  reliability of the UN data by (1) reviewing existing information about the  data and the system that produced them and (2) performing manual  testing for missing data, outliers, and obvious errors of required data  elements. We determined that these data were sufficiently reliable for the  purposes of this report.
The seven countries we selected for case-study analysis were Canada,  France, Japan, the Netherlands, South Korea, Sweden, and the United  Kingdom. Before visiting these seven countries, we identified key contacts  though research and agency contacts. To learn what actions governments  and broadband providers have taken to increase broadband deployment  and consumer adoption, and how those actions are viewed by various  stakeholders, we visited each of the seven countries, conducted other in- person research, and collected documents. Using a semistructured  interview instrument, we obtained information from key contacts in each  country (see fig. 3), including government officials, representatives of  broadband service providers (both incumbents and competitors), officials  of localities involved in providing broadband services through  public/private partnerships, and representatives of groups dedicated to  protecting consumers. Following our visits to these seven countries, we  reviewed and analyzed the information collected, including current  policies, plans, and guidance issued by responsible government agencies,  regulatory authorities, and broadband providers.
To determine how recommendations outlined in the National Broadband  Plan reflect the actions of selected countries to increase broadband  deployment and adoption, we analyzed the results of our case studies and  placed the actions of the 7 countries in five categories. We placed the  actions to increase deployment in two categories—(1) instituting plans  and policies and (2) providing government funding through public/private  partnerships—and the actions to increase adoption in three categories— (3) increasing competition, (4) implementing strategies to increase the  usefulness of the Internet to citizens, and (5) providing digital literacy  training and consumer subsidies. We then analyzed relevant  recommendations outlined in the National Broadband Plan and  interviewed relevant individuals at FCC to determine how actions  recommended in the plan align with the five identified categories.  However, we did not evaluate the potential impact or effectiveness of the  recommendations made in the plan.
We conducted this performance audit from June 2009 to September 2010,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Dave Sausville, Assistant  Director; Pedro Almoguera; Elizabeth Curda; Bess Eisenstadt; Muriel  Forster; Dave Hooper; Hannah Laufe; SaraAnn Moessbauer; Josh Ormond;  Madhav Panwar; Sandra Sokol; Spencer Tacktill; and Nancy Zearfoss  made key contributions to this report.