Return to Regulation Will Not Help U.S. Broadband Growth, Barton Says

Return to Regulation Will Not Help U.S. Broadband Growth, Barton Says

U.S. Rep. Joe Barton, R-Texas, ranking member of the House Energy and Commerce Committee, issued the following statement today as part of a Telecommunications and the Internet Subcommittee hearing entitled, "Broadband Lessons from Abroad":

"Thank you, Chairman Markey, for holding this hearing on Broadband Lessons from Abroad.

"I'd like to clarify a few misconceptions about broadband deployment in this country that are giving some of us an inferiority complex, because a superiority complex would be closer to the truth. While it is true that the current rankings from the Organization for Economic Cooperation and Development list Denmark No. 1 and the United States No. 15 in overall broadband penetration, that doesn't even begin to tell the story.

"For example, the OECD does not count the special access lines that many U.S. businesses use for broadband. As a result, the OECD rankings greatly under represent U.S. businesses as compared to those in other countries, which use DSL.

"Focusing on penetration can also be misleading. Other OECD data also rank the United States first with the most broadband subscribers—we had 58.14 million as of December 2006. In fact, of all the broadband connections in all of the OECD's 30 members, nearly a third are in the United States.

"The OECD rankings also do not account for the widely varying geographies and population densities. As Chairman Markey has pointed out before, comparisons are questionable when most people in Iceland live in Reykjavik, and most people in South Korea live in Seoul.

"If we break U.S. residential broadband penetration down by state based on a May 2006 Pew study, the size comparisons become more realistic. Doing so, we find that the top three states have higher penetration than Denmark's 49 percent, with 53 percent for New Jersey, 53 percent for California, and 51 percent for Connecticut. In fact, U.S. states take eight of the top 10 spots in terms of residential broadband penetration if ranked with European Union countries. Even the bottom three states would be above the EU average of 23 percent, with 31 percent for Vermont, 29 percent for Mississippi, and 27 percent for West Virginia.

"U.S. broadband penetration is also continuing to grow rapidly, thanks to our return to deregulatory policies. Recent FCC data show that since DSL was classified as an information service in September 2005, the number of DSL lines has increased by 38 percent and the total number of high-speed lines has increased 52 percent. Even better numbers are expected for this year.

"The United States also benefits from robust competition between cable and phone companies that other countries lack. In the United States, 51 percent of broadband penetration is attributable to cable modem service as of July 2006, with 42 percent coming from DSL and 7 percent from other sources, according to an HSBC report. By comparison, about 79 percent of the market in Europe is DSL. It is this lack of platform alternatives that has led the EU to rely on regulatory approaches, such as unbundling.

"Their lack of platform alternatives and reliance on network sharing is also the reason why EU countries will soon be slowed by the speed and capacity limitations presented by copper DSL technology. Companies in Europe generally are not deploying cable or fiber-optic facilities to the same extent as we are in the United States, and it is those types of facilities that will be necessary for the next generation of services.

"We also have a flourishing wireless industry that is already adding yet another broadband alternative. And if we get the rules right for the upcoming 700 MHz auction made possible by our DTV legislation, we will have even more spectrum available that is ideal for next generation broadband services.

"None of this is to say that we should rest on our laurels. But if we want to continue driving broadband penetration, the last thing we should do is return to regulation. Market forces will serve us much better by encouraging competition, investment and deployment.

"I yield back."

Source