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G7 Broadband Dynamics G7 Broadband Dynamics How Policy Affects Broadband Quality in Powerhouse Nations RICHARD BENNETT AMERICAN ENTERPRISE INSTITUTE G7 Broadband Dynamics Richard Bennett Table of Contents EXECUTIVE SUMMARY V THREE BROADBAND POLICY MODELS V THREE PHASES OF BROADBAND DEVELOPMENT VI UNIVERSAL SERVICE VI MEASURING PERFORMANCE VII THE BROADBAND SCORECARD VII OVERVIEW 1 WHY THE G7? 1 BROADBAND’S ECONOMIC ROLE 2 BROADBAND TECHNOLOGIES 3 STARTING POINTS 4 PROGRESS 10 LEADERSHIP 11 BROADBAND COVERAGE 12 HOMES PASSED BY BASIC BROADBAND TECHNOLOGIES 12 NUMBER OF PROVIDERS IN THE BASIC BROADBAND STAGE 14 NUMBER OF PROVIDERS IN THE US 15 DEPLOYMENT OF ADVANCED BROADBAND IN THE G7 16 GIGAMANIA: 1,000 MBPS NETWORKING 21 GROSS FIBER DEPLOYMENT 22 BROADBAND SUBSCRIPTION RATES 23 SUBSCRIPTION RATE 23 SUBSCRIPTION RATE BY TECHNOLOGY 23 WIRELESS SUBSCRIPTION RATE 25 SUBSCRIPTION RATE BY AGE GROUP 28 POLICY ISSUES 30 BROADBAND PERFORMANCE 31 APPLICATION REQUIREMENTS 32 WIRED NETWORK PERFORMANCE 33 MOBILE NETWORK PERFORMANCE 39 LTE SPEED VS. COVERAGE 43 i G7 Broadband Dynamics Richard Bennett BROWSING SPEED 46 ADVERTISED SPEED VERSUS ACTUAL SPEED 50 NETWORK UTILIZATION 56 BROADBAND PRICES 59 GOOD AND BAD CRITERIA 59 ERRORS OF SELECTION AND OMISSION 59 PRICE SURVEYS 61 PERCEIVED VALUE 63 CONSUMER VALUE 64 POLICY ANALYSIS 65 INITIAL US POLICY 65 THE GREAT PIVOT 65 OTHER G7 CASE HISTORIES 66 SUMMARY OF RESULTS 77 CONCLUSION 79 ACKNOWLEDGMENTS 80 ABOUT THE AUTHOR 80 NOTES 81 ii G7 Broadband Dynamics Richard Bennett Table of Figures Figure 1. Internet Heat Map ..................................................................................................................................................... 1 Figure 2. G7 Share of Population in Most Populated 10 Percent of Regions ...................................................... 5 Figure 3. G7 UrBan Population DistriBution in Percent ............................................................................................... 5 Figure 4. G7 UrBan Density Index .......................................................................................................................................... 6 Figure 5. G7 Rural Persons per Sq. Km. of AraBle Land ............................................................................................... 7 Figure 6. Rural Area Served By Each Internet Exchange Point in Nation or NearBy ....................................... 7 Figure 7. Cable TV Coverage in 1999 ................................................................................................................................... 8 Figure 8. Mobile SuBscriptions per 100 People in 1999 .............................................................................................. 9 Figure 9. G7 DSL Coverage in 2009 (Except as Noted) ............................................................................................... 12 Figure 10. G7 Cable Modem Coverage in 2008 .............................................................................................................. 13 Figure 11. G7 FiBer Coverage in 2009 and 2012 .......................................................................................................... 13 Figure 12. G7 3G Mobile Coverage in 2009 ..................................................................................................................... 14 Figure 13. G7 Bimodal Competition in 2009 .................................................................................................................. 14 Figure 14. G7 Trimodal Competition in 2009 ................................................................................................................ 15 Figure 15. US UrBan versus Rural BroadBand Competition .................................................................................... 15 Figure 16. US Access to Multiple Wired Broadband Choices ................................................................................... 16 Figure 17. G7 NGA Coverage, 2012 ..................................................................................................................................... 17 Figure 18. US UrBan and Rural Broadband By Capacity, 2012 ............................................................................... 17 Figure 19. G7 VDSL Coverage, 2012 ................................................................................................................................... 18 Figure 20. G7 DOCSIS 3.x Coverage, 2012 ........................................................................................................................ 19 Figure 21. G7 FTTH Coverage, 2012 ................................................................................................................................... 20 Figure 22. LTE Coverage in 2012 ......................................................................................................................................... 20 Figure 23. US Gigabit Network Deployments ................................................................................................................. 21 Figure 24. G7 Wired Broadband SuBscription Rate ..................................................................................................... 23 Figure 25. Wired Broadband SuBscription Rate By Population and Technology, 2013 .............................. 24 Figure 26. FiBer SuBscriptions as Percent of All Broadband SuBscriptions ..................................................... 24 Figure 27. G7 FTTx Coverage and Takeup ....................................................................................................................... 25 Figure 28. G7 Smartphone Adoption .................................................................................................................................. 26 Figure 29. G7 Broadband Adoption Growth By Technology .................................................................................... 27 Figure 30. G7 Broadband Adoption Growth by Technology, Details ................................................................... 28 Figure 31. Seniors Continue to Lag in Tech Adoption ................................................................................................ 29 Figure 32. Internet and Broadband Use By Senior Age Groups .............................................................................. 29 Figure 33. US PC and Internet Use By Age Group ......................................................................................................... 30 Figure 34. Download Times for Entertainment Media Files .................................................................................... 32 Figure 35. Medium-Capacity Broadband Prevalence, 2007–14 ............................................................................. 34 Figure 36. G7 Percent of Connections Faster Than 4 MBps, Q1 2013–Q1 2014 ............................................. 35 Figure 37. High-Capacity Broadband Prevalence, 2007–14 .................................................................................... 36 Figure 38. G7 Percent of Connections Faster Than 10 MBps, Q1 2013–Q1 2014 ........................................... 36 Figure 39. Network Capacity in G7 Nations, 2007–14 ............................................................................................... 37 Figure 40. G7 Broadband Capacities, Q1 2013 and Q1 2014 ................................................................................... 38 Figure 41. Ookla Survey of G7 Wired Network Speed ................................................................................................ 39 Figure 42. G7 Mobile Broadband Speed, Q1 2014 ........................................................................................................ 40 Figure 43. G7 Ookla MoBile Download Speed ................................................................................................................ 41 Figure 44. G7 OpenSignal LTE Speed Survey .................................................................................................................. 42 Figure 45. G7 Mobile Speed Test Scores ........................................................................................................................... 43 Figure 46. G7 OpenSignal LTE Coverage Percent By Network ................................................................................ 44 Figure 47. G7 OpenSignal LTE Speed By Network ....................................................................................................... 45 Figure 48. G7 OpenSignal LTE Speed as Function of Coverage .............................................................................. 45 Figure 49. Browsing Experience in G7 Nations, 2007–14 ........................................................................................ 46 Figure 50. Average Size of WeB Pages, May 15, 2014 ................................................................................................. 47 Figure 51. G7 WeB Speed and Page Load Time ............................................................................................................. 48 Figure 52. G7 WeB Page Load Time By Network Type ............................................................................................... 48 Figure 53: G7 WeB Page Delay Factors. ............................................................................................................................ 49 iii G7 Broadband Dynamics Richard Bennett Figure 54. SamKnows
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