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Next Generation Connectivity: a Review of Broadband Internet Transitions and Policy from Around the World

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Next Generation Connectivity: a Review of Broadband Internet Transitions and Policy from Around the World Next Generation Connectivity: A review of broadband Internet transitions and policy from around the world October 2009 DRAFT at Harvard University Next Generation Connectivity Contributors This report represents the outcome of a substantial and engaged team effort, most extensively by Berkman Center researchers, with many contributions from others elsewhere at Harvard and in other institutions and centers around the world. I am deeply indebted to the many and diverse contributions that each and every one of them made. The project would not have been possible without the tremendous effort and engagement by the leadership team. Robert Faris (skeptical reading; study design; country case studies) Urs Gasser (overall leadership; country case studies; international research; reading/editing) Laura Miyakawa (project manager; pricing studies; quantitative analyses) Stephen Schultze (project leadership; bibliographic research design and implementation; country case studies ) Each of our country overviews and annexes was researched, authored and edited by a fantastic group of colleagues, research assistants and friends that resulted both in the overviews and in informing the main document. Jerome Baudry James Kwok Eliane Bucher Alan Lenarcic (statistics, unbundling econometrics) Anjali Dalal Olivier Sautel Gildas de Muizon Marta Stryszowska Jan Gerlach Lara Srivastava Jock Given Andrea Von Kaenel Hank Greenberg Asa Wilks (statistics: urbanicity & poverty; actual Pascal Herzog speed tests analysis) This report would also not been possible without the researching, annotating, copy editing, spreadsheeting, cheerleading and organizing provided by Berkman Center staff and interns and the Harvard Law School Library staff. Catherine Bracy Ramesh Nagarajan Bruce Etling Caroline Nolan Sawyer Carter Jacobs Antwaun Wallace Colin Maclay Catherine White Jillian York Seth Young 2 Next Generation Connectivity I am also very pleased to acknowledge the help from colleagues and people with knowledge and access to data who helped think through the design of the studies, answer specific questions, or otherwise improved the work and our understanding immeasurably. Nathaniel Beck Dominique Boullier Michael Burstein (critical reading of the main document) John de Ridder (access to data included in econometrics of unbundling) Jaap Doleman (Amsterdam CityNet information) Antii Eskola (Finnish telecommunications) Epitiro (answers to questions about actual testing data produced by the company) William Fisher Daniel Haeusermann Mizuko Ito (Japanese broadband uses) Gary King William Lehr Francois Lévêque Jun Makihara Ookla Net Metrics; Mike Apgar (access to speedtest.net data) Simon Osterwalder (Switzerland) HyeRyoung Ok (Korean usage patterns) Taylor Reynolds (extensive answers about OECD data) James Thurman Derek Turner (data for replicating urbanicity study) Dirk Van der Woude (fiber in Europe; Amsterdam) Nico Van Eijk (Dutch and European telecommunications policy) Herman Wagter (municipal fiber; Amsterdam; topology) Sacha Wunsch-Vincent Finally, I am proud and grateful of the support we received from the Ford Foundation and the John D. and Catherine T. MacArthur Foundation. Both foundations were remarkably open and flexible in their willingness to receive and process our requests for funding in lightening speed, so as to allow us to respond to this highly time-sensitive request to support the FCC’s efforts, while maintaining complete independence from the agency. We have been extremely fortunate in our relationships with both foundations, and I am particularly grateful to the remarkable people whom we have been able to work on this project: Jenny Toomey from Ford, and Connie Yowell and Valerie Chang from MacArthur. Yochai Benkler, Principal Investigator Cover photo by TIO on FLICKR 3 Next Generation Connectivity Table of Contents Contributors .............................................................................................................................................. 2 1 Executive Summary and Introduction............................................................................................ 9 1.1 A globally shared goal: Ubiquitous, seamless, high-capacity connectivity in the next generation.................................................................................................................................. 9 1.2 A multidimensional approach to benchmarking helps us separate whose experience is exemplary, and whose is cautionary, along several dimensions of broadband availability and quality ....................................................................................................................................... 9 1.3 Policies and practices...............................................................................................................11 1.4 Investments in infrastructure and demand side programs....................................................... 13 1.5 Overview of this document..................................................................................................... 14 2 What is “broadband”? ................................................................................................................... 16 2.1 High speed networks............................................................................................................... 16 2.2 Ubiquitous seamless connectivity........................................................................................... 19 2.3 Next generation connectivity: Recap...................................................................................... 20 2.4 Universal access and next generation plans............................................................................ 21 2.5 Why do we want next generation connectivity?..................................................................... 21 3 International comparisons: Identifying benchmarks and practice models............................... 26 3.1 Why use international comparisons? ...................................................................................... 26 3.2 Measures focused on users/consumers vs. measures focused on business............................. 27 3.3 Penetration: Fixed................................................................................................................... 29 3.4 Penetration: mobile and nomadic broadband.......................................................................... 39 3.5 Capacity: Speed, fiber deployment, and emerging new actual measurements....................... 47 3.6 Price ........................................................................................................................................ 58 3.7 Summary benchmarking report............................................................................................... 67 3.8 Annex : Statistical Modeling of Poverty, Income, and Urbanicity on OECD Broadband Penetration per 100 ................................................................................................................. 69 4 Policies and practices: Competition and access ........................................................................... 74 4.1 Competition and access: Highlights........................................................................................ 75 4.2 Overview................................................................................................................................. 77 4.3 The second generation Internet: From dial-up to broadband.................................................. 80 4.4 Baseline: The United States .................................................................................................... 82 4.5 Japan and South Korea: Experiences of performance outliers ............................................... 83 4.6 The highest performers in Europe: Mid-sized, relatively homogeneous societies with (possibly) less contentious incumbents: the Nordic Countries and the Netherlands.............. 89 4.7 The larger European economies: Diverse responses to recalcitrant incumbents.................... 95 4.8 Regulatory abstention (and hesitation): Switzerland, New Zealand, and Canada................ 106 4.9 Firm-level price and speed data.............................................................................................112 4.10 Econometric analysis .............................................................................................................115 4.11 Looking forward by looking back: Current efforts to transpose first generation access to the next generation transition.......................................................................................................117 4.12 Annex: Pricing ..................................................................................................................... 126 4.13 Annex: Unbundling econometric analysis........................................................................... 138 5 Mobile broadband......................................................................................................................... 152 5.1 The consistently high performers: Japan and South Korea .................................................. 154 5.2 High mobile, low fixed performers....................................................................................... 155 4 Next Generation Connectivity 5.3 Low mobile, high fixed countries......................................................................................... 156 5.4 The Nordic countries............................................................................................................
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