Europeans Envy U.S. Broadband

Why do some persist in negatively comparing U.S. broadband to Europe’s?   Roslyn Layton, a visiting fellow at AEI’s Center for Internet, Communications and Technology Policy (where our fair editor is also a visiting fellow) penned a good piece on the subject today based on her new report “The European Union’s Broadband Challenge.”  Some highlights:

“EU has only pockets of high speed networks and faces an investment shortfall of €110-170 billion ($150-230 billion) to reach its broadband goals” …

“A decade ago, the EU accounted for one-third of the world’s communications infrastructure capital expenditure. That amount has fallen to less than one-fifth today. Americans … account for 4% of the world’s population, but enjoy one-fourth the world’s broadband capex. In fact, per capita investment in the U.S. is twice that of Europe, and the gap is growing.”

And to the claim we pay more in the U.S. for broadband, as Roslyn points out in her report:

“Critics forget to include the impact of value added taxes (as high as 27% in some countries) and compulsory media license fees (adding hundreds of dollars per year to the cost of every broadband subscription).”

Sans VAT, we pay less.  The Europeans also envy our robust Internet economy, our prevalence of speeds of 100 Mbps or greater and cable, LTE, and Fiber to the Home (FTTH).   Nearly three-quarters of Europeans rely on DSL for broadband versus a little more than a third of Americans.

So much for the vaunted European broadband model.  What approach are many European leaders now advocating?  The American model of “infrastructure-based competition and private investment.”

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  • yair_marx

    In an article in The Verge, your very own Roslyn Layton says that in France, consumers have more choice than we do, because of local loop unbundling.

    • Richard Bennett

      Roslyn is a fine analyst, but she doesn’t have any connection to HTF. She’s right that Europeans can choose among DSL providers, and she correctly observes that they have very little access to cable and fiber because the policy enabling DSL competition.

  • SteelCrysis

    I just want to point out some constructive criticism of Roslyn’s study and ask your opinion of it:
    “While the report provides what appears to be an in-depth explanation of the hidden fees that contribute to differences in broadband pricing in Europe, it tends to oversimplify both the U.S.’s and Europe’s subsidy and tax structures, and uses blanket terms like “Local TV Tax,” which do not fully explain what is being examined, and make it difficult to validate or replicate the research. The author compiles this research from individual customer bills which can vary and are difficult to verify. Additionally, this comparison is made between the U.S. and Denmark, a country with some of the highest taxes in the EU. Extracting which fees or taxes contribute to broadband pricing specifically is quite difficult. The AEI report points to the success of the U.S.’s digital economy and broadband market and suggests that the EU would be better off if its broadband market was modeled after the U.S. However, it largely ignores many of the shortcomings in the U.S. identified by this report and others.”

    This is a good summary of the OTI study, keep in mind that it’s from 2014:
    “One common argument for why US broadband speeds and availability lag the rest of the world is that the United States’ population density is simply much lower than these other countries. The Open Technology Institute’s 2014 report on the state of US broadband, which offers data broken down by city,
    dispels this notion. The report is vast and offers a great many graphs at various price points, but the following is indicative of how the US generally ranks:

    At $50 (evaluated via purchasing power parity), the US doesn’t just lag Hong Kong, Seoul, and Tokyo — we lag London, Prague, and Dublin with speeds that are a fraction of what other countries provide as a matter of course. At 25Mbps, the only US cities remotely competitive with the international market are Google Fiber cities.”

    • Richard Bennett

      The OTI “Cost of Connectivity” studies have been roundly criticized for their shoddy methodology but they were given a lot of play by bloggers looking for clicks. Their primary flaw is cherry picking: the compare the advertised prices of broadband in a very small sample of US cities to an equally small group of international cities. This method highlights the benefit of local loop unbundling, low prices in small areas because of open access by retail ISPs to DSL and fiber infrastructure at capped rates. LLU ceases to look good in the suburbs, exurbs, and rural areas.

      OTI accuses Layton of getting her price info from actual bills, while OTI gets theirs from unverifiable ads. So that much is pretty much pot/kettle. Their accusations of cherry-picking are actually quite hilarious. Layton compares Denmark to the US because that’s where she lives; she’s looking at her own bills.

      US policy leads to higher speed networks for more people than does LLU, effectively a strategy for stagnation. Our networks cover more miles than do the networks in most of the EU and Asia, and our usage is much heavier; easily twice as many gigabytes per month as the norm elsewhere. Those factors – combined with high broadband taxes – explain the price variations.

      • SteelCrysis

        Thanks. I’d like to hear what you have to say about Japan’s fiber ISPs now offering 10 Gbps FTTH for $100 per month. Sure, there’s the “best effort” caveat, but at least the effort’s there:

        • Richard Bennett

          According to the Speedtest Global Index – – the average broadband download speed in Japan is 80.48 Mbps, while the US average is 84.66. It appears that Japan has some catching up to do, regardless of Venture Beat’s claims.

          Wi-Fi can’t go 10 Gpbs and the average website runs at 12 -15 Mbps, so an arbitrarily fast wire doesn’t do the consumer any good.

          • SteelCrysis

            Thanks. Three final things to discuss:

            I don’t know if there is a specified minimum time for an outage to be presumed as a net neutrality violation, but I’m pretty sure a day or less won’t cut it.

            What are your thoughts on this?

            Finally, why does the Disqus thread for this post show up, but not the Disqus threads for other, more recent blog posts?

          • Richard Bennett

            The Tutanota incident appears to be a Reddit myth. According to a message to Dave Farber’s IP list it didn’t happen:

            “All connections between Comcast and Tutanota were operating properly, and we could see no evidence of a problem. We also have no record of any sort of security-related incident that may have triggered an issue.

            We’re talking with them (see about this so that we can help figure this out with them. The only modestly detailed report that I could find was on Reddit where one user said that they could connect to the site but then authentication failed, but that’s not much to go on either.

            We will continue to investigate, but without further information it’s not clear what caused the reported issue.
            – Jason Livingood / Comcast ”

            The #18 ranking for Broadband Access Infrastructure in Brotman’s study is sourced to the a 2015 report by the World Wide Web Foundation. When I track down that report, it’s probably going to cite Akamai or Speedtest, the only comprehensive surveys that were going at the time. Akamai has stopped reporting broadband speed, but Speedtest Global Index ranks the US #9 today, behind some tiny countries such as Singapore, Iceland, Hong Kong, and South Korea that don’t face the geographic and population challenges we do. Brotman ranks the US at #1 for overall innovation, so broadband infrastructure is right where it should be.

            Disqus displays newest comment first.

          • SteelCrysis

            Thanks, didn’t know that the first one was a myth. As for the last one, you misunderstood my question. On more recent blog posts here, Disqus isn’t showing up at all.

          • Richard Bennett

            I’ll look into the Disqus issue.

Comments are closed.