The 1996 Telecom Act and Broadband at Ten

Happy birthday this week: the famed Telecommunications Act of 1996 became law this week ten years ago on February 7, 1996.

To celebrate, take a look at the good coverage on the Senate Commerce Committee Hearing on Net Neutrality from Jeff Pulver’s coverage from Washington this week. I like Jeff’s commentaries and enjoyed the Pulver Report for several years.

Over the last ten years we’ve seen incredible growth: today there are more than 70 million Americans on broadband connections, a huge jump from the approximately 5 million six years ago in 2000. Last fall, Lisa DiCarlo (senior editor at noted that the adoption rate of high-speed broadband Internet is now slowing here. The US is far behind Korea, the Netherlands, Denmark, Iceland and (gasp) even Canada, which unlike some of the smaller nations with great population density has some incredible distance challenges. DiCarlo wrote: “That the U.S. is a laggard in broadband penetration–the country ranks 12th globally–could have implications for America’s social and economic standing in the world.”

Often, people don’t have a have a difficult time justifying the move as that the cost for “slow” DSL (up to 768Kbps downstream for $15-20/month) is just about a wash: for about the cost of a second POTS phone line, consumers can move to broadband and leave behind the second line (or keep the second line free for the kids). Anyone else remember the installation of their expensive dual channel ISDN line? ; )

But I’d argue that in some cases adoption slows for many of the same reasons subscribers were slow to initially take on premium tiers of cable and satellite TV: 500 channels and nothing I’m interested in is on. In the case of the Internet, it’s millions of home pages and few are compelling or even necessitate a high-speed connection. Major portals like MSN and some traditional broadcasters and content owners are making efforts to provide more audio and video entertainment on-line, and how last mile broadband pipe managers like Comcast are enabling their own portals with more value-added content (aggregating news and entertainment video clips to start). Slow, but it’s happening.

Interesting data point: AsiaMedia reports that in Korea, the government is concerned about how to ensure that all their citizens have access to the Internet, with a goal of “every household to be equipped with universal access to the broadband Internet, irrespective of income, age or region. Every citizen will be able to enjoy a culturally enriched life as a result of high-quality digital content delivered by digital television and the Internet.”

The Korean government acknowledged that the move to get the population on to the Internet is a major priority, making it easier for the government to be more transparent and accessible, as well as supporting and enhancing quality of life. Of course, as the article points out, the Koreans have to balance that effort while being careful not to alienate “have-nots” or contribute to a cultural lethargy and an increasingly “inactive population that sits for hours in front of a computer screen.”

As Bill Gates said, we want to see broadband adoption grow faster than it is today. He noted that “the majority of people will be connecting through broadband and interacting with information through many devices: PCs at work and at home, portable PCs, Tablet PCs, and pocket devices such as the phone, evolving from simply a voice device to a data device.” Echoing his CES keynote, it’s especially important for broadband access to improve and increase, across adoption, downstream data rates with our cross-device approaches (through Live services). In short, if you want all of your data and information from the cloud to be available at any time, from any device, broadband has to really be fast and ubiquitous. 

And increasingly wireless.

For another look at some of the governmental challenges, read the AEI-Brookings paper on state and federal policy, “Broadband Penetration: An Empirical Analysis,” by Scott Wallsten. In it, the author takes a critical look at governmental policies, some that may not help boost broadband penetration but may even slow it in the US.

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