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I particularly note his remarks at 2:22, when he said:

Every single person here has a blog or a website or has content that has distribution and has enabled consumers, millions of them around this country, to [access] that content and no one is blocking it… We want as much content, we want as many applications to succeed as possible. That’s what makes our broadband service attractive to consumers. And if we ever engaged in conduct that consumers were outraged about, they do have a choice. They can go somewhere else.

He said that while we can have a discussion on what is the most appropriate method of network management, “…there is zero evidence that any operator is engaging in anticompetitive conduct.”

However, despite the paucity of evidence of such behavior, Professor Lawrence Lessig, a big proponent of net neutrality, said that some might argue that we should wait until we see discrimination before we do something about it – which strikes me as a sensible approach to legislation – but that hi-tech investments are made today based on what investors think the network will look like in the future. He says there is such extraordinary uncertainty about what the future holds that it threatens innovation. Threats about what might happen without net neutrality have been around for five years, back to Columbia Law Professor Tim Wu‘s 2003 paper Network Neutrality, Broadband Discrimination. I wouldn’t say that investors are shying away from promising broadband applications.

There was also a great deal of talk about what one person referred to as the United States’ “precipitous freefall” in terms of our global broadband ranking. I refer you back to our series on the problems with the OECD rankings, especially this post: The Truth About Japanese Broadband.

Today, we’re looking at a the basic unit of measurement in their study – subscriptions per 100 inhabitants.  To understand this issue, you have to begin with a simple question.

What happens when everyone reaches 100%?

All metrics should be equal.  No matter how you count it, when every nation reaches 100% broadband adoption, we’re all tied for first, right?  Actually, no.  This is an odd little side effect of the OECD’s reliance on “subscriptions per 100 inhabitants”.

If every country achieved 100% broadband access, there would still be clear winners and losers.  The OECD rankings would still produce disparate rankings because of the impact of calculating results this way.  In fact, a Phoenix Center study examined this specific problem.  By applying the ranking methodology to what it calls “Broadband Nirvana”, the study found that the United States would actually rank 20th – 5 places lower than where we are today – if every household and every business in every country had a connection.

By measuring total (primarily household) subscriptions per units of 100 inhabitants, the OECD fails to account for disparities in average household sizes throughout the world.  Those countries with fewer average residents per household (many of the northern European countries at the top of the OECD listing) will rank higher in the OECD statistics, yet the irony is that there are fewer residents in each of these homes who are able to take advantage of the HSI service.

Think of it this way.  If average household size is Denmark is 2.1 people, and you measure subscriptions per 100 inhabitants, you would have 48 subscriptions per 100 inhabitants.  One hundred subscriptions would cover 210 people.  In the US average household size is roughly 2.6 persons per household.  100 subscriptions cover 260 people.  However, based on the OECD methodology, you have only 38 subscriptions per 100 people.  The US ranking is much lower despite having roughly 20% more people with access. 

Because of that skew, the US, with more people accessing broadband through the same number of subscriptions, actually fares worse in the OECD outcome.  It’s a serious flaw.

That’s not to say that a serious discussion about ways to increase broadband adoption shouldn’t take place.  Tomorrow, we’ll take a look at Japanese broadband. Our final installment in this series will focus on some of the reasons people don’t adopt broadband and efforts to change that.