NAF’s Cost of Connectivity Report fails a fact check

[Commentary] Collecting data on international broadband prices is more difficult than it seems. Different countries offer different combinations of services and varying terms, all of which typically are described in languages other than English. The resulting challenges appear to have been too much for the authors of the new New America Foundation report on the cost of connectivity to overcome.

At the very least, the data reported for Copenhagen, where I live, factually incorrect. The NAF report lists Copenhagen as one of 22 cities deemed “speed leaders,” offering the best bang for the wired buck, the best bang for the mobile buck, and ranking #1 in the world for the lowest cost of 2GB of data. If the goal of the NAF report is to encourage policy makers to promote competition, don’t look at Denmark as a guide. Some 68% of Danes get their broadband from the incumbent provider TDC or one of its daughter companies. Americans would call that a monopoly. No single American carrier has a market share as high as TDC. Here is the fallacy of European competition: incumbents have to lease their infrastructure at low wholesale rates. Plenty of virtual providers take advantage of this bonanza, but over time, this model is so unprofitable for the incumbent that it does not invest in further infrastructure. Conspicuously absent from this report is OECD data. The OECD is the most comprehensive and authoritative source of broadband data, and it gives a different view of American broadband prices. The OECD’s 2011 report showed that the US ranged between $1.10-71.49 for advertised price for megabit per second, but that number has fallen to $0.53-$41.70 in the 2013 report. This shows a 51% improvement at the low end and a 41% improvement at the high end. Some countries have lower prices, but the decline of the price for the US shows that things are getting better, not worse, for broadband. Furthermore rather than the makeshift bundle comparisons offered by NAF, looking at the same apples-to-apples units across countries, such as megabits per second, is a more fair measure.