It has been commonplace for decades to hear it said that the United States is not in the top 10 globally for internet access speed or some other metric. Over the last few decades, it has been argued that the United States similarly was not “in the top 10 globally” for use of text messaging or mobile phones, for example.
Most recently, it had been argued that the U.S. was falling behind in 5G.
It has been argued that the United States was behind, or falling behind, for use of smartphones, broadband coverage, fiber to home, broadband speed or broadband price, for example. Likewise, some argued that U.S. customers were “behind” Japan or South Korea on some metrics related to use of digital apps.
And U.S. average mobile speeds were slow, historically, compared to other developed nations.
So the “U.S. is behind” storyline is quite familiar. Of course, we might note that the same thing was said about U.S. fixed network telephone service. The U.S. installed base metrics rarely exceeded 12th to 15th globally.
Some even have argued the United States was falling behind in spectrum auctions. That clearly also has proven wrong. What such observations often miss is a highly dynamic environment, where apparently lagging U.S. metrics quickly are closed.
To be sure, adoption rates have sometimes lagged other regions, early on. But there is a pattern here: early slowness is overcome; performance metrics eventually climb; availability, price and performance gaps are closed over time.
The early storylines often are correct, as far as they go. That U.S. internet access is slow and expensive, or that internet service providers have not managed to make gigabit speeds available on a widespread basis, can be correct for a time. Those storylines rarely--if ever--hold up long term. U.S. gigabit coverage now is about 80 percent, for example.
Other statements, such as the claim that U.S. internet access prices or mobile prices are high, are not made in context, or qualified and adjusted for currency, local prices and incomes or other relevant inputs, including the comparison methodology itself.
Both U.S. fixed network internet prices and U.S. mobile costs have dropped since 2000, for example.
What observers always forget is the huge amount of the U.S. land surface that is highly rural or unsettled. About 94 percent is unsettled or lightly populated, including mountains, rangeland, cropland and forests.
In fact, most people live on just six percent of the U.S. land surface, according to the USDA. Also, the United States, like Canada, Australia, Russia and China, are continent-sized areas. Building networks takes longer when larger areas must be covered.
All that has direct implications for the cost and speed of building networks. Dense urban networks cost the least, on a per-location basis, while rural networks cost the most. Also, incentives to build and operate networks are strongest on six percent of the land surface, and challenging on as much as 94 percent of the land surface.
The point is that the United States rarely--if ever--ranks in the top 10 on any indicia of communications performance. In fact, it is more realistic to argue that U.S. will rank 19th to 20th on almost any measure of teledensity or communications supply.
A corollary is that rankings do not matter. Nobody would allege that a “not in the top 10” ranking has any apparently negative impact on productivity, innovation or economic growth. The claimed U.S. applications usage gap has not mattered for U.S. based application firms.
There is always “some other place” where customers and users do more with a particular application or use case. It never seems to matter, ultimately. Teledensity and other measures of connectivity supply are inputs. What matters is output, the ability to create value from the use of such assets.
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