US Broadband and International Competitiveness

The birthplace of the internet no longer boasts the best online infrastructure and, according to two recent studies, that fact is partially to blame for America’s slide in global competitiveness rankings.  The “Global Competitiveness Report 2010-2011” released in September by the World Economic Forum ranked the United States infrastructure, including online infrastructure, 23rd, contributing significantly to its drop from 2nd to 4th place.  A February McKinsey Global Institute study entitled Growth and renewal in the United States: Retooling America’s economic engine” likewise highlighted the need to develop a “21st century infrastructure” capable of handling the demand for information in a system that currently loses $450 billion in consumer purchasing power due to subpar internet connections.

The Obama administration has openly called to rectify these shortcomings by investing in the country’s broadband network, with the hope of extending high-speed access to 98% of Americans.  In a recent Washington D.C. forum on the economy, the Chairman of the FCC Julius Genachowski pointed out that “the costs of digital exclusion are rising,” and hoped that the federal government could aid the expansion of broadband in the same way it subsidized telephone access in rural parts of the country for earlier generations. Genachowski called his efforts the “blood and guts issues” of building an infrastructure base that supports economic growth.

Critics, however, question whether the administration’s wireless broadband plan is best for speeding up the country’s internet connections, and suggest that fiber networks are faster and more conducive to economic success.  Despite worries about its cost and effectiveness, skeptics such as Dan Mitchell, a vice president for the rural provider National Telecommunications Cooperative Association, still agreed that “broadly, they’re stating the right things, but the devil is always in the details.”

Posted by: John Coit

Sources: New York Times, McKinsey Global Institute, InternetNews.com, World Economic Forum, Business week, WhiteHouse.gov

Photo Credit: Something Yellow by Flickr user jakepjohnson

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