16 Sep 2011USA Broadband Overview

The USA is a world leader in broadband services, with more than 83 million subscribers at mid 2010. However, while the USA is second only to China in terms of broadband subscribers, its fixed population penetration, at 28.3 per cent (mid 2010), was less than that in Germany, France and South Korea. It has been argued that the USA has many rural areas where the revenue to be made by laying down fibre has not proven alluring to providers. Additionally, US broadband providers often charge above the global average for their services and in some cases, more than those in many developed nations.

The Telecommunications Act of 1996, whose aim was to introduce more competition into the local telecommunications sector, has been so effectively fought by the dominant telcos that the Act’s unbundling provisions were rendered largely ineffective. In addition, the US regulator ruled that the extensive fibre networks deployed nationally will not be subject to mandatory access provisions. It also sanctioned several mega-mergers leading to the most concentrated US telcos market since incumbent operator AT&T was broken up in 1984. The ability of major telephone and cable operators to dominate their markets without sharing their lines has kept out new competition, enabling the companies to keep prices high and investments in faster technologies low.

One of the major problems until recently has been the lack of a detailed national broadband policy that actively encourages competition among national providers. This contributed not only to the USA falling behind other advanced countries, but also to a digital divide within the USA itself. However, in early 2009 the Obama Administration pledged its support for universal broadband, passing an economic stimulus package providing grants totalling USD 7.2 billion for the construction of national broadband infrastructure. In March 2010, the regulator presented the country’s first National Broadband Plan, setting the USA on a new telecoms path which is very pro-consumer, pro-privacy and pro-competition. There are also significant changes proposed to access regimes, wholesale facilities and competition in both the telco and broadcasting markets.

In addition to the government’s stimulus package and National broadband Plan, the broadband market is also witnessing some significant investments in FTTH deployments, DOCSIS 3.0 upgrades, WiMAX and LTE. With the first commercial LTE deployments having taken place in late 2010 and early 2011, and the FCC working on identifying and making available 500MHz of spectrum for expanded wireless broadband use, the mobile broadband market in particular is expected to experience strong growth.