A better way to measure broadband penetration; but...

Stuart Corner
Monday, 05 May 2008 02:27

IT Industry - Market

The OECD is often criticised for the way it attempts to compare broadband penetration and usage in member countries. The Information Technology And Innovation Foundation (ITIF) has attempted a more meaningful comparison but it omits one very important parameter.
The ITIF (a US think tank) has ranked broadband in 30 countries  by a composite measure based on three indicators: household broadband penetration, average speed weighted by percentage of subscribership (Mbps), and lowest available price per Mbps.

Australia has not come out too badly: we are ranked 12th overall ahead of the USA, UK Germany. That compares with a ranking of 16th overall position on the most recent OECD ranking (June 2007) based simply on broadband services per head of population.

But can you spot the vital parameter missing from the ITIF ranking: Cost of gigabyte of data per month? It's nowhere to be seen simply because most countries don't charge that way or if they do it's not a significant factor in the cost of the service.

ITIF figures are based on the OECD penetration and pricing data for June 2007 but the ITIF elected not to use the OECD data on average speed and price data because, it says "these data are not weighted by subscribership or availability. Also, the OECD measures penetration on a per capita basis because comprehensive data on household penetration is generally unavailable. ITIF has used average household size as a multiplier to convert OECD per capita penetration data to household penetration data. But it adds the caveat: "one problem with this method is that the OECD data likely also includes some DSL business subscribers."

The rankings have been produced in support of a new ITIF study "Explaining International Broadband Leadership." In it the ITIF attempts to identify factors that have spurred broadband performance in nations other than the USA and to "present key findings that government and the technology industry must recognize if we are to find the right course for the United States." It also makes "key policy recommendations that will drive greater broadband performance."