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U.S. Falls Behind China in Broadband, Light-Touch Regulation Blamed for the Decline

Recent reports indicate that China has now surpassed the U.S. and is becoming the number one broadband country in the world. According to data analysis by market research firm Point Topic, both the U.S. and China had about 78 million broadband lines at the end of August; however China is growing twice as fast.

Point Topic says that when broadband use initially surged in China, some experts predicted the country would overtake the U.S. in 2006. However the U.S. speeded up in the number of broadband lines and growth in China leveled off. For 18 months the two countries were more or less even with similar numbers of lines added in each quarter until the first quarter of this year.

"It's not so surprising that the US has been overtaken in absolute numbers — after all, China has more than three times as many homes and people," says Oliver Johnson, Chief Executive of Point Topic. "But the US has also fallen behind the leading European and Asian countries in percentage take-up of broadband."

Point Topic believes current trends could have serious repercussions for the competitiveness of the U.S. economy in a high-tech world: "The big debate in America today is focused on the immediate economic crisis but the presidential candidates need to take some time to discuss the longer-term issues. Light-touch regulation is part of the problem with broadband as well as on Wall Street. It has allowed the incumbent operators to keep the broadband market largely to themselves, leading to higher prices and slower growth. In many countries where there is more open competition the broadband market has leapt ahead — not just in China."

Related topics: Broadband, Policy & Regulation, Telecom

 
   

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