Strategy Analytics: Inclusion of broadband in stimulus package 'a positive sign'

Feb. 4, 2009

FEBRUARY 4, 2009 -- The inclusion of broadband deployment in the stimulus bill currently making its way through Congress is a positive sign, say Strategy Analytics analysts, who claim South Korea's recent announcement that it will deliver 1-Gbps service to the home by 2013 underscores the need for the U.S. to take immediate action.

FEBRUARY 4, 2009 -- The inclusion of broadband deployment in the stimulus bill currently making its way through Congress is a positive sign, according to analyst firm Strategy Analytics (search for Strategy Analytics). The firm, which late last year published a report on the topic, "Sputnik moment: The call for a national broadband policy," says it is pleased to see progress being made.

Current versions of the bill in Congress earmark between $6 billion and $9 billion for broadband deployment, largely for the expansion of high-speed Internet to rural and underserved areas. Some sources suggest that the stimulative effect of the spending could translate into 500,000 new jobs. This renewed emphasis on broadband deployment is an important step forward for the United States, which, in the opinion of Strategy Analytics, has lost its broadband foothold.

"America's broadband policy over the past eight years has been characterized by nebulous goals and inaction--the country now finds itself trailing the developed world in virtually all aspects of broadband," reports Ben Piper, analyst and director of the Strategy Analytics Multiplay Market Dynamics Service. The report cites statistics placing the United States behind its European and Asian counterparts in the "metrics that matter," including speed, availability, penetration, and price, he says.

South Korea, widely viewed as the leader in residential broadband deployment, recently unveiled plans to build out a fiber-optic infrastructure capable of delivering 1-Gbps service to the home by 2013.

In addition, the report identifies parallels between current broadband deployment efforts and rural electrification policy under Franklin Delano Roosevelt's 'New Deal' in the 1930s. The passage of the Rural Electrification Act (REA) in 1936 is largely credited with getting rural America 'on the grid.' Both policies hinge on the belief that increased access translates into improved competitiveness, notes Piper.

"We are pleased to see the U.S. finally taking broadband deployment seriously," he contends. "South Korea's recent announcement further underscores the need for quick and decisive action."

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