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<i>The Fine Print</i> Misses the Mark

Author David Cay Johnston won a Pulitzer Prize in 2001 for his reporting on U.S. tax policy. But in his just released book,Johnston falls woefully short of that standard in his attempt to critique the state of broadband in the U.S.
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Author David Cay Johnston won a Pulitzer Prize in 2001 for his reporting on U.S. tax policy, an award that is described as recognizing a "distinguished example of beat reporting characterized by sustained and knowledgeable coverage of a particular subject or activity."

But in his just released book, The Fine Print, Johnston falls woefully short of that standard in his attempt to critique the state of broadband in the U.S. In fact, The Fine Print, displays a surprisingly fundamental misunderstanding of telecommunications history and little to no sourcing for what is offered as "fact."

The brief chapters depicting how the U.S. built and financed our national telephone network cobble together inconsistencies and misinformation to support a pre-determined and flawed conclusion -- that broadband in our country is inferior, that broadband providers only serve richer markets and that government-owned or heavily subsidized networks would produce better results. These arguments are wrong and belied by readily available facts.

An objective review of public data shows that broadband in the U.S. is a success and only getting better.

Today, cable's broadband service is available to 93 percent of Americans in all types of communities, urban and rural, suburban and exurban. Advanced broadband networks offering speeds of 100 Mbps are now available to 80 percent of U.S. homes, up from only 20 percent three years ago. In the words of FCC Chairman Genachowski, the U.S. is "near the top of the world in deployment of high-speed broadband infrastructure."

While Johnston suggests that other countries are doing better than us, these comparisons are an irrelevant exercise in bragging rights. Who has the fastest broadband pipe is not a useful measure of how well a country is doing in the Internet economy. The United States has prospered more than any other nation from broadband, harvesting the Internet opportunity to change how we are learning, conducting business, connecting with friends and consuming media.

The U.S. has more broadband subscribers than any country other than China. Americans rank at the top in their use of the web, and numerous studies validate that the U.S. is a global innovation powerhouse. The leading Internet and e-commerce companies are located here.

Countries like Lithuania, Bulgaria and France that Johnston admires, are not models for America. The United States is a massive country of 3.7 million square miles and 314 million people. According to the recent Census, 95 percent of U.S. land mass is rural and 19 percent of the population lives in these rural areas. Digging trenches and climbing poles to reach every last American is the goal, but those challenges are bigger than those facing countries that are barely the size of New York or New Jersey.

In addition to getting quality broadband deployed, consumer value is strong. Prices for broadband have fallen 87 percent since 1999 on a megabit per second basis. The nation's largest broadband provider (Comcast) just increased speeds for its customers without an increase in prices; from 30Mbps to 50Mbps, and 50Mbps to 100Mbps. And a 2010 survey by the FCC found that 91 percent of Americans were satisfied with their broadband service. Whatever the view of pundits, Americans seem relatively pleased.

Regrettably, Mr. Johnston's efforts to manufacture a crisis where none exists seem driven largely by the need to convince his reader of what, in his view, serves as an alternative solution -- government-owned and operated broadband networks. In his book Johnson writes, "Municipal systems generally use newer and faster technology than commercial cable companies offer, in some case allowing cities to attract large digital businesses with big payrolls."

But the record on that case is very weak. While Johnson cites the example of the government-owned network in Glasgow, KY, a quick look at that website shows their best offering to be 6Mbps for $36 per month. Is that the utopian model into which local governments should invest millions of taxpayer dollars?

Or take Chattanooga, TN, where the public has spent hundreds of millions of dollars to build a fiber network that offers 1 gigabit speeds for $300 per month. According to The Economist magazine, only 9 residents and 2 businesses had subscribed to the service as of August. The rate of return on that investment would drive any private company out of business and certainly isn't a sustainable model for our country.

In one final irony, Mr. Johnson's quotes Adam Smith in support of his arguments against corporate greed but seems to forget Smith's more memorable observation that the private market, even where participants are pursuing personal gain, is more likely to produce a better outcome for society ("led by an invisible hand") than if state central planners were to attempt to do so directly.

That has certainly been the case with broadband in America.