Why Are Internet Connection Speeds In The United States Slower Than Those In Many Other Developed Countries

Running Head: UNITED STATES INTERNET CONNECTION SPEEDS 1

Why are internet connection speeds in the United States slower than those in many other

developed countries?

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Institution

UNITED STATES INTERNET CONNECTION SPEEDS 2

Why are internet connection speeds in the United States slower than those in many other

developed countries?

Despite the United States being among the pioneers of the internet in the world, the

country’s internet remains expensive and slows (Fil & Ryan, 2014). According to a report

published by one of the major content providers Akamai, the United States service is getting

slower as compared to other countries (Fil & Ryan, 2014). Countries such as South Korea, Hong

Kong, Japan, Switzerland, Latvia, Sweden and the Czech Republic are now ahead of the United

States in terms of internet connection speeds (Pick et al., 2015). The Akamai ranking placed the

United States at position eight having at least faster average connection speeds as compared to

Sweden. However, what remains a mystery is the reason why the internet connection speeds in

the United States are slow despite the country having elaborate technological infrastructure that

could provide faster and cheap internet. Therefore, the paper herein looks at the specific reasons

why the United States internet connection is still low and relatively expensive as compared to

other developed countries.

UNITED STATES INTERNET CONNECTION SPEEDS 3

Fig. 1 United States Ranking among the OECD Nations (Correa, 2007).

According to Nevo et al. (2016), the slow internet connection speeds in the United States

has nothing to do with technology. The connection problem is mainly associated with economic

policies that control the broadband industry (LaRose et al., 2014). The lack of competition in the

broadband sector can also be linked to the slow connection as it has created a situation of

monopoly in the industry where the players are reluctant to improve their services to meet the

new customer wants (LaRose et al., 2014). The United States communication and broadband

industry have few players which range from one to two providers and hence they set their prices

using the duopoly or monopoly pricing methods.

The few numbers of internet providers in the United States leaves the consumers with an

option to choose only from the few players. For instance, to get a slightly high-speed internet

connection of about 25 Megabits per second (Mbps), consumers only have a few options to

choose which include Comcast, Time Warner or Verizon (LaRose et al., 2014).

The broadband companies operating in the United States internet connection market have

been operating for many years without proper regulation which has promoted monopolistic

practices among the firms and hence stagnating the growth of the industry as Papai et al. (2017)

notes. Other countries such as Japan and South Korea have formulated policies to promote

competition by forcing the companies operating internet connection pipes to rent out sections of

their pipes to rival firms as a way of promoting competition. Creating room for healthy

competition among the players in the industry has helped to promote good performance in the

sector. The classification of the high-speed Internet access as an information service by the

Federal Communications Commission in the year 2002 can also be associated with the slow

UNITED STATES INTERNET CONNECTION SPEEDS 4

growth that has been witnessed in the industry over the years. An information service is an

unregulated sector and hence the players in the sector have the opportunity to operate according

to their policies.

A weak government oversight on the telecommunication industry is also pointed out as a

major challenge in reducing the development of internet connection in the country (Aravantinos

& Varoutas, 2017). The amount that Americans pay for certain speeds of the internet is about ten

times the amount paid by Japanese for the same speed. The Federal government has not been

active in controlling the industry and this can be seen from the exorbitant costs of internet

charged by the major players in the United States broadband industry. The government has

abandoned the industry to the companies operating in the sector to control the prices and to

control the operational standards leaving the consumers to bear the high cost of internet and slow

speeds (Aravantinos & Varoutas, 2017). Unlike the US, other countries such as Sweden and

Japan subsidize internet connection hence allowing the consumers to have access to high-speed

internet at relatively low prices.

Another important argument that can be associated with the slow internet connection in

the United States is the low population density of the country (Freimann & Putnam, 2017).

America’s low population density can be used as a justification for slower internet and

broadband penetration in the country. It is much costly to distribute internet to a widely

distributed population than a densely populated area (Freimann & Putnam, 2017). Deploying

broadband infrastructure in highly populated urban areas is much less costly than distributing the

same infrastructure to the less populated rural areas. However, the argument has been objected

by many experts in the area who maintain that most of the Americans do not live in rural areas

and hence the overall US population density cannot be used as an accurate explanation for the

UNITED STATES INTERNET CONNECTION SPEEDS 5

slow internet speeds (Freimann & Putnam, 2017). The point of view has also been opposed by

other experts who argue that there is no valid correlation between the population density of a

country and its broadband penetration. The latter is to say that it is not necessarily that countries

with high population densities have a high internet and broadband penetration. Therefore, the

low population density cannot be used to explain lagging America’s broadband penetration. The

following table shows the different measures and broadband penetration ranks.

Fig. Measures and Ranks (Correa, 2007)

Another point of view in explaining the low internet connection speeds in the United

States points at the OECD’s measurement of broadband penetration. The OECD’s ranking on the

per capita basis claims that the United States is ahead on the absolute basics. The argument

maintains that the only way the broadband penetration can be measured is by accounting for the

size of the country (LaRose et al., 2014). Therefore, the penetration of broadband should be done

based on the household basis which in that case, America is doing great as compared to other

countries. The table below compares the ranking per capita and per household.

UNITED STATES INTERNET CONNECTION SPEEDS 6

Fig. Broadband Penetration Ranking Per Capita and Per Household (Correa, 2007)

The high internet speeds recorded by most of the European countries can be associated

with their reliance on the DSL which is enabled by the shorter local loop lengths. European

countries have shorter loop lengths which allow for faster speeds as compared to the copper

wires. The shorter loop lengths, for instance, have given TeliaSonera of Sweden an opportunity

to supply download speeds of up to 24 Mbps through its DSL network (Freimann & Putnam,

2017). The European governments are also committed to promoting competition in the cable

industry by unbundling the local network loop. However, the United States is developing its fibre

cable at a faster rate which may help it increase the speed of internet connection in the near

future. The fibre connection is likely to push the United States in the broadband penetration

ladder in the coming years passing most of the European countries which are still dependant on

the DSL networks.

The United States is one of the highly developed countries in as far technology is

concerned but still records low internet speeds as compared to other developed nations. The slow

internet connection speeds can be associated with a number of factors such as technology, lack of

UNITED STATES INTERNET CONNECTION SPEEDS 7

regulations, monopoly and duopoly. The factors affect how the broadband industry operates

which has a direct effect on the speeds and cost of internet in the country.

UNITED STATES INTERNET CONNECTION SPEEDS 8

References

Aravantinos, E., & Varoutas, D. (2017, November). A revisit of fixed and mobile broadband

diffusion in OECD: A new classification. In Internet of Things Business Models, Users,

and Networks, 2017 (pp. 1-8). IEEE.

Fil, T., & Ryan, C. (2014). Computer and internet use in the united states, 2013. US Department

of Commerce, Economics and Statistics Administration, US Census Bureau.

Freimann, M., & Putnam, J. (2017). USA: Broadband Access and Adoption in New York State.

In Digital Government (pp. 105-128). Springer, Cham.

LaRose, R., Bauer, J. M., DeMaagd, K., Chew, H. E., Ma, W., & Jung, Y. (2014). Public

broadband investment priorities in the United States: an analysis of the broadband

technology opportunities program. Government Information Quarterly, 31(1), 53-64.

Nevo, A., Turner, J. L., & Williams, J. W. (2016). Usage‐Based Pricing and Demand for

Residential Broadband. Econometrica, 84(2), 411-443.

Papai, Z., Nagy, P., & Papp, B. (2017). Does the number or the composition of players matter on

the mobile broadband markets?-Lessons from a benchmarking study of the largescreen

mobile broadband prices in the European Union.

Pick, J. B., Sarkar, A., & Johnson, J. (2015). United States digital divide: State level analysis of

spatial clustering and multivariate determinants of ICT utilization. Socio-Economic

Planning Sciences, 49, 16-32.

Correa, D. (2007). Assessing Broadband in America: OECD and ITIF Broadband Rankings.

Washington, DC: The Information Technology and Innovation Foundation, pp.1-10.

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