USIIAs David McClure Sets Record Straight on Broadband

By Tim McElligott

It’s unclear if any in the audience at Martin Group’s 2009 User Meeting and Technology Conference Tuesday – mostly service providers – were taking advantage of the liberal gun laws in Texas, but if they were, it is a surprise David McClure, president and CEO of the U.S. Internet Industry Association, didn’t pay the ultimate price when he chided them in the first minute of his keynote address for being too greedy and obsessed with profits to care about improving the country’s lowly standing around the globe in broadband penetration.

Good thing too, because he quickly dispelled that myth and castigated the people who perpetrate it.

McClure said the research that leads to reports of the U.S, ranking so low globally in broadband deployment is worthless and that U.S. service providers are victim of the Broadband Adoption Paradox.

“Most studies that rank us lower than Iceland and Sweden claim to measure broadband deployment, but they are actually measuring broadband adoption and that’s a whole different issue,” McClure said.

He said the data is based on the Organization for Economic Cooperation and Development (OECD) studies and that these studies are rigged. “They aren’t even close to reality,” he said.

He says the numbers supplied by many countries is nothing more than guesswork. Pointing fingers at service providers for slow or targeted deployment is just plain wrong. “If [they] deployed broadband to every single person in the country, it is estimated we would drop from 15th place to 20th,” he said.

McClure said both PEW Research and PricewaterhouseCoopers came to the same conclusion: The more broadband we deploy, the smaller the percentage of people buy it.

The problem is, some people just have neither the need nor desire for broadband, he said. And that’s an education problem, not a deployment problem.

In fact, he said, U.S. service providers are responsible for the fastest deployment of new technology in the history of mankind, taking broadband from zero to 63 percent adoption in less than a decade, Sixty-three percent, he said, is the magic marketing point where technology stops being for geeks and early adopters and goes mainstream.

“The other third doesn’t go online because they are not interested,” McClure said.

The problem with adoption is not the rate of deployment, but that the Internet is not relevant to these people. “If anything,” he said, “we have failed to do an appropriate job in education to drive acceptance and adoption.”

McClure said the FCC is designing broadband policy based on strategies written in the 1800s designed for the railroads, which called for more infrastructure. That, and policy that focuses on open access and net neutrality is “barking up the wrong tree,” he said.

McClure also cautioned service providers about accepting stimulus dollars to build out Internet infrastructure, because that money doesn’t come without consequences. “If you use federal dollars, you have to swallow their insane regulatory schemes as well,” he said.

Targeted investments are needed in areas that are un-served, but the operative word here is “targeted,” he said.

He said having the government throw $7.2 billion at the problem is probably a good idea, but that AT&T and Verizon will spend twice that much expanding the reach of broadband.

Echoing his organization’s reply comments to the FCC on broadband policy – along with NetLiteracy – which read: “Though there remain a need for better data regarding the nation’s broadband infrastructure and targeted programs to build out and enhance that infrastructure, the larger and more critical issue is how to spur the adoption of broadband among the one-third of Americans who currently do not or will not utilize it,” McClure said. “What’s needed,” McClure said, “is better literacy programs.”

“If you can’t read, broadband is useless to you,” McClure said. But he didn’t mean simple the ability to read, but also computer literacy. “I’ve seen not one course on how to use the Internet efficiently.”

He also said we need to get computers into the hands of those who can’t afford them and encouraged service providers to get involved at the company level and at the personal level. “The tragedy is, we take perfectly good computers to landfills every day because we don’t know what to do with them,” he said, calling for people to lobby for computer re-tasking. It can be done by student volunteers.

“You’re leaving one-third of your customers sitting there.” McClure said. “The only way to fight for customers who are already there is to cut prices and bleed your profitability, or, go after the one-third of Americans you haven’t gone after yet.”

Besides, he said, it’s the right thing to do.

And that’s something politicians in Washington, D.C. can’t seem to figure out how to do. “I’ve never seen it so polarized and gridlocked,” he said. “The furthest elements of both parties have large voices and moderates are in retreat.” Therefore, he said, there are concerted forces among those who would see your profitability wither away, catering to the 2 percent of high-end users.”

Instead, he said, after 15 years into commercial Internet, it is about time someone at the FCC sat down and decided to think about how to manage it this network.