U.S. vs. Japan: Residential Internet Service Provision Pricing

Washington, DC - Today, the New America Foundation's Open Technology Initiative released a report comparing residential high-speed Internet pricing in the United States and Japan.  With broadband stimulus funding applications due soon and discussion over the creation of a national broadband policy heating up, this report sets a baseline for comparing the current state of Internet service provision. 

The Open Technology Initiative compares residential cable, DSL and Fiber-optic Internet pricing from major Internet providers in the U.S. and Japan, primary sourcing all information gleaned from each provider's website.  The report reveals that the U.S. has less competition in the high-speed Internet access market, particularly fiber-optic Internet.  Verizon is currently the only national-level fiber-optic Internet provider and offers only three main options of service.  In the U.S., the price for the fastest download stream (50Mbps) is $145.  In Japan, consumers have far more choices for fiber-optic providers and many more tiers of service to choose from, resulting in Internet download speeds of 100Mbps-1Gbps at a cost of $40 to $67 per month.

"These analyses demonstrate that consumers in the United States are being directly harmed by the lack of competition among service providers," stated Sascha Meinrath, director of NAF's Open Technology Initiative.  "Exorbitant pricing tiers and slower speeds are indicators of profound market failure - physics doesn't work better in Japan, the business models do.  Our policy-makers need to identify the regulatory and economic factors that have lead to a vibrant and successful residential broadband market in Japan and implement these good ideas here in the U.S."

"Our analyses underscore that U.S. Internet services are falling behind other technologically advanced countries. The U.S. should recognize this market failure and refocus on broadband Internet infrastructure as the foundation for ensuring its leadership in telecommunications," stated Chiehyu Li, research fellow at the Open Technology Initiative and the report's author. As the discrepancies this analysis uncovers make clear, it is time for the U.S. to take immediate action to ensure that affordable, high-capacity broadband is deployed.  The low pricing of Internet service and the diverse Internet market in Japan can be attributed to competition among numerous providers and products. If policy-makers make the changes necessary to foster meaningful competition, the U.S. will be able to catch up to countries like Japan and once again lead the world in advanced telecommunications.

The report, U.S. vs. Japan: Residential Internet Service Provision Pricing, can be found online here.

About the Open Technology Initiative
New America Foundation's Open Technology Initiative formulates policy and regulatory reforms to support open architectures and open source innovations and facilitates the development and implementation of open technologies and communications networks. For more information, visit, http://www.newamerica.net/programs/oti.

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Contacts:

Sascha Meinrath
Director, Open Technology Initiative
meinrath@newamerica.net
(202) 986 - 2700

Please contact Kate Brown with media requests at 202-596-3365 or brown@newamerica.net.

About the New America Foundation
The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.

Learn More About: Chiehyu Li, Sascha Meinrath
Related Programs: Open Technology Initiative , White Spaces, Wireless Future Program
Topics: Telecom & Technology