Should Broadband Networks be 'Common Property?' A Comparative Analysis of Broadband Network Policy Between the U.S. and Japan

Abstract

"Broadband network infrastructure provides a high-capacity communication medium that is suitable for a wide range of communications applications. In the coming decades, broadband networks will play a key role in gaining a competitive advantage. The purpose of this paper is to examine the role of government in the process of network deployment.

"In facilitating wide network deployment, policymakers should consider various factors including technology, market demand, and industrial structure. In this paper, we conducted a comparative analysis of U.S. and Japanese broadband network policies. Policy-making processes of the two countries are contrasted. While the U.S. policy-making process is decentralized, the Japanese counterpart has a centralized structure. This is especially true in the telecommunications policies where the contrast can be clearly observed. We examined this issue from the political, historical, legal, technological, and economic aspects.

"There are various technological options of broadband network infrastructure including digital subscriber line (DSL), cable modem, wireless, and fiber optics. Each has different capacity and different cost structure, respectively. In U.S., upgrading existing cable line makes more sense than in Japan because of the high penetration of the cable service. It is reasonable to say that cable modem is a feasible option as a broadband network infrastructure in U.S. But, in contrast, it seems unfeasible in Japan, which has relatively low penetration rate of cable service.

"The first part of this paper provides today's context in which the broadband network becomes an increasingly important source of economic development. Next, we discuss the nature of broadband network infrastructure and its policy implications. Once a broadband network is widely deployed, dynamic interaction between users and providers accelerates innovation. The major candidates for broadband network infrastructures, including digital subscriber line (DSL), cable modem, and fiber optics, are reviewed and discussed in terms of their capacity, availability, and the cost structure. Third, we present a comparative analysis of U.S. and Japanese broadband network policies.

"In conclusion, we argue that close partnership between public and private sectors is key to success. While the proliferation of the services and applications require competitive environment, the deployment of the infrastructure may or may not. There are certain costs of network development through competition such as duplication of investment, and cost of establishing interoperability between networks. Thus, the broadband network infrastructure should be treated as a common property to a certain degree. From this point of view, we conclude that the Japanese broadband policy model in which government plays a role as an active coordinator is superior to the U.S. model."