August 28, 2004

Korea's Broadband Miracle

Thomas Hazlett summarizes the path our politicians must take, to support economical high speed (not the slow products we have now) broadband adoption. There is no greater economic issue for Wisconsin than this:

In the mid-1990s, Korean policy-makers set out to inject competition into local telephone service. They enacted rules allowing rivals to challenge the erstwhile state monopoly, Korea Telecom. Yet, by mid-2004, KT still accounted for 95% of local phone lines.

A failure? On the contrary, Korea's policy has proved a smashing success. Because, as an additional lure to attract phone entrants, the government ended regulation of advanced telecom applications. The result: While competitors largely avoided (regulated) voice services, they invested billions to create new (unregulated) high-speed Internet networks. The broadband technologies unleashed by telecom rivals forced KT to modernize its network, which now serves just half of the high-speed market.

And that's a big market: 78% of Korean households subscribe to broadband, the highest penetration rate in the world and well over twice that of the U.S. While broadband via standard cable modems and digital subscriber line (DSL) services are available for about $27 a month, households paying about $52 a month receive lightning fast 20 mbps VDSL service -- connections sufficient to receive live high-definition TV. In short, the apartment dweller in Korea enjoys the same level of Internet service as the largest corporate customers in
the U.S. All this in a country of 48 million which, in 1979, had just
240,000 phone subscribers.

Posted by James Zellmer at August 28, 2004 7:09 AM | Subscribe to this site via RSS:
Posted to Technology