I still find it surprising that often the people who create problems are asked to then fix them. And I’m not talking about the financial crisis. Broadband internet in the U.S. significantly lags behind many countries with slower and more expensive internet connections.  The Organization for Economic Co-operation and Development found the U.S. ranks 19th in the world with advertised rates of 9.6 megabytes per second, far behind Japan’s 92.8 mbps, Korea’s 80.8 mbps, and France’s 51 mbps.

If the U.S. had real competition for internet access, we would likely have faster speeds and more ubiquitous access (a shared infrastructure like we have for telephones and power lines would be an excellent start), but instead of promoting competition, the government continues to listen to and reward the incumbent with free money and laws that only keep our internet slow and expensive.

First, the FCC is listening to ISPs urging the government to define broadband at significantly lower speeds than the lower speeds we already have. Both Verizon and Comcast suggested speeds of than a single mbps. These numbers matter, since the $7.2 billion from the stimulus package is meant for broadband speeds.

Of course, expanding broadband is also important than just increasing speeds, but we lack any real map of what parts of the country have and don’t have broadband access.  The FCC for years used knowingly faulty data to claim there was competition between ISPs. Of course, the ISPs keep these maps secrets, making it more crazy that the government would look to the telecommunication industry’s own organization, Connected Nation, to map the nation broadband infrastructure.  Lots of questions are facing Florida for why it granted its mapping to the new and unproven group, when its bid was more than double that of the highly experienced (in the Florida market even) second highest bidder.

ISPs claim customers don’t want or need these faster speeds, but at the same time, ISPs are arguing that they need to traffic shape or even charge more because users are using so much bandwidth. The truth is 18 other countries are still paying less for much faster service; service that is available in more households and more areas of the country.  These countries will be more competitive at attracting technology companies who want to offer more bandwidth intensive products, like high-def videos and gaming, to other products we can’t yet imagine. How could YouTube have existed before broadband?  Let’s start planning for the future. The U.S. needs to stay technological competitive, and listening to the companies that made us fall behind are not the ones to trust when thinking about how to fix it.

As the stimulus package meandering its way through Congress, the good parts seem to get lost on the way.  $2 billion for rural broadband development has been removed showing its not as much of a priority as more tax cuts. This may not be a bad thing.

I have issue with broadband being mashed up in the stimulus (I have problems with the stimulus itself, but that’s another post). President Obama claims the money is meant to create jobs more than expand broadband, but why one and not the other?  Especially when the jobs research he’s basing this on is out-of-date?  The stimulus version of broadband looks more like a payoff to the current telecommunications players who’ve been unmotivated to spread broadband themselves (some even actively preventing it).

The United States is ranked 15th in broadband adoption with significantly slower speeds for more money. We need a real, long term broadband strategy, like Japan, where money is offered to companies who produce results.  I’d say this should apply to all government money (it doesn’t), but one step at a time. The government should offer low-interest loans and grants for broadband rollout proposals. Companies need to compete for this money and know they only get paid with results. We can even use the contractor rules - a third to start, a third in the middle, and a third at the end. This way the money isn’t just given to incumbent players with a history of not doing anything (hence why we’re 15th in broadband).

With government money tied to actual results, companies have to produce results - and those results are likely more jobs and a better standard of living for those with new broadband connections. And because of the government assistance, the price of the broadband will (should) be cheaper. Further, by not relying on tax breaks, like Obama’s proposal, grants and low-interest loans provide capital to encourage new players in the industry.  The lack of competition leads to more problems than obsolete technology.

Promising huge payouts to companies isn’t stimulus and it isn’t strategy. Let’s do broadband strategy better than we’re fixing our banks.

Several fiber optic companies in Amsterdam are testing 1 gigabit connections, internet speeds fast enough for four simultaneous HD movies at once.

The U.S. has been crawling behind Europe, Asia, and even Canada in broadband speeds and penetration.  Instead of rolling out fiber optic connections like Japan and Amsterdam, U.S. cable providers are imposing bandwidth caps.  Only Verizon offers high speed fiber optics in the U.S., which only gives speeds of 50 Mb/s, can cost almost $150, and is only available in a few major cities.

The U.S. suffers from a technological disconnect, only one part of our suffering infrastructure.  As more and more business and information moves online, countries with strong broadband infrastructures will have a competitive edge.  The Baller Herbst Law Group wrote a report on how the U.S. needs universal gigabits speeds by 2015 to stay economically competitive. But the U.S. lacks a broadband strategy like the successful seven year rollout in Japan.

In 2001, when the United States ranked 4th in the world, Japan had only a small handful of broadband lines. Spurred by the “broadband miracle” under way in nearby South Korea, Japan’s top government and private-sector leaders decided to make Japan the world’s leading broadband nation. They then developed and executed an all-hands-on-deck action plan to achieve that goal, including aggressive federal subsidies, low-interest and no-interest loans, loan guarantees, tax breaks, grants-in-aid to municipalities, targeted government purchases of services, a concerted national public education campaign, and a wide range of private-sector initiatives driven by a sense of national purpose and long-term thinking.

Today, Japan has the fastest and cheapest broadband in the world. Consumers in Japan can get broadband that is 10 times faster than the speeds available to average Americans, for prices that are less than a quarter of the prices that Americans must pay. Broadband providers currently compete at 1 Gbps, and this is expected to increase to 10 Gbps by 2010. Broadband is now available almost ubiquitously throughout Japan, and the “almost” will be removed by 2010. Today, 85 percent of households have access to fiber connectivity, and more than 35 percent of households have adopted it. Availability of fiber connective it will increase to 90 percent by 2010.

The U.S. ranks 15th in median broadband speeds at 2.35 megabits per second, behind Japan’s 63 mb/s.

To say the U.S. does nothing isn’t true.  Much of U.S. policy has hurt broadband penetration and competition.  The FCC uses provenly false methods of tracking cable competition and still pushes a 30 percent limit on cable company subscriber base.

While penalizing cable companies, the FCC lets telecommunication companies consolidate while doing away with common carrier requirements that have been vital to Japan’s success and would help increase competition.

The U.S. needs a broadband strategy that includes federal subsides and low-interest loans to encourage development.  These incentives ensure broadband will reach even the poorest areas and keep the United States competitive with the rest of the world. It will be expensive to full deploy fiber connections country wide.  Estimates in the U.K. are between $9 and $50 billion. As Japan (and Australia) have shown, results can be seen within a few years to the benefit of companies and citizens.

This is an issue unfortunately being ignored this election year.  When the next generation of Microsofts, Googles, and Apples originate in South Korea and Denmark, then the U.S. may get a clue.  But by then we might be too far behind to play catch up.

John Grapper of the Financial Times points out (registration required) U.S.’s lagging infrastructure from worn out roads to spotty cell coverage and poor broadband penetration.

If anyone doubts the problems of US infrastructure, I suggest he or she take a flight to John F. Kennedy airport (braving the landing delay), ride a taxi on the pot-holed and congested Brooklyn-Queens Expressway and try to make a mobile phone call en route.

That should settle it, particularly for those who have experienced smooth flights, train rides and road travel, and speedy communications networks in, say, Beijing, Paris or Abu Dhabi recently. The gulf in public and private infrastructure is, to put it mildly, alarming for US competitiveness.

Throw this on the pile with healthcare and green technology and it’s scary to think how the richest country in the world can keep calling itself that.  Creative Class Exchange and Economist’s View echo Grapper’s concerns. Thomas Friedman wrote in The World is Flat how he traveled up and down Japan on the bullet train, easily sending emails all along the way.  I compare London’s amazing subways with a new train every 2-3 minutes to Boston’s horrendous 10-20 minute waits, even during peak hours (and don’t get me started on the $20 billion Big Dig).

This faulting infrastructure costs U.S. money and productivity.  We can’t get municipal wireless into major cities and the FCC would rather limit cable companies than let them spread broadband around the country.

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Sales of the Xbox 360 in Japan have increase almost nine times since the release of the RPG Blue Dragon in the beginning of December. This boost even allowed the Xbox 360 to outsell the Playstation 2 for a short time.

Microsoft has been struggling to improve its international market share, especially in Japan where Sony’s Playstation and Nintendo have near total dominance. Blue Dragon, the Xbox 360 exclusive, is almost a love letter for Japanese gamers. Blue Dragon teams Hironubu Sakaguchi, the creator of Final Fantasy, with character designs by Dragon Ball Z creator Akira Toriyama, and music by Final Fantasy’s music composer Nobuo Uematsu for a visually stunning and critically acclaimed RPG.

Blue Dragon’s success could be just another piece of kryptonite against Sony. It’s questionable whether there will even be enough Playstation 3s by the next holiday season. Blue Dragon could be the next big franchise with more international support than Xbox’s Halo and Gears of War. Also, popular RPG Dragon Quest has left Playstation for Nintendo. With systems costing so much now, it’s hard to own mor ethan one. If these exclusives remain, Blue Dragon on Xbox, Dragon Quest (and Zelda) on Nintendo, and Final Fantasy on Playstation, then the console wars might be getting more vicious not only on the companies, but for us fans. How are we supposed to choose?

Exclusives were looking to become less prevelant as product costs skyrocket. Elder Scrolls ported to Playstation and Metal Gear Solid is rumored to go multi-platform. Namco reported designing games for the Playstation 3 requires sales of 500,000 units, which is getting harder to do as game prices and length continue to increase. Blue Dragon’s success in Japan shows the Xbox has legs outside of the U.S. and that means Sony and Nintendo no longer have safe harbors. This might mean more exclusives, which Xbox seems to have the leg up. Gears of War and Halo are more than a match for Final Fantasy, Zelda, and Mario. And Xbox has Mass Effect and Lost Planet ready to pound the competition in the coming year. For this Playstation fan, I’m starting to think Xbox is the system to bet on.