Its economic and political might notwithstanding, the USA is falling behind other nations in providing consumers and small businesses with broadband.

America now ranks 11th worldwide in broadband use behind places such as its neighbour Canada, South Korea, Hong Kong and Iceland, says a recent United Nations report quoted in a USA TODAY story here.

“For now, nations besting the USA have smaller economies and don’t present an immediate economic threat,” says the story. “But as other nations leap ahead in broadband, their industries – from South Korean automakers to Canadian doctors – prosper. Meanwhile, hundreds of thousands of U.S. companies, such as LaBelle, waste time and money that could otherwise help drive growth.”

“I’m just amazed how far behind we are,” Sung Won Sohn, chief economist at Wells Fargo, is quoted as saying, also stating that more work could move overseas as nations beef up broadband networks and increase worker tech skills.

The Bush administration says broadband is a ‘critical element’ of the future economy in areas such as telemedicine, yet its broadband strategy is “mostly designed to foster competition by reducing regulatory hurdles,” says the report, by Jim Hopkins.

“The idea: Competition will lower prices, boosting broadband use.

“That appears to be working, but slowly. About 21% of U.S. homes had high-speed access last year vs. 15% in 2002, says researcher Yankee Group. The number of broadband lines jumped 18% to 23.5 million during the first half of last year, the Federal Communications Commission says.

“The big driver: lower prices. Monthly prices fell to $27 in many areas, from $40 a year ago.”

The European Union has set a goal of widespread broadband access in its 15 nations by 2005. South Korea’s government is spending $50 billion to extend broadband to businesses and homes. Canadian provinces are spending nearly $190 million on broadband to bring cutting-edge health care and government services to remote communities and, the USA TODAY report goes on, they, and other nations, have jumped ahead through:

* Government investment. South Korea, Singapore and other Asian nations supercharged broadband adoption starting in the 1990s by pouring billions of dollars worth of government money into building high-speed networks to attract foreign investment.
* Rapid upgrades. Many Asian and other developing nations went straight to wireless phone service and high-speed Net access from little or no phone service 20 years ago.
* Simpler regulations. In largely state-controlled economies, governments pushed broadband ahead by fiat.

But in the USA, broadband has been slowed by a patchwork of federal and state regulations, says Hopkins, continuing:

“Moreover, major phone companies didn’t want to invest in broadband because they feared the FCC would force them to lease lines to high-speed rivals. Indeed, the FCC last year said phone companies had to continue sharing existing lines with rivals. But the agency said the companies won’t have to share new lines. That will spur more investment – though not enough to make a big impact on overall capacity, says researcher Precursor. New lines will account for only 1% of all high-speed lines, says Precursor analyst Scott Cleland.”

Believing broadband is so critical to economic growth that they’ve got to do something to speed its spread, some states, such as Michigan, are taking matters into their own hands, says the report, adding:

“Michigan’s solution, lauded in a TechNet study last year, was to make it easier and cheaper for telecoms and other companies to build high-speed networks. That would boost competition and cut prices. It is intended to also help attract more tech start-ups, supporter say, and create 497,000 jobs over 10 years – about 10% more than the state has now, economic development officials say.

“Lawmakers in 2002 passed the LinkMichigan plan. It set statewide fees of 5 cents a foot to lay fiber-optic and other cable across roads. Fees had been as high as $2 a foot. Lawmakers also required cities and towns to act on construction permits within 60 days.

“Lawmakers created the Michigan Broadband Development Authority to spur creation of high-speed start-ups with low-interest loans. It expects to lend as much as $15 million over the next year to young companies targeting underserved markets.

“The first loan, for $350,000, went to ISP Wireless in Alma, Mich. It sells wireless high-speed access, meaning users can surf the Web even if they lack cable or DSL.”

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