Tuesday, February 3, 2009

Broadband: Can We Catch South Korea?

A couple of months ago I wrote about our poor broadband penetration rate (15th) in the U.S. when compared to the rest of the world. First place last year went to South Korea and in looks like the Koreans will not be sitting back enjoying their lead. A couple of days ago the Korea Communications Commission (KCC) announced plans to increase high-speed Internet and wireless broadband services to rates 10 times faster by the end of 2012.

The proposed network will be all IP-based with a total cost of 34.1 trillion won ($24.6 billion) spread out over the next five years. The Korean government will pitch in 1.3 trillion won ($937.83 million), with the rest being covered by private companies. The KCC estimates the project will create 120,000 jobs. Connected high-speed Internet services will increase to 1 Gbps and wireless services will increase to 10 Mbps. Here's a couple of interesting quotes from the JoongAng Daily:

The KCC said the changes will make high-definition TV images up to 16 times clearer, and interactive TV services such as e-commerce and home schooling will also be possible. The service will also make it possible to watch I-Max films on home TVs.

“This plan will bring innovation to the public’s digital lives,” KCC said in the release. Digital TV coverage will also rise to 96 percent in 2012 from the current 87 percent, according to the plan. The KCC added that the project will help Korea cement its position as one of the world’s leading IT countries. More than 94 percent of Korean households already have access to high-speed Internet services, and Korea has the highest number of subscribers to broadband services in the world as of last year, according to OECD data.

Can we catch them? Let's see. The U.S. Department of State keeps population and area statistics on their website. Here's the latest on South Korea:

Population (2008): 48,379,392
Area: 98,480 sq. km. (38,023 sq. mi.); slightly larger than Indiana.

Doing some quick calculations figuring on the
$937.83 million government input in South Korea:

Korean gov. dollars spent for upgrade per resident: ($937.83 million) / (48,379,392 people) = $19.38 per resident
Korean gov. dollars spent for upgrade per square mile: ($937.83 million) / (38,023 sq. mi.) = $24,664 per sq. mi.

Right now it looks like the Obama stimulus plan has between 6 and 9 Billion dollars tagged for broadband services. Do we have any chance of catching South Korea? Here's some statistics for the U.S.

Population (2008): 303,824,640
Area: 3,537,441 square miles

Let's use the higher $9 billion number and do similar calculations for the U.S.

U.S. gov. dollars spent for upgrade per resident: ($9 billion) / (303,824,640 people) = $29.62 per resident
U.S. gov. dollars spent for upgrade per square mile: ($9 billion) / (3,537,441 sq. mi.) = $2,544.21 per sq. mi.

We're in good shape when we compare dollars spent per resident - we're more than $10 over what South Korea will spend.

What hurts us is the physical size of our country - the South Korean government is spending almost ten times what we would spend per square mile. It looks like we're going to need to do things a little differently if we are serious about catching up.

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