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U.S. 'Broadband Reality Check' Report Card

The United States continues to lag behind the rest of the world in accessible and affordable broadband service, with no signs of closing the gap, according to a new report released by Free Press, the Consumer Federation of America and Consumers Union.

Contradicting the rosy picture painted by the Federal Communications Commission (FCC) and Congress, "Broadband Reality Check II" exposes the truth behind America's digital decline: A failed broadband policy that has left Americans with higher prices, slower speeds and no meaningful competition for high-speed Internet service.

"President Bush set a goal of bringing universal, affordable high-speed Internet access to every household by 2007," said S. Derek Turner, research director of Free Press and author of the report. "We're nowhere close to reaching that goal. Yet the FCC seems content to ignore the problem, manipulate the data, and pretend we're moving forward."

Broadband Reality Check II updates last year's report on the state of high-speed Internet in America and details new empirical research. Among its key findings:

- The United States is 16th in the world in broadband penetration, and 14 other OECD nations saw higher overall net growth in broadband adoption than the United States from 2001 to 2005.

- Consumers in other countries enjoy broadband connections that are far faster and cheaper than what is available here. U.S. consumers pay nearly twice as much as the Japanese for connections that are 20 times as slow.

- The most important factors explaining the digital divide among nations are household income and poverty — not population density.

- U.S. broadband prices aren't dropping: Cable modem prices are holding constant or rising, and DSL customers on average are getting less bandwidth per dollar than just a year ago.

- Despite claims of "fierce competition," cable and DSL account for 98 percent of the residential broadband market. And over 40 percent of U.S. ZIP codes have one or fewer DSL or cable modem providers reporting service.

- The market share of "third platform" alternatives like satellite, wireless and broadband over powerline technologies has actually decreased over the past five years.

- Those living in urban areas are nearly twice as likely to have home broadband access as their rural counterparts.

- Approximately one out of 10 households with incomes below $30,000 reported having high-speed Internet access, but six out of every 10 households with incomes above $100,000 had broadband.

- The price of broadband service, and not necessarily the lack of a home computer, is the key barrier to broadband adoption by low-income households.

- The FCC uses misleading and meaningless measures of broadband coverage and competition, inflating estimates of broadband availability and competition.

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