The global broadband race

In the U.S., we may think of ourselves as a connected society, but in truth we have a lot of catching up to do if we're to crack the elite countries in broadband penetration. According to Gartner, the U.S. is tied for 12th with Japan and Spain in broadband penetration. Only 55% of U.S. households had a broadband connection by the end of 2007.

Compare that with South Korea, which has a whopping 93% penetration, Hong Kong with 76%, Switzerland with 69% or our neighbor to the north, Canada, where 65% of households are connected with broadband. Not every comparison is apples-to-apples, though, said Amanda Sabia, consumer services principal analyst with Gartner's technology and service provider research group. For example, island countries such as Hong Kong are densely packed with the majority of their populations living in high-rises — which are much easier to connect to fiber.

But the countries that have seemingly astronomical rates of broadband adoption tend to be those that have government policies actively encouraging, if not directly subsidizing, broadband to the home:

South Korea

Gartner projects the nation will have 97% household penetration level in 2012, much of which is due to the Ministry of Information's Cyber Korea 21 initiative, which has made direct investments in facilities-based service providers to encourage broadband availability.

Netherlands

The Dutch government launched the GigaPort project in 2002 with the aim of creating the top information-based economy in the world by 2010. GigaPort created a nationwide network linking cultural and research institutions and then funded research to develop applications that can be used over that bandwidth. The Netherlands sits at No. 3 in broadband penetration today with 74%?penetration. Gartner expects it to leapfrog Hong Kong in 2012, reaching 82% penetration.

Canada

Canada prides itself as being a very tech-savvy culture, having adopted the Internet at a much faster rate than the U.S., Sabia said, which in turn led to a faster rate of broadband adoption. The government has set a broadband policy down on paper that has helped encourage innovation, but so far most of Canada's broadband growth can be chalked up to the market and cultural attitudes. Gartner projects Canada will have broadband penetration of 79% by 2012, maintaining its No. 4 slot.

Is the U.S. going to languish in the double digits in the global broadband rankings? Sabia says no. The U.S. is actually on track to hit 77% penetration in 2012, making it fifth with Japan in household broadband. Sabia isn't expecting some big government policy to come down from the White House or Congress. Instead, she said state governments are likely to take their own initiative in encouraging broadband, just as some cities have launched municipal broadband projects. But mainly technology is catching up with the U.S. Most future broadband growth will be driven by fiber-to-the-home deployments from local exchange carriers, she said, adding that DSL prices will fall dramatically, putting them level with dial-up prices today.