Summary:  Once a leader in Internet innovation, the United States has fallen far behind Japan and other Asian states in deploying broadband and the latest mobile-phone technology. This lag will cost it dearly. By outdoing the United States, Japan and its neighbors are positioning themselves to be the first states to reap the benefits of the broadband era: economic growth, increased productivity, and a better quality of life.

  Thomas Bleha, the recipient of an Abe Fellowship, is completing a book on the race for Internet leadership. Previously, he was a Foreign Service officer in Japan for eight years.

			Topics: Science and Technology U.S. Policy and Politics Which Broadband Nation? By Philip J. Weiser and Thomas Bleha Foreign Affairs, September/October 2005 Who Will Control the Internet? By Kenneth Neil Cukier Foreign Affairs, November/December 2005 Preparing for the Next Pandemic By Michael T. Osterholm Foreign Affairs, July/August 2005 Winning the Oil Endgame: Innovation for Profits, Jobs, and Security Amory B. Lovins et al. : Rocky Mountain Institute, 2004. Beyond Kyoto By John Browne Foreign Affairs, July/August 2004 Space Diplomacy By David Braunschvig, Richard L. Garwin, and Jeremy C. Marwell Foreign Affairs, July/August 2003

BROADBAND NATION?

In the first three years of the Bush administration, the United States dropped from 4th to 13th place in global rankings of broadband Internet usage. Today, most U.S. homes can access only "basic" broadband, among the slowest, most expensive, and least reliable in the developed world, and the United States has fallen even further behind in mobile-phone-based Internet access. The lag is arguably the result of the Bush administration's failure to make a priority of developing these networks. In fact, the United States is the only industrialized state without an explicit national policy for promoting broadband.

It did not have to be this way. Until recently, the United States led the world in Internet development. In the late 1960s and 1970s, the Department of Defense's Advanced Research Projects Agency conceived of and then funded the Internet. In the 1980s, the National Science Foundation partially underwrote the university and college networks -- and the high-speed lines supporting them -- that extended the Internet across the nation. After the World Wide Web and mouse-driven browsers were developed in the early 1990s, the Internet was ready to take off. President Bill Clinton and Vice President Al Gore showed the way by promoting the Internet's commercialization, the National Infrastructure Initiative, the Telecommunications Act of 1996, and remarkable e-commerce, e-government, and e-education programs. The private sector did the work, but the government offered a clear vision and strong leadership that created a competitive playing field for early broadband providers. Even though these policies had their share of detractors -- who claimed that excessive hype was used to sell wasteful projects and even blamed the Clinton administration for the dot-com bust -- they kept the United States in the forefront of Internet innovation and deployment through the 1990s.

Things changed when the Bush administration took over in 2001 and set new priorities for the country: tax cuts, missile defense, and, months later, the war on terrorism. In the administration's first three years, President George W. Bush mentioned broadband just twice and only in passing. The Federal Communications Commission (FCC) showed little interest in opening home telephone lines to outside competitors to drive down broadband prices and increase demand.

When the United States dropped the Internet leadership baton, Japan picked it up. In 2001, Japan was well behind the United States in the broadband race. But thanks to top-level political leadership and ambitious goals, it soon began to move ahead. By May 2003, a higher percentage of homes in Japan than in the United States had broadband, and Japan had moved well beyond the basic connections still in use in the United States. Today, nearly all Japanese have access to "high-speed" broadband, with an average connection speed 16 times faster than in the United States -- for only about $22 a month. Even faster "ultra-high-speed" broadband, which runs through fiber-optic cable, is scheduled to be available throughout the country for $30 to $40 a month by the end of 2005. And that is to say nothing of Internet access through mobile phones, an area in which Japan is even further ahead of the United States.

It is now clear that Japan and its neighbors will lead the charge in high-speed broadband over the next several years. South Korea already has the world's greatest percentage of broadband users, and last year the absolute number of broadband users in urban China surpassed that in the United States. These countries' progress will have serious economic implications. By dislodging the United States from the lead it commanded not so long ago, Japan and its neighbors have positioned themselves to be the first states to reap the benefits of the broadband era: economic growth, increased productivity, technological innovation, and an improved quality of life.

JAPAN'S HIGH-WIRE ACT

In the late 1990s, after a decade in the economic doldrums, Japan lagged well behind the United States in Internet access and broadband usage. But in mid-2000, Prime Minister Yoshiro Mori appointed the Information Technology Strategy Council, headed by Sony Chairman Nobuyuki Idei, which put together a bold plan to make Japan the "world's leading IT [Information Technology] nation" by 2005. Just as President Bush was taking office, a new Japanese "IT strategic headquarters," headed by the prime minister and including the entire cabinet, launched an "e-Japan strategy."

A central goal of that strategy was to bring better-than-basic broadband to 40 million of Japan's 46 million households within five years. The government hoped to make high-speed broadband available to 30 million households (through cable or digital subscriber lines [DSL], which use phone wires) and ultra-high-speed broadband connections to another 10 million (through fiber-optic cable). But even Japanese officials were skeptical about reaching such ambitious goals. And they understood that if they wanted even to come close, they would have to enlist the private sector and create the proper conditions.