Call (02) 8006-7124

Letter to the Editor: Market Clarity Response to OECD Criticism

Letter to the Editor: Market Clarity Response to OECD Criticism

Posted by Shara Evans in Press Releases 23 May 2007


The OECD has criticised the accuracy of some data points contained within our report on broadband in OECD countries.

This criticism has ignored the comprehensive list of nearly 70 references (including URLs) to national statistics and regulatory publications from which Market Clarity’s data is drawn, and the detailed discussion within the report on ambiguities pertaining to these national data sets.

We welcome factual correction, because given the enormous weight given to broadband “standings” around the world, we consider two aspects of the analysis to be absolutely vital: the information should be correct, and the data set should be subject to scrutiny vis-à-vis published data from official national sources.

Having put our belief in scrutiny on the record, we welcome it ourselves, and we look forward to the chance to enhance our data set with input from our colleagues in other countries, and once again make this information available for public inspection.

We also point out that other knowledgeable commentators, such Andrew Schmitt at Nyquist Capital (USA) describe the data in Market Clarity’s report as “simply the best global broadband stats I’ve seen…

Nonetheless, we need to look at the big picture — and debating the validity of specific data points ignores key findings in our report.

Indeed, it is Market Clarity’s view that the broadband picture is not fully appreciated by looking at a single metric — broadband access connections per 100 inhabitants — a view that is shared by Australia’s Minister for Communications (Senator Helen Coonan) and the US Department of State, who in an April 2007 letter to the OECD:

“We are concerned about the methodology on which the new statistics were based, and their failure to capture important factors particularly their reliance on user subscriptions as a measure of broadband use.” (Ambassador David A. Gross, United States Coordinator, International Communication and Infrastructure Policy, US Department of State)

Market Clarity believes that looking at broadband take-up by households or individuals is much more important than looking at the number of physical broadband access connections per 100 inhabitants — the measure currently used in the OECD’s broadband league tables.

Indeed, one can argue that anything less than 100% household connectivity could be considered a failure in the broadband race.

Is high capacity infrastructure needed? Certainly.

However, one must also consider the full range of causal factors that impact why a household may not yet have a broadband service. Is it because of lack of broadband infrastructure? Is it because a family can’t afford a broadband service? Or, is it because a family does not see the value in subscribing to a broadband connection?

There are follow-on policy implications for each of these scenarios, and infrastructure alone won’t address the issues of affordability and awareness.

Another important aspect of broadband take-up is the speed at which subscribers connect to the broadband infrastructure. Are families connecting at the highest possible speed that the existing infrastructure can support? If the answer is “no” — is this because the packaging of broadband services encourages service take-up of lower speeds? This topic is also covered in our report.

We are also of the opinion that understanding what the citizens of each country have on offer for their entry-level broadband packages is just as important as broadband infrastructure related issues. In our report, we’ve included an examination of services from major carriers in each country, as an indicative metric describing the speed of “entry level” broadband plans.

This view is shared by the Australian Telecommunications Users Group (ATUG), who remarked on the correlation between market packaging and broadband take-up in their 18 May 2007 Newsletter.

In our report, we also examine the nuances of data collection across countries, and suggest that a margin of error should be applied to the ranking of country’s performance. One need look no further than the difference in Australia’s broadband numbers reported by the ACCC (3.6 million) and the ABS (3.9 million) for the period ending September 2006 to see evidence of how the methodology used to collect a country’s source data can impact a country’s standing.

We believe that our suggested approach of “banding” countries with very similar results into a single category has merit. According to The Australian (15 May 2007), the Australian Bureau of Statistics endorses this approach.

Market Clarity has produced this report because we consider the broadband debate to be of great importance. We stand by our decision to make this information public, because we firmly believe in the value of public data and public debate.

With this in mind, we have sought to offer readers of this document a rich data set — one which allows interested parties to link the information in our data set back to official country reporting on broadband — rather than being asked to rely on a “black box” as the source of their information.

It should also be understood that Market Clarity’s decision to link our data set to published data from each OECD nation’s statistical or regulatory body means that our analysis will also reflect any faults, deficiencies or vagaries inherent within each nation’s source data set.

Market Clarity has fully disclosed the methodology used to compile our data set, and we’ve provided a comprehensive set of references to source data published by national statistics and regulatory bodies.

We also acknowledge that there was a production (paste) error in the last two columns of Table 10 in the first cut of our report, which we noticed shortly after the report was published on our Website. An updated version of the document was posted on our Website within 24 hours of publishing the original document. Because we made the research available for free download, and did not require registration, we had no way to ensure that every reader of the first version returned to download the correction.

Market Clarity’s report, Broadband Wars: The OECD’s International Broadband Arms Race is available as a free download.


About Market Clarity

Market Clarity is an award-winning telecommunications analyst firm founded in January 2006 by leading Australian telecommunications researcher and strategic consultant, Shara Evans. The firm covers all aspects of telecommunications, including traditional and converged services and technologies. Market Clarity’s extensive databases of technical and market information cover a wide range of facts and figures on the technologies and services that are shaping the Australian telecommunications market. Market Clarity’s GIS tools and research databases enable the correlation and presentation of highly complex information in an intuitive geographic (map) format.

Market Clarity’s insights are derived from a deep understanding of technology, coupled with comprehensive research, which examines each segment of a service’s value chain as well as underlying population demographics. By leveraging its engineering knowledge with an ongoing primary research program, Market Clarity provides insight, intelligence and advice on all aspects of the Australian telecommunications market including traditional, converged and future technologies. Market Clarity’s unparalleled market knowledge and research databases are brought to all consulting engagements.

Market Clarity’s contribution to telecommunications in Australia was recognised by the telecommunications industry’s peak body, the Communications Alliance, which awarded the company its 2007 ACOMMS award for Services to the Industry – Professional Services.

Market Clarity is headquartered in Sydney, Australia.