Big in South Korea

A nation still living in the shadow of its colonial past and civil war leads the world when it comes

Frustrated with the slowness of your dial-up internet connection? Dismayed at how your business or organisation has been prevented from improving productivity through online communications? Join the millions of frustrated Britons, Americans, Germans, and so on, whose broadband dreams (along with their retirement portfolios) were flushed down the drain with the telecoms bust of 2001-02. As G7 policy-makers debate, discuss and wrangle over the wreckage of the global telecommunications industry, it is tempting to believe that universal deployment of broadband infrastructure is just another utopian dream born in the 1990s and best left to die there.

But wait. What if I told you that it's not just a utopian dream? What if I told you that there is a nation - still living in the shadow of its colonial past, still reminded by its artificially abridged geography of its 50-year civil war (which is officially still not over) and with a per capita income closer to Greece or Portugal than the US or UK - that has managed to deploy broadband faster and more extensively than any other nation in the world? Would you believe it if I told you that nation is South Korea?

When it comes to broadband, South Korea not only leads the world, but has left the competition far behind. The latest reliable statistics published by the OECD rank Korea number one in the world, with 23 broadband lines per 100 households as of last June. This is almost twice as many as Canada, ranked second with just 13 lines per 100 households. The US - which created the internet in the first place - has only eight lines per 100 households. The EU? Fewer than five per 100 homes. Even Japan, with 85 per cent of the world's robots, barely pulls ahead of the US.

National statistics don't capture the astonishing and nearly universal use of broadband in South Korea's capital and largest city, Seoul. In a speech in October 2001, Korea Telecom's president, Lee Sang Chul, noted that in some apartment complexes, the residential penetration rate hovered over 75 per cent. Nothing like this exists anywhere in the west.

From a distance, Korea's broadband success is striking. On the ground in Seoul, it is breathtaking. Few aspects of Korean society have been untouched by the internet, and most have been utterly transformed by ubiquitous access to broadband. In the past six months, social network services such as Friendster have revived the English-speaking world's interest in new internet applications. By contrast, such services have thrived in Korea's clannish culture for years. Today, young Koreans construct their identity online in a way that few in the west could imagine.

If aliens had visited earth in 1999 or 2000, armed only with Wired magazine as a guide, they might have believed that Finland was the planet's technological powerhouse. The industry watched as Nokia pioneered a fundamental shift in the way information technology was developed - by designing devices that would appeal not just to geeks, but to everyday consumers. The world's business leaders learnt about this isolated, rather peculiar nation and the wireless society of the future it was supposedly birthing. But a few years later, Nokia is on the ropes and the futurists have stopped talking about Finland as a technological utopia.

Already there are signs of a new kind of "Helsinki syndrome" among the technorati. For the first time since 1953, the flow of Koreans heading overseas to learn about the ways of the west is being matched by an equally eager cadre of corporate researchers and scholars heading east to have a look. Companies as varied as Intel and Lego are after the next big thing in South Korea. The British government even sent a high-profile fact-finding team in 2001 to study the nation's successful broadband policy.

Is Korea a flash in the pan, a technological shooting star like Finland seems to have turned out to be? And if it isn't, what lessons does its experience offer countries that are struggling to reduce gaps and delays in broadband deployment?

The good news is that there's an enormous amount to be learnt from South Korea. In his ground-breaking study of Korea's broadband policies, the Japanese telecommunications scholar Izumi Aizu summarised it this way: "In Korea, bottom-up, grass-roots entrepreneurship and aggressive netizenship contributed the most to its rapid explosion of broadband, coupled with accidental excess of bandwidth supply, fierce market competition and freedom-hungry citizens' activities."

Going by this formula, there is certainly a lot for the UK to be optimistic about. The wireless internet service providers, both for-profit and co-operative, that have sprung up throughout the British Isles exemplify the population's newfound enthusiasm and ability to make broadband happen. But there's bad news for the UK, too. Competition is lacking in a major way. As Aizu's colleague Adam Peake has written: "Broadband is growing where it is available, but affordable services are not available to around 33 per cent of the population, and realistic competition, a duopoly between DSL and cable, is a reality for only 40 per cent of the population. Broadband is provided by two cable companies whose networks do not overlap, and by resellers of a single wholesale provider of DSL service."

The role of cable television infrastructure as a competitive force for residential broadband should not be underestimated. In this area, the UK's historical choice of satellite television as its primary alternative to terrestrial broadcasting places it at a severe disadvantage in the broadband race. While cable networks pass approximately 50 per cent of British homes, less than one-third of these are subscribers, and many networks lack the upgrades needed to provide broadband services. In the US, consumers are just now beginning to witness the opening salvos of a price war between DSL providers and cable companies that seems reminiscent of Korea circa 1998-99. This trend seems likely to generate an explosion in broadband subscriber rates in the US, in a similar fashion to what happened in Korea.

So much for policies aimed at broadband diffusion. What policy-makers really want to know is what the pay-off will be in terms of economic growth and social development.

On the economic front, there is certainly reason for excitement. Many credit the expansion of the telecommunications sector, driven by interest in broadband, as one factor in Korea's rapid recovery from the Asian financial crisis of 1997-98. Korean electronics firms are benefiting from the unique insight into new lifestyles and practices based on broadband, which gives them an edge in the global marketplace. And entrepreneurial Korean firms are pioneering a whole slew of new technological industries such as multiplayer online gaming and telemedicine.

But let's suppose the UK can get its broadband act together and achieve the government's goal of being number one in broadband among the G7 by 2005. Such success isn't likely to be of much help in solving the biggest challenge to the nation's economic development - the gap between south-east England and the rest of the nation.

In both economic and social terms, broadband has done nothing to divert Koreans' obsession with all things Seoul. Even as national leaders consider decentralising the capital, the city continues to grow more rapidly than the rest of the nation (and in a sprawling chaotic mess reminiscent of London). As urban planners and economists around the world have begun to recognise, the places that are most connected to begin with tend to get connected to new networks first. And by virtue of their bigness and their facilities for face-to-face interaction, they are able to turn technologies for communications such as broadband into economic development much more rapidly and effectively than outlying areas.

It is clear that Britain needs to do more to accelerate broadband use and catch up with Asia and America. Furthermore, the lack of effective competition, an area where good public policy can make a major difference, is the major force propping up prices and holding up deployment.

The government needs to follow the example of Korea and create an environment where communities and small firms can build broadband infrastructure from the ground up, where they need it and when they need it. It should not be left to the big telecoms providers alone to provide such a critical public infrastructure.

Anthony Townsend is adjunct professor of communications and urban planning at New York University. He has received a Fulbright scholarship to study how the broadband revolution is playing out on the streets of Seoul, and you can follow his adventure at http://urban.blogs.com/seoul