National Broadband Plan: Best Practices

WTISD, 2011
BANGLADESH
Connect the Unconnected
National Broadband Plan

Best Practices
GET CONNECTED. rhassan@btrc.gov.bd www.btrc.gov.bd +880-1552202725, DIRECTOR (SYSTEMS & SERVICES), BTRC, RAMNA, DHAKA
TABLE OF CONTENTS
• Benefit of Broadband, Correlation between GDP and Penetration?
• Do we really need a National Broadband Plan?
• National Broadband Plan, what others are saying?
• Some Best Practices, Case studies or Surveyed Information?
DEMAND SIDE AND SUPPLY SIDE DRIVERS
FINANCIAL GROWTH
CORRELATION BETWEEN PENETRATION
GET CONNECTED. rhassan@btrc.gov.bd www.btrc.gov.bd +880-1552202725, DIRECTOR (SYSTEMS & SERVICES), BTRC, RAMNA, DHAKA 2
BROADBAND: MYTHS
• Higher per-capita incomes mean - can more people afford to purchase

broadband connectivity?
• Does broadband stimulate the economy, or does a growing economy lead to

take-up of broadband?
• Broadband can be of benefit to micro-enterprises in emerging markets, most

says, to a greater extent than mobile handset connectivity?
• To maximize the potential of broadband in emerging markets, do we consider

both the demand-side and the supply-side drivers of broadband growth?
ECONOMIC STUDIES: PENETRATION VS. ECONOMIC GROWTH
Broadband Penetration and Gross National Income in Various Economies
For every 10 percentage-point

increase in broadband penetration
there is an increase of 1.3
percentage points in economic
growth.
Between 2000 and 2007, the ICT

sector accounted for 3 to 7
percent of GDP, regardless of the
country’s level of income.
Source: The World Bank Group (Washington, DC, 2009), Information and Communications for Development
2009: Extending Reach and Increasing Impact.
ECONOMIC STUDIES: PENETRATION VS. ECONOMIC GROWTH
Impacts of Broadband on Economic Activities in U.S. Communities
Source: The World Bank Group (Washington, DC, 2009), Information and Communications for Development
2009: Extending Reach and Increasing Impact.
GROWTH EFFECTS : BROADBAND
Developing Economy
with an average of 10
broadband subscribers
per 100 people would
have enjoyed a 1.38
percentage point
increase in per capita
GDP growth.
BROADBAND > PRODUCTIVITY > GENERATE NEW JOBS
Correlation between GDP Growth and Broadband Penetration

• Introduction of high-speed communications infrastructure makes it possible
to welcome foreign business, such as outsourcing, and also facilitates
innovation, with business and connectivity aggregation to local level.
ICT Related
patents as a
percent of
National total
Source: OECD Patent

Database 2005
BROADBAND PROJECTIONS: COUNTRY SPECIFIC
Even in the economic downturn, many governments are allocating funds in their economic
stimulus packages specifically for investment in broadband.
Source: Analysys Mason, FCC, OECD, ACCC Website
The USA has committed USD7.2 billion to the expansion of rural broadband coverage.
Australia has dedicated just over half (USD30 billion) of its total economic stimulus
package to broadband.
In 1990s, South Korea created a durable backbone structure for long-term broadband
policy by passing a law requiring review of a national broadband strategy every 5 years.
The Korean government built this national optic backbone in the initial stage, followed
by a facilitation role in the growth stage.
BROADBAND PROJECTIONS: COUNTRY SPECIFIC
Japan created an IT Strategy Headquarters to oversee the execution of its broadband

Source: Analysys Mason, FCC, OECD, ACCC Website
strategies, beginning with the e-Japan Strategy of 2001.
In Japan, government used financial incentives in the growth phase of industry to develop
core & access infrastructure.
In June 2009, the U.K. government published Digital Britain, its first broadband plan.
BB market in Australia has been developed under the PPP model supported by financial
incentives from government.
Department for Culture, Media and Sport and Department for Business, Innovation and Skills, Digital Britain: Final Report (2009), available at
http://www.culture.gov.uk/images/publications/digitalbritainfinalreport-jun09.pdf.
THE NATIONAL BROADBAND PLAN: CONNECTING AMERICA
USA [1/2]: FULFILLING THE CONGRESSIONAL MANDATE [JUST A FEW ..]
• In early 2009, Congress directed the Federal Communications Commission (FCC) to

develop a National Broadband Plan to ensure every American has “access to
broadband capability.”
• Establishing competition policies.
• Ensuring efficient allocation and use of government owned and government-

influenced assets.
• Make 500 megahertz of spectrum newly available.
Source: US Connecting America: The National Broadband Plan.

www.broadband.gov/plan/
USA [2/2]: FULFILLING THE CONGRESSIONAL MANDATE [JUST A FEW ..]
• Create the Connect America Fund (CAF) to support the provision of affordable
broadband and voice with at least 4 Mbps and shift up to $15.5 billion from
Universal Service Fund (USF).
• Reform inter-carrier compensation, which provides implicit subsidies to telephone

companies by eliminating per-minute charges.
• Broadband plan for Health care, Education and Public safety.
• Broaden the USF contribution base to ensure USF remains sustainable over time.

DEVELOPED TARGET: 4MBPS BY 2020

DETERMINING BROADBAND AVAILABILITY GAP, WHO ELSE TO CONNECT TO?
FCC analysis finds

that the level of
additional funding
required is
approximately $24
billion (present
value in 2010
dollars) for this
gap.
USA NBP LAUNCHED AT 2010, GOVT INTERVENED
Source: Analysys Mason, FCC, OECD, NBP Website
NBP= National Broadband Plan
MALAYSIA: GOVT KICK-STARTED BB GROWTH BY DEPLOYING BACKBONE INFRA
Telekom Malaysia predicts that its high-speed broadband roll-out will boost
GDP by 0.6% by 2017 and create 100000 jobs.
Telekom Malaysia Berhad (Kuala Lumpur, 2009), HSBB project boosts capacity building, technology transfer and business activity for the economy.
GLOBAL EXPERIENCE: MOSTLY PPP/FINANCIAL INCENTIVES/DIVESTING INCUMBENT’S BACKHAUL
INDIA: BB PENETRATION AS IT REFLECTS TO GDP
• Increase in broadband
penetration of 1% will
contribute INR 162 bn, or
0.11% to Indian GDP in 2015.
• Allocation of additional 5 MHz
of 3G spectrum will increase
BB penetration by 3.3% of
population and enhance GDP
by INR 538 bn in 2015.
1. Based on World Bank report; 2. Consultation Paper on National Broadband Plan – 10th June 2010 – TRAI, GSMA Report
INDIA: PROPOSED INVESTMENT MODELS; ANALYSYS MASON & CII
Source: Analysys Mason, Industry Inputs, CII
BROADBAND METHODOLOGY
Demand aggregation
Aggregate and guarantee demand from the public sector.
South Korea aggregated and guaranteed demand from public-sector bodies in

order to improve operators’ business plans.
Three phases of roll-out of broadband services, the government paid a total of

USD900 million for fibre backbone and access network, in exchange for
broadband services being provided to all public-sector bodies.
Source: 1. The World Bank Group (Washington, DC, 2009), Broadband for Africa: policy for promoting the development of backbone networks.
2. Creating successful broadband policies in developing countries by Daniel Jones and Martin Scott; August 2009; Analysys Mason.
BB METHODOLOGY
Reverse subsidy auctions

Minimizing the cost of the subsidy awarded.
In a reverse subsidy auction the winner is the party that bids the least, for the value of
the subsidy for which they are willing to carry out the specified task.
Peru, with the aim of providing broadband access to 2840 localities - competitive bidding
process (Reverse subsidy auctions), the winning bids totaled USD15.1 million from
USD18.6 million.
Source: 1. The World Bank Group (Washington, DC, 2009), Broadband for Africa: policy for promoting the development of backbone networks.
2. Creating successful broadband policies in developing countries by Daniel Jones and Martin Scott; August 2009; Analysys Mason.
MORE BEST PRACTICES …
Undertake an analysis of
competitiveness in the broadband
market
Create a broadband promotion agency,

Broadband Commission
Aggregate public-sector demand
Subsidize expansion of broadband

access
Digital literacy and awareness of the

benefits of broadband
Source: Creating successful broadband policies in developing countries by Daniel Jones and Martin Scott; August 2009, Analysys Mason.
OPEN SESSION
Source: Peter Broelman;

http://newmatilda.com/2009/04/09/43-billion-elephant-0

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WTISD, 2011

Connect the Unconnected

National Broadband Plan

• Benefit of Broadband, Correlation between GDP and Penetration?

• Do we really need a National Broadband Plan?

• National Broadband Plan, what others are saying?

• Some Best Practices, Case studies or Surveyed Information?

DEMAND SIDE AND SUPPLY SIDE DRIVERS

CORRELATION BETWEEN PENETRATION

• Higher per-capita incomes mean - can more people afford to purchase

• Does broadband stimulate the economy, or does a growing economy lead to

• Broadband can be of benefit to micro-enterprises in emerging markets, most

• To maximize the potential of broadband in emerging markets, do we consider

Broadband Penetration and Gross National Income in Various Economies

For every 10 percentage-point

Between 2000 and 2007, the ICT

Impacts of Broadband on Economic Activities in U.S. Communities

Correlation between GDP Growth and Broadband Penetration

Source: OECD Patent

Japan created an IT Strategy Headquarters to oversee the execution of its broadband

strategies, beginning with the e-Japan Strategy of 2001.

• In early 2009, Congress directed the Federal Communications Commission (FCC) to

• Establishing competition policies.

• Ensuring efficient allocation and use of government owned and government-

• Make 500 megahertz of spectrum newly available.

Source: US Connecting America: The National Broadband Plan.

• Reform inter-carrier compensation, which provides implicit subsidies to telephone

• Broadband plan for Health care, Education and Public safety.

Source: US Connecting America: The National Broadband Plan.

Source: US Connecting America: The National Broadband Plan.

FCC analysis finds

Source: US Connecting America: The National Broadband Plan.

NBP= National Broadband Plan

Aggregate and guarantee demand from the public sector.

South Korea aggregated and guaranteed demand from public-sector bodies in

Three phases of roll-out of broadband services, the government paid a total of

Reverse subsidy auctions

Create a broadband promotion agency,

Aggregate public-sector demand

Subsidize expansion of broadband

Digital literacy and awareness of the

Source: Peter Broelman;

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