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Developing Government objectives for broadband

Developing Government objectives for broadband

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Published by ICTdocs
Vodafone: Developing Government objectives for broadband
Vodafone: Developing Government objectives for broadband

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Published by: ICTdocs on May 22, 2011
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Moving the debate forward The Vodafone Policy Paper Series
Number 10 March 2010
DevelopingGovernmentobjectivesfor broadband
I hope you enjoy our tenth Vodafone Policy Paper. Our aim in these papersis to provide a platform for leading experts to write on issues in publicpolicy that are important to us at Vodafone. These are the people that welisten to, even if we do not always agree with them. These are their views,not ours. We think that they have important things to say that should be of interest to anybody concerned with good public policy.
Vittorio Colao,
Chief Executive, Vodafone Group
WelcomeIntroductionOptimal Investment in Broadband : The Trade-Off Between Coverage and Network CapabilityDemand-side measures to stimulate Internet and broadband take-up– Vittorio Colao– Richard Feasey– Robert Kenny– David Lewin
Published by Vodafone Group PlcCopyright © 2010 Vodafone Group PlcISBN 978-0-9552578-5-8
 The recent global financial crisis has seen an increase inintervention by public authorities in many areas of activity we had previously thought reserved for theprivate sector. Telecommunications markets have beenno exception. The past few years have seenpolicymakers committing billions of euros (and billionsof dollars) of taxpayers' money - if not yet actuallyspending it – towards the funding of new telecomsinfrastructure, particularly high speed broadbandnetworks. These funds are intended not only to delivershort term stimulus and create jobs, but also to lay thefoundations for future competitiveness, sustainabilityand social cohesion. Such aims are shared by mostpolicymakers (and by many in industry). Achieving themhas meant that Governments are now more directlyengaged in telecommunications markets than at anytime since privatisation swept the world almost twentyyears ago. The initiatives taken by Governments around the worldhave not, however, been informed by a common viewabout how or where public funds should best beallocated. Policymakers appeared to be setting a rangeof different targets with very different aspirations interms of the coverage, speed and timing of the networksthey proposed to support. This implied either that eachcountry had very different conditions which justifiedvery different goals or, more plausibly in our view, thatthere was really no analytical underpinning for the wayin which most of these targets were being set. Wetherefore asked Ingenious Consulting to think aboutwhat such an analytical framework might look like, andto assess some of the existing schemes against theirbenchmarks.Ingenious find that there is a strong case for using publicfunds to extend basic broadband infrastructure – ADSLor possibly wireless – to as much of the population aspossible. This suggests that there may be a case for a'Mobility Fund' to extend wireless coverage, as the FCC'smuch anticipated National Broadband Plan is expectedto propose or as the Irish Government haveimplemented. However, Ingenious find that the case forpublic funding of higher bandwidth fibre to the home orfibre to the curb is much less clear. Policymakers wouldneed to make implausibly ambitious assumptions aboutthe public benefits, or externalities, associated with veryhigh speed broadband networks to justify the level of public subsidy which is proposed, for example, by theAustralian Government today.Given the difficulty of making a case for wide publicintervention to support fibre if there is already extensivebasic broadband deployment, we were also interested inhow public resources had been used, or could be used,to boost demand over those networks that already exist.Our hypothesis was that Governments can do a lot tostimulate demand amongst groups who have so farproven immune to the marketing activities of privatefirms. If demand could be expanded in this way, then theprospects for further investment on the supply sidemight also improve.We asked Plum to assess which Europeans used theinternet today and what might be done to get more of them using it in future. This kind of work has been doneby some agencies – most notably the FCC in their verycomprehensive Broadband Plan preparations – but notby others. We also wondered whether previousGovernment attempts to boost use of the internet couldteach us anything about how public funds should beapplied – or not - in future. The results here are worrying.A great deal of public money has been spent on what wemight loosely call demand side initiatives in Europe butPlum find that much of it appears to have been wasted.Notable exceptions include Portugal's initiative toincrease student adoption of the internet in schools andat home.Plum are optimistic about the prospects for increasedinternet adoption in Europe as innovation by the privatesector continues to break down many of the remainingbarriers to adoption. But we should be worried aboutanyone under 25 in Europe who does not use theinternet today. Almost half of these are to be found inItaly. There are also over 30 million adults between 25and 55 who are more evenly distributed across Europe,some of whom will not use the internet until 2018without some form of additional assistance. Plumsuggest how European Governments might use publicfunds to bring forward this date.
Richard Feasey
 The Vodafone Policy Paper Series
Number 10 March 2010
Developing Government objectives for broadband

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