 A new paper is available from WDR's European Partner, the Center for Information and Communication Technologies at the Technical University of Denmark. National Strategies for Promoting Broadband Access identifies some of the major drivers and inhibitors to broadband penetration in Canada, USA, Japan and South Korea (public funding, income, geography, competition). It concludes that although technical and economic parameters such as income play a role in the development of broadband, public policy plays an important role in explaining national differences in adoption of broadband.
Introduction
Broadband is radically transforming the telecom sector. First broadband offers opportunities for provision of a host of new services and stimulates demand for broadband connections. Second provision of tripple play enables a bundling of voice, data and broadcasting services. And third broadband has created a window of oportunity for new actors including cable operators and public utility companies to enter the telecom market.
Since year 2000 there has been a tremendous growth in the demand for broadband, and within a few years broadband will become the most common mode of Internet access in many countries. In most countries promotion of broadband access constitutes an important element in their information society strategy. In the 2004 American precidential national performance in broadband was seen to be almost as important as GDP (Fransmann; 2006).
A comparison of broadband development in the OECD countries reveals that national policies are important for the penetration of broadband. Successful policies include direct intervention in the form of financial support to infrastructure development in disadvantaged areas, regulation ensuring facility based competition and facility measures such demand stimulation and providing common visions for the information society.
It is not a surprise that penetration of broadband is highest in high income countries and it may be argued that broadband is not relevant in developing countries, where universal access to basic telephone services still is an issue. However also in developing countries broadband is becoming more important as a way to ensure ICT access. By April 2006 broadband was available in 166 countries – twice as many as four years earlier. This includes low income countries like Ghana and Rwanda. One reason for this rapid expansion is rapidly falling prices. Broadband tariffs have been reduced by 40% during the past two years. A continuation of this development could make broadband affordable for major parts of the population also in developing countries (ITU, 2006). In Beijing 50% of the populations is connected to the Internet and 64% of those uses a broadband connection (Fransman, 2006, p. 63). In absolute numbers China is today the second largest broadband market. Although the penetration rate for the entire country is comparatively low (1.3 per 100 inh. in 2004 (UNCTAD, 2005)), 27% of the Internet subscribers are using broadband to access the Internet (ITU, 2006).
Still there is a considerable digital divide between high and low income countries. Apart from a few Asian nations, penetration rates in most developing countries are lacking behind. In spite of impressive growth rates in Africa and Latin America it will take years before they reach the levels achieved in US, Europe and the most successful nations in Asia.
This digital divide may have serious implications for local enterprises. It has been demonstrated that dial-up access is sufficient for companies starting to use basic communication services such as e-mail and posting of static information on a web-site (UNCTAD, 2005) more advanced applications such on-line ordering demand always on functionality.
Broadband access offered at affordable prices is also important for ICT based community centres offering tele-learning, tele-medicine or similar services. In particular it will greatly improve their financial sustainability if they are allowed to use their broadband connection to provide low cost telephony services by use of VoIP (Proenza, 2005).
Even though telecom markets are being liberalised, it seems that the goal of achieving universal access to broadband services has legitimized a revitalisation of traditional industrial policy tools in many OECD countries. Broadband policies do not only include improvement of framework conditions and demand stimulation, but also direct or indirect support to the supply side, and it is being discussed to include broadband in the universal service obligation.
This paper will therefore discuss various national strategies to be used to stimulate penetration of broadband in a developing country context. This discussion will be based on identification of the major drivers and inhibitors towards penetration of broadband and made in some of those countries, which have been most successful in their broadband strategy. This will be based on empirical survey of broadband policies implemented in all the EU member states and in Canada, USA, Japan and Korea. This research is made as part of the EU funded BREAD project (Broadband in Europe for all: a multi disciplinary approach), which collects information on ongoing regional and national initiatives in Europe and around the world (Daele, 2005). |
