Public intervention and super-fast broadband: when and where?

By Marco Marini

Fast broadband has the potential to deliver significant public benefits. No wonder why it is often argued that public money should be used for it. But there are also arguments against public intervention.

Indeed, balancing private and public sector activity is a key theme of debate in many sectors of the economy, and broadband makes no exception.

Super-fast broadband was discussed yesterday during the first day of Ofcom’s International Conference. With speakers from all over the world, it was interesting to see how public policy approaches to NGA can vary from country to country.

Over here in Europe, we usually see the need of public intervention in cases of ‘market failure’: if the private sector cannot find a sound business case, then public sector mechanisms should be put in place to deliver services with significant public benefits. Where the market delivers, instead, public money (which is far from infinite) is probably unnecessary.

In the case of super-fast broadband the private sector is starting to deliver, but it is pretty clear that these deployments will be far from universal – the costs involved are just too high. Indeed, geographical concentration of investment is a key feature of current broadband, too.

As shown in the slide above, taken from one of our industry briefings (you can see the whole presentation here), we think there is a stronger case for public intervention in those areas that are going to be left out by private investment.

So, where is the market going to deliver? And when? In some cases it might be too early to say. It takes time to deploy NGA and, more in general, investment plans may change while they progress. But, as the Communications Consumer Panel notes, those areas that today are still left without broadband have a clear chance to leap frog to NGA as soon as possible.

Many communities in various parts of the UK are already engaging with the relevant authorities to bring super-fast broadband to their local areas. Yesterday, Roger Darlington was in the audience of the Ofcom International Conference and he said he had already come across more than 20 UK local community projects. The Community Broadband Network is also performing a key co-ordination role, and it recently launched a ‘National framework for Local Action’. Isolation is probably the biggest risk faced by these local projects, and the CBN efforts are rightly pointed at avoiding it by encouraging the use of common technical standards.

Are you involved in a local community project for bringing fast broadband to your local area? If so, would you like to share your experience on this blog?

---

P.S. Please remember we cannot authorise your comments if you don't provide a valid e-mail address. It's a shame we can't publish some of the comments we receive for this very reason, but we have to stick to the House Rules...

Comments

[Peter Shearman]

http://www.itpro.co.uk/blogs/bsg/2008/12/04/the-role-for-public-sector-intervention-in-next-generation-broadband/

[Kitty]

What is the point of superfast broadband when it is limited so you cannot use 21cn. The faster you go the more those who like to infringe copyright will download. Plus when they increase prices to make customer move to the next generation broadband when it is not available seems unfair for those wishing to move over but can't yet now pay more for the old system.
We have this 21cn faster broadband that works for some while others at the extremes would be slower. The small number of exchanges enabled will now be cheaper for customers while the other 80% who have no 21cn enabled exchange will pay more, on the assumption it is to make customers take up the new 21cn.
Faster broadband can only be given if those supplying it are not allowed to hold the customers to ransom, what use is speed if the lines fail and to get it back you are charged over £100. Why is BT not forced to return a connection to the original speeds when the customer first signed up and was given a speed for their line?