Broadband and rural areas in the EU: From technology to applications and use

The paper examines current trends and policy issues related to broadband access and use in the rural areas of European Union (EU) member states. It draws selectively on the findings of a recently completed, multi-country project focused on current and future trends in broadband provision, applications and use in the enlarged European Union.The paper reviews key aspects and examples of the research literature and policy initiatives related to socio-economic and policy aspects of broadband, especially those focused on spatial inequalities of network rollout, access and use. It presents the main trends and issues related to broadband access and use in rural areas in EU countries and considers some related implications and conclusions.     

The cost,coverage and rollout implications of 5G infrastructure in Britain

Despite 5G still being embryonic in its development, there is already a quest for evidence to support decision-making in government and industry. Although there is still considerable technological, economic and behavioural uncertainty, exploration of how the potential rollout may take place both spatially and temporally is required for effective policy formulation. Consequently, the cost, coverage and rollout implications of 5G networks across Britain are explored by extrapolating 4G LTE and LTE-Advanced characteristics for the period 2020–2030. We focus on ubiquitous ultrafast broadband of 50 Mbps and test the impact of annual capital intensity, infrastructure sharing and reducing the end-user speed in rural areas to either 10 or 30 Mbps. For the business-as-usual scenario we find that 90% of the population is covered with 5G by 2027, but coverage is unlikely to reach the final 10% due to exponentially increasing costs. Moreover, varying annual capital intensity or deploying a shared small cell network can greatly influence the time taken to reach the 90% threshold, with these changes mostly benefiting rural areas. Importantly, simply by integrating new and existing spectrum, a network capable of achieving 10 Mbps per rural user is possible, which is comparable to the UK's current fixed broadband Universal Service Obligation. We contribute to the literature by quantifying the effectiveness of the spatial and temporal rollout of 5G under different policy options.     

Flexibility and broadband evolution

This paper focuses on the question of which broadband technologies that are currently available (and/or under development) enable evolutionary paths for broadband (symmetrical bandwidth of 10 Mbps¹) deployment in the local loop, leaving options open for new developments. The paper is relevant to policymakers and telecommunication operators who are faced with emerging technologies and who need to make short-term decisions about upgrading networks under risk and uncertainty. The concept of evolutionary paths and the advantages involved, such as smaller and more flexible investments and an increased adaptability to market developments, are addressed. Several wired and wireless transmission media are discussed on the basis of criteria like network capacity, reach, compatibility, standardization, maturity and technical and geographical scalability. Broadband technologies like ADSL2+, Etherloop, EFMC, CMTS+, Narad networks; EttH, EPON, APON, Optical Ethernet, LMDS, MMDS, FSO and HFR are assessed on the basis of these criteria. Starting from this assessment, migration paths for copper, cable and wireless technologies are presented and discussed.     

Does strategy matter? A comparison of broadband rollout policies in Finland and Sweden

This study investigates broadband policies applied in Finland and Sweden with special reference to the geographical coverage of the required network infrastructure. These two Nordic countries are seen as forerunners in the development of the information society, and they also share several other similarities bearing relevance to the take-up of broadband. However, they have applied different broadband strategies: Sweden, one of the first-movers in this field, already launched its ambitious and interventionist national ICT infrastructure program in 2000, whereas the Finnish broadband strategy, published in 2003, largely relies on market forces. The present article analyses these broadband strategies, and attempts to identify their actual differences. It appears that the Finnish strategy caused temporary higher broadband prices and a somewhat slower rollout. However, the current results of the two countries’ strategies in terms of coverage and usage levels, as well as end-user prices, do not indicate any significant long-term policy-induced impacts.     

Lessons from broadband development in Canada,Japan, Korea and the United States

Broadband network development does not always track closely a nations overall wealth and economic strength. The International Telecommunication Union reported that in 2005 the five top nations for broadband network market penetration were: Korea, Hong Kong, the Netherlands, Denmark and Canada. The ITU ranked the United States sixteenth in broadband penetration.Aside from the obvious geographical and demographic advantages accruing to small nations with large urban populations, broadband development thrives when it becomes a national priority. Both developed and developing nations have stimulated capital expenditures for infrastructure in ways United States public and private sector stakeholders have yet to embrace. Such investments have accrued ample dividends including the lowest broadband access costs in the world. For example, the ITU reports that in 2002 Japanese consumers paid $0.09 per 100 kilobits per second of broadband access compared to $3.53 in the United States.Economic policies do not completely explain why some nations offer faster, better cheaper and more convenient broadband services while other nations do not. This paper will examine best practices in broadband network development with an eye toward determining the optimal mix of legislative, regulatory and investment initiatives. The paper will track development in Canada, Japan and Korea as these nations have achieved success despite significantly different geographical, political and marketplace conditions. The paper also notes the institutional and regulatory policies that have hampered broadband development in the United States.The paper also will examine why incumbent local exchange and cable television operators recently have begun aggressively to pursue broadband market opportunities. The paper will analyze incumbents’ rationales for limited capital investment in broadband with an eye toward determining the credibility of excuses based on regulatory risk and uncertainty. The paper concludes with suggestions how national governments might expedite broadband infrastructure development.     

Evaluating the effects of ICT core elements on CO2 emissions: Recent evidence from OECD countries

This research aimed to inform policymakers about the actual climate relevance of the information and communication technology (ICT) ecosystem, which includes data centers and content provision, broadband networks, and consumer devices. To provide robust empirical evidence on the net environmental impact of these core ICT elements, we used OECD panel data for 34 Member States for the years 2002–2019 and panel fixed-effects regression models. In contrast to previous literature, we measured basic broadband and new fiber-based wireline broadband and 3G/4G mobile broadband network deployment. We also captured variations in end-user devices, ICT affinity, and famous online content. We found that, on average, the CO₂-reducing effects appear to outweigh the CO₂-increasing effects. In particular, we found that, in addition to the reduction effect associated with the use of basic broadband connections, there is a further, albeit smaller, reduction effect associated with new fiber-based broadband connections. Other ICT elements showed insignificant coefficient estimates, suggesting largely offsetting environmental impacts. Our main findings were subject to various robustness checks and were broadly consistent with previous literature using data from developed countries. Our results suggested that old and new broadband networks as enabling technology could generate positive environmental effects for society.     

Improving the FTTH business case–A joint telco-utility network rollout model

Fiber to the home networks are seen as the most future proof technology to offer increasing bandwidth to customers. The publication of the Digital Agenda has put forward challenging goals for the broadband connectivity in Europe, but the rollout of next generation fixed access networks is still lagging. One of the reasons is the high initial investment cost associated with the rollout of these networks. To decrease this cost, a cooperation model between utility operators during the deployment phase is proposed in this paper. A model has been developed, in order to optimize the position of the different infrastructures in the trench and to allow for a fair allocation of the different costs incurred between all cooperating parties. The combination of these models has shown that a synergetic deployment phase of new infrastructures, both in Greenfield and Brownfield installations, can decrease the deployment costs for fiber infrastructure up to 21%.     

Fiber-broadband-internet and its regional impact—An empirical investigation

I analyze a quasi-natural experiment of fiber broadband rollout in a rural German county and investigate the impact on real estate values. I find that there are strong and significant effects of fiber broadband deployment, which indicate relevant personal benefits for customers. These findings add to the literature on the evaluation of broadband infrastructure investment.     

Race to the top: Does competition in the DSL market matter for fibre penetration?

High speed broadband creates potential productivity gains and has a positive impact on economic growth. Achieving Europe's broadband access objectives will require large scale investment in next generation broadband networks, and it is imperative that an appropriate investment climate is created to encourage fibre network rollout. This study considers whether and how competition in the DSL market affects the incentives of operators to invest in the deployment of high-end fibre optic networks. Most earlier research on the drivers of investment in broadband technology has focused on the effect of mandatory access policies, such as local loop unbundling, or competing infrastructures. We posit that competition in the DSL sector may also influence fibre penetration, possibly to a considerable extent. We find that the relationship between service-based competition and fibre penetration is non-linear: a lack of or severe DSL competition is correlated with a negative effect on fibre penetration, but if a moderate degree of competition is already present in the market, more service-based competition may positively influence fibre penetration. The scale of these effects however varies with the openness of the DSL market: operators' incentives to invest in fibre appear to be more sensitive to changes in DSL competition if there is extensive local loop unbundling.     

Effects of broadband availability on total factor productivity in service sector firms: Evidence from Ireland

While broadband is widely believed to augment productivity, there is little firm-level evidence of a generalised causal effect. In this paper we examine whether the introduction of digital subscriber line (DSL) broadband services increased firms' productivity in nine sub-sectors within the services and distribution sector in Ireland from 2006 to 2012. Firm-level panel data on firms' characteristics are linked to spatial information on the rollout of DSL. While we do not find significant productivity effects in the services sectors taken together, we do find positive and significant effects on firm's total factor productivity in Information & Communication and Administrative & Support Services.     

Ultra-fast broadband investment and adoption: A survey

In recent years, and in line with EC plans, telecom operators have been facing the need to deploy high-speed, fiber-based infrastructure. What is the socio-economic impact of these new investments on growth and local development? What are their effects on the labor market outcomes, in terms of firm productivity and entrepreneurship? What is the role of regulation and competition in spurring the deployment and the adoption of ultra-fast broadband networks? In this survey, we review the existing literature on ultra-fast, fiber-based broadband network, devoting special attention to the results and to the methodology used in the most recent studies.     

The Year in Economics at the FCC: A National Plan for Broadband

The past year in economics at the Federal Communications Commission (FCC) has focused on encouraging the adoption and deployment of high capacity Internet access and the associated networks, commonly termed “broadband.” Our article sketches important economic themes in the FCC’s National Broadband Plan to show how the application of basic principles of regulatory economics takes account of rapid technological change. We discuss natural monopoly regulation, externalities and cross-subsidies, network effects and interconnection, the allocation of scarce inputs, protecting and fostering competitive markets, and consumer protection and transparency as they apply to the development of broadband.     

Municipal support of wireless access network rollout: A game theoretic approach

Next generation access networks are expected to bring ubiquitous broadband access and have attracted interest of municipal governments. This paper investigates the support by municipal authorities for the rollout of such a city-wide wireless broadband access network. Different business cases for 3G and WiFi operators are developed and it is indicated how to model the specificities for commercial versus public players. Furthermore, a game theoretic approach is used to investigate the investment options of the municipal player. It is shown that a partnership between a commercial and public player is the most likely investment strategy. However, bringing more players into the competitive environment reduces the intention of the commercial partner to engage in the public–private partnership (PPP).     

Multilevel governance and broadband infrastructure development: Evidence from Canada

This paper investigates the contributions of digital infrastructure policies of provincial governments in Canada to the development of broadband networks. Using measurements of broadband network speeds between 2007 and 2011, the paper analyzes potential causes for observed differences in network performance growth across the provinces, including geography, Internet use intensity, platform competition, and provincial broadband policies. The analysis suggests provincial policies that employed public sector procurement power to open access to essential facilities and channeled public investments in Internet backbone infrastructure were associated with the emergence of relatively high quality broadband networks. However, a weak essential facilities regime and regulatory barriers to entry at the national level limit the scope for decentralized policy solutions.     

Emerging models of public–private interplay for European broadband access: Evidence from the Netherlands and Italy

The paper examines the role and function of public–private interplay in the development of municipal initiatives in the broadband sector. The analysis of initiatives in the Netherlands and Italy shows how the interaction between public and private stakeholders can facilitate local broadband initiatives. This interaction has been vital in aligning the interests of different private and (semi-)public parties, in designing the network and in aggregating sufficient demand for broadband services. The comparative analysis examines the steps involved in these initiatives and the strengths and weaknesses of joint public–private activities. The paper shows that the challenge for cooperating stakeholders has been to foster further investment in the upgrading of the network and in the provision of advanced broadband services.     

Triple play: How do we secure future benefits?

Recent technological developments make it possible to provide all telecommunications services (TV, telephony and internet) via the TV cable and fixed telephony network. Moreover, a new infrastructure based on optical fibre (to the home) is emerging in some places, which may in the future replace both existing networks. Making use of the available economic literature, the paper analyzes some of the consequences of the emergence of one electronic communications market. It focuses on two policy issues: the consequences of convergence of technologies and competition between networks for regulation in the short and medium runs, and the role of public investment in the rollout of optical fibre. It concludes that the present state of regulation may have some undesirable effects in the face of convergence and that public investment in a new general purpose infrastructure may have important advantages.     

The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies

Energy companies and other utility providers have been often involved in the provision of telecommunications services. Nevertheless, their contribution to broadband development has varied significantly over time. In the late 1990s, both local and national utilities in the European Union (EU) engaged in the provision of broadband networks, but only few of them managed to establish themselves as major broadband providers. More recently, new projects involving national utilities have been announced in several EU countries, opening new scenarios for utilities’ contribution to Next Generation Access (NGA) development. This paper identifies and explores the factors affecting the entry and the success of utilities in the EU broadband market, through the comparison of four case studies from four EU countries (Germany, Italy, Sweden and the UK). The evolution of utility involvement in the EU broadband markets is assessed against the interaction of market, technology and policy factors, focusing on the impact of policy and regulatory measures. As a result, this paper provides fruitful insights into the relevance and effectiveness of public interventions in broadband markets. Across the four case studies, public support and public ownership emerged as the main drivers for the involvement of utilities in EU broadband markets, with regulatory measures and economies of scope exerting a limited and decreasing influence. However, the contribution of utilities has varied significantly across the cases studied, reflecting the different approaches taken at national and local level to support broadband development, in spite of the common regulatory framework.     

Fibre-to-the-home,high-speed and national broadband plans: Tales from Down Under

In recent years governments in many countries have acknowledged the higher complexity involved in finding the more efficient path towards a so-called broadband ecosystem. As the first decade of the twenty first century was ending, the governments of Australia and New Zealand committed to the construction of high-speed, fibre-optics next-generation access networks. This paper is about the approach followed by Australia and New Zealand to developing broadband infrastructure, the means deployed to build the network, and policy and market issues. The paper critically analyses the short history of each experience, including the political process, the reasons exhibited to justify the governments' involvement in infrastructure deployment, and the institutional arrangements introduced to manage the participation of private partners. The paper proposes a framework for analysis and uses its elements to critically analyse policy and regulatory decisions affecting the deployment rate and goals set by Australian and New Zealand government for their respective fibre-based next-generation platforms. The framework is used to draw comparisons between the two country cases and in so doing allowing the appreciation of commonalities and differences in the development and expectations for the future of telecommunications markets in the region.     

Efficiency in broadband service provision: A spatial analysis

With the 2008 Federal Communications Commission (FCC) order amending both the definition of broadband and its data collection practices, the problems associated with data integrity and ZIP code aggregations in the United States will soon be forgotten. However, between 1999 and 2007, FCC Form 477 data remain the only viable, nationwide database of broadband provision in the United States. While broadband data from 1999–2004 and 2005–2007 are not directly comparable due to a modification in collection procedure, there is an absence of objective empirical analysis for the latter time period. Interestingly, although the FCC made the 2005–2007 data publically available on the Internet, password protected files largely prevented analysts from accessing, manipulating and analyzing these data. The purpose of this paper is three-fold. First, the process utilized for liberating these data from their protected format and integrating them into a geographic information system (GIS) is outlined. Second, the spatial distribution of broadband provision in the United States for 2005–2007 is explored. A mathematical programming approach is also utilized for comparing the relative efficiencies of ZIP code areas in acquiring broadband service given their demand-side socio-economic and demographic determinants. Finally, implications for public policy, particularly those associated with developing local and regional benchmarks for broadband provision, competition and access, are addressed.