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5. Extending broadband access and services

 

This module summarises Chapter 5 which focuses on good practices aimed at ensuring that broadband infrastructure and services are as widespread as possible. It describes leading mechanisms and tools to extend broadband access that policy makers have at their disposal, for example through national broadband plans, universal service funds and public-private partnerships

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Main policy objectives
Tools for measurements and analysis
The LAC region
Leading good practices

 

Main policy objectives

Facilitating wide availability of broadband access at affordable prices for all segments of society, including for people with low incomes and living in rural areas, is the main policy objective. Achieving this goal involves two related policy objectives:

  • Encouraging private investment extending broadband access. Most of the good practices intended to increase competition by lowering barriers for investment can and should be used to encourage private investment. These include simplifying licensing requirements, lifting foreign investment restrictions, simplifying and harmonising rights-of-way acquisition and encouraging network sharing and co-investment. These issues are addressed in detail in Chapters 2 and 4.

  • Solving critical bottlenecks for infrastructure deployment and use. In certain situations, these critical bottlenecks, such as addressing the availability of high-speed backbones or backhaul infrastructure, cannot be addressed adequately by private initiatives. Active public policies are needed to encourage sustainable infrastructure deployment from the private sector in the access portion. Bottlenecks for infrastructure deployment are also discussed in Chapters 3 and 8.

These policy objectives are usually set down comprehensively in National Broadband Plans (NBPs). These enable policy makers to set clear objectives, taking into account the level of development in the country, existing coverage gaps by fixed and mobile broadband networks and the level of competition (Chapter 2). Such policy objectives should also take into account the broadband demand side, since encouraging demand promotes the rollout of broadband networks by the private sector (Chapters 6, 9, 10, 11, 12, 13, 14 and 15).

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Tools for measurement and analysis

Key metrics and data required to determine objectives and monitor advances in broadband access include data on geographical/household coverage and speed of broadband access. This information can be collected from operators (both fixed and mobile) and processed and analysed by the authorities or regulator monitoring broadband access extension. The nature of the Internet means that they can also engage in their own independent assessment of network availability and performance, including through new tools such as applications that enable users to provide information. In the United States, the Federal Communications Commission (FCC) uses this tool, and ANATEL in Brazil has also an initiative along these lines (Box 1). Regular updates of data are needed to check progress and identify bottlenecks.

Measurements of broadband availability and access should address geographical coverage, as well as the share of population (households) where broadband coverage is available. In addition to the geographical coverage in a given area, data on the availability of household broadband access is vital. As discussed in the section on good practices, broadband maps are a key tool for this purpose.

Speed and quality of service is also important for broadband access, since low speeds or poor quality may make it difficult or impossible to use certain Internet applications and services. Data should regularly be collected on real speeds and quality of service (QoS) parameters. This data can be requested from operators, but real speeds and QoS parameters, such as on delay, can also be collected directly from the network.

When evaluating national broadband plans, it is useful for any LAC country to compare its performance with that of others in the region, as well as other reference regions. OECD countries provide comparative data that allow members to view their performance relative to others, and the Inter-American Development Bank’s (IDB) DigiLAC initiative aims, among other uses, to compare the situation for broadband access in the LAC region. Comparisons with broadly analogous countries are also often made (e.g. Chile compares its performance with other Latin American countries, while South Africa compares itself with the other BRICS countries). In the United States, the FCC is required by law to include comparisons with at least 25 countries in its annual report on advanced services.

Peer reviews are also useful in assessing broadband access extension plans. They involve systematic examination and assessment of a country’s performance by other countries, to help the reviewed country improve its policy making, adopt good practices and comply with established standards and principles. Peer review is a useful tool for assessing policies aimed at extending broadband access. The methodology developed by the OECD (2003) has been extensively applied, including by other international organisations, and could be also applied in the LAC area to assess National Broadband Plans. The examination is conducted on a nonadversarial basis, and relies heavily on mutual trust among the countries involved in the review, as well as their shared confidence in the process. When a peer review is conducted under the aegis of an international organisation, the secretariat of the organisation also plays an important role in supporting the process. With these elements in place, peer reviews tend to create, through a reciprocal evaluation process, a system of mutual accountability.

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Overview of the situation in the LAC region

According to the information provided by countries in the LAC region for this report, as well as publicly available information, policy makers are keenly aware of the challenges for extending broadband. Many have taken steps on a number of fronts, with a special focus on rural areas, underserved periurban areas or for citizens with particular challenges.

Although LAC countries have yet to catch up with the most advanced countries in broadband access and use, significant advances have been achieved in recent years in several LAC countries in terms of broadband access availability, use and skills. The ICT Development Index (IDI) published regularly by the International Telecommunications Union (ITU) adds to the information provided by the IDB’s Broadband Development Index (digiLAC) (IDB, 2014c). Countries such as Costa Rica, Suriname, Brazil and Colombia significantly advanced their placement in the ICT Development Index between 2010 and 2015, reflecting a wider availability, use of broadband access as well as an increase in skills on ICTs. However, the average increase in IDI level was substantially higher for countries in mainland Latin America (1.09 points) than for the Caribbean and Caribbean-facing countries (0.73 points) (ITU, 2015).

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Good practices

Chapter 5 focuses on good practices for extending broadband access.

While the private sector is expected to play a central role in expanding infrastructure and services, sound regulatory frameworks that lower administrative barriers to deployment, provide legal certainty for investors and promote competition and investment are also essential. Once existing bottlenecks for private-sector infrastructure deployment are addressed, policy makers should identify areas or locations needing public intervention.

National Broadband Plans (NBPs) usually set out the guiding policy objectives for broadband expansion. They should be done in a comprehensive manner, in co-ordination with stakeholders, Digital strategies (when present) and demand-side policies provide clear objectives and both short and long-term measurable targets; take into account regions’ levels of development; map coverage gaps by fixed and mobile broadband networks; assess the existing level of competition; and implement a routine evaluation of progress towards goals. NBPs should be guided by the principle of technological neutrality, allowing market actors with different technologies to bid for coverage projects, giving preference to those with high social returns (e.g. connecting public premises and benefiting disadvantaged groups).

After assessing the policy objectives, the next step is selecting mechanisms to meet these goals. Policy makers can choose to impose obligations, set incentives or provide funding for closing access and usage gaps. Obligations, when revised for the new requirements and use of high-capacity networks and directly related to coverage and quality, could be aimed at extending broadband access in certain areas and tied to licensing frameworks and spectrum assignment. Demand-related objectives should be met through other procedures. Incentives could include partial or total tax exemptions, lower or waived fees for spectrum licenses in certain areas, or loans at reduced interest rates. Direct funding of broadband infrastructure, usually articulated in NBPs and Universal Service Funds (USFs), should be within the reach of all market participants equally and awarded in a transparent and competitive manner, with the inclusion of infrastructure sharing and open access conditions. USFs are used to aggregate and manage different sources of funding, such as contributions from operators based on revenues and general government revenues, complemented in some cases by spectrum auction earnings. Well-run USFs rely on transparent and effective management processes and a steadier stream of funds. Operators’ financial returns should be considered so as to not overburden them and impact investment, and cross-subsidies should be avoided so as not to distort prices. Meanwhile, USF contributions should be reviewed regularly through benchmarking exercises and economic analysis.

The public and private sectors can also complement each other through PPPs. These offer an efficient model for structuring public funded broadband access extension plans or projects that take advantage of synergies that benefit both private and public interests, and ultimately contribute to increasing the benefits for consumers.

Public-owned operators may also have a role to play, but licenses, obligations and conditions for providing broadband services should in principle be the same as for any other operator. Any differential treatment should be based on regulatory decisions (due to a dominant market position, for example, and not to ownership structure). Broadband subsidies for public operators should be granted under a competitive process open to any operator that can satisfy the prerequisites.

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BROWSE TOPICS OF THE TOOLKIT

Introduction •  Regulatory frameworks and digital strategies •  Spectrum policy •  Competition and infrastructure bottlenecks •  Extending broadband access and services •  Affordability, government charges and digital inclusion •  Convergence •  Regional integration •  Skills and Jobs •  Business uptake, entrepreneurship and digital content •  E-health •  Digital government •  Consumer protection and e-commerce •  Digital security management •  Privacy protection
 

 

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