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Post-2015 Consensus: Infrastructure Perspective, Koutroumpis

Summary

Studies have shown that adoption of broadband is associated with faster economic growth via three broad categories of impact: ‘direct’ effects on employment and GDP during investment, ‘indirect’ effects associated with the telecom sector supply chain and ‘induced’ effects in the wider economy. But, in fact, there are a number of factors specific to each economy which, determine overall impact, with institutions and regulations in particular being key enablers to unlock the economic benefits.

Auriol and Fanfalone make a credible effort to analyse an inherently complex undertaking. The focus on broadband indicators – availability, quality and affordability – is a valid step forward. However, broadband penetration alone is used to assess costs and benefits, as a proxy of network adoption. Speed is excluded from the list, despite the fact that policymakers around the world are prepared to make considerable investments in faster networks, which they often expect to deliver increased benefits. The analysis presents only a fixed impact across technologies thus making the cheaper ones score higher in terms of the cost-benefit approach. This is not unexpected, but still represents a simplification of the actual situation.

A common - implicit - assumption in these undertakings is that broadband availability is the same as adoption, which is not necessarily true. Connecting the un-connected yields economic benefits orders of magnitude greater than simply upgrading existing subscribers to higher speeds, especially in the least developed countries (LDC) context. Besides, the marginal impact of broadband in developing countries is never contrasted to the generic effect of the broader global targets. Ideally, these targets should also form part of a wider approach to some key challenges. For example increasing broadband penetration by 10% in LDCs can have a range of effects across the Post-2015 Agenda: reducing poverty (SDG 1), increasing access to education (SDG 4), improving health monitoring, prevent outbreaks of epidemics (SDG 4) and investing in local infrastructure (SDG 9).

The study builds on projections for developing countries based on evidence from rich economies, which can be misleading. At the same time, it takes a relatively naïve approach in devising broadband targets based on the access medium (fixed or mobile) instead of more cost-effective scenarios that take into account regional population densities and foreseen usage. Mobile broadband is likely to be the best candidate because of the current lack of fixed infrastructure, and older (3G) or alternative (satellite) technologies may be more cost-effective in practice. A number of initiatives are already being tested.  

Out of the 900 million people residing in LDCs only 6.7% are internet users as estimated by the Broadband Commission (2013). Fixed line networks are rudimentary (0.44% only have a fixed broadband connection) making a fixed broadband strategy an unlikely solution. Mobiles have already got a substantial footprint in these countries where almost 60% of the population uses a mobile device. Rolling this out could immediately help with other challenges. A range of health screening tests could be conducted with results sent directly to hospitals, mobile broadband could build on the One Laptop per Child initiative to boost education and on-demand transport services could be provided for remote areas.

Despite its benefits, providing broadband to LDCs also faces some substantial challenges, including the need to coordinate spectrum rights and provision alternative modes of access for remote areas, to protect equipment and to encourage content creation via appropriate governance policies. Information on the issues raised in this paper can help to inform policymakers when formulating plans for broadband.