Building Broadband for Development

January 21, 2010

Agenda

• Trends and Economic Importance of Broadband• Building Broadband

–Study commissioned in first round of KTF awards and completed in January 2010• Future Broadband Work

–Broadband Strategies Toolkit (funding approved by the second round of KTF)–Country-level broadband TA (e.g. Egypt)

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Trends (1/2)

# of countries with commercially-available broadband

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Trends (2/2)

Broadband Penetration is closely associated with per capita income.

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Economic Impact

Broadband contributes to growth and opens up new opportunities, for which it deserves a central role in development strategies.

Impact on GDP of a 10% increase in penetration of ICTs

Rationale for Public Intervention?

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Externalities• Spillover effect• Network effect

Public Goods Aspects• Benefiting all the users simultaneously• Largest platform to deliver information • Platform to deliver public and social services

Building Broadband

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Table of contents1. Status and Importance of

Broadband2. Rethinking broadband as an

ecosystem3. Broadband market

development in the Republic of Korea (Ovum)

4. Experiences of other broadband leaders (Prof. Rob Frieden)

5. Strategies to build the broadband ecosystem

6. Policies and programs to build broadband

7. Building blocks for broadband

Team: Yongsoo Kim (TTL), Tim Kelly, Siddhartha Raja

Rethinking Broadband as an ecosystem

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Learning from the Pros

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Broadband penetration in selected economies, 2000-09

• Among the seven economies studied, all have reached a high level of market penetration• Korea stands out for “defying the S curve”• Some early leaders, like US, have fallen behind

Different routes, similar ends

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Country Unique idea/lesson

Finland Absence of monopoly incumbent meant heavy reliance on market forces. Recently made broadband a “legal right”

France Service-level competition, climbing the “ladder of investment”

Japan Intense deployment of fiber optic and wireless broadband

Korea (Rep.)

Public Private Partnership, with government playing key early role in demand aggregation and strategy development

Sweden Combination of demand- and supply-side policies, municipal fiber rollout

UK Service- and facilities-based competition, structural separation

US Stewardship for Internet, laissez faire approach but with the comfort of facilities-based competition

Common elements

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Components of the ecosystem  

Finland France Japan Korea, Rep.

Sweden U. K. U.S.A.

Overall vision Broadband strategies Planned

Networks and services

Facilities competition Service competition Wireless broadband Financing rollout Planned Planned

Applications and users

Content and media promotion Demand facilitation

Sequencing in Korea

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• Greater Gov’t involvement in early stages• US$32bn

investment• Progressive

shift to higher performance infrastructure

Policies and Programs

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• Early Stage: Promote• Supply-side pump priming, including releasing

spectrum, licensing competition, backbone networks, reducing investment costs

• Demand side facilitation, such as digital literacy, demand aggregation, low-cost devices

• Mid Stage: Oversee• Market entry, including local-loop unbundling• Regulate unfair practices

• Late Stage: Universalize• Consider defining broadband as a universal

service• Subsidizing roll-out in rural areas

Building Blocks for Broadband

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Mobile and broadband, penetration rate per 100 inhabs, by year since inception

1. Be visionary, yet flexible2. Use competition to promote

market growth3. Facilitate demand

Broadband Strategies Toolkit

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• Phase I: Handbook (2010 – mid 2011)–1. The case for broadband–2. Broadband strategies and policies–3. Making broadband work for development–Executive Summaries of other modules

• Phase 2: Toolkit (mid 2011 – 2012)–4. Regulatory reform and legal issues–5. Building connectivity–6. Extending access through Public / Private Initiatives–7. Facilitating Demand

• Phase 3: Dissemination (2012 – 2013)–Training Materials –Self-assessment tool for policy-makers