The Infrastructure Solution to the Broadband Problem

The FTTH Council Europe conference last week in Luxembourg was a good edition (although I definitely think that the Council’s strategy of going for smaller and smaller hosting cities is misguided) with a number of topics that resonated with me.

One that was particularly relevant to us in regards to our current research is the solutions to rural broadband issues. As “broadband for all” becomes a compulsory political step for more and more governments, the particular issues of rural are coming to the fore.

The traditional approach for future-proof broadband has been to let telecom players (usually incumbents) build it from the center. This allowed governments to pretend that next-generation broadband would cover large portions of the territory without any public involvement. That model unfortunately broke down real quick when the ambitions of said market players in new infrastructure deployment proved to be much lower than anticipated.

Injecting subsidies into private market players’ business plans then seemed to be the next best thing… until that proved to be of limited effectiveness as well when it comes to rural broadband challenges.

The core problem as we (and, as I found out in Luxembourg, more and more policy people) see it is that subsidies haven’t made an unaffordable investment affordable. It has just allowed market players not suited for infrastructure investment to invest (albeit in a limited way) in infrastructure.

What if we’d encouraged infrastructure players to deploy infrastructure ? Our early analysis, presented last week in Luxembourg, shows that in most countries it would have allowed for the deployment of unsubsidised fiber to the premise infrastructure beyond the reach of the current model subsidised broadband. Subsidies could then have been focused on addressing the truly complex rural broadband issues.

It’s a real failure of policy makers in Europe to not have realised what was happening under their watch or not have had the courage to address structural issues. I sense however that things are starting to shift. More people seem open to structural remedies, at least for rural broadband. In various countries (not limited to the UK) structural issues are being examined, and not just by policy makers but also by incumbents themselves.

Will we finally see reason on these issues and turn the broadband problem on its head to find the infrastructure solutions ? I sure hope so.